Friday, March 1, 2024
Homereal estateBreaking and entering: Housing's big business

Breaking and entering: Housing’s big business

In the trade, they call them, "door-kickers"—employees or contractors for large-scale investors in foreclosed homes. These men, and they are almost always men, break into dozens of houses a day and assess the damage left by former homeowners.

"What we are looking at is to see if there's any plumbing or electrical that has been stolen, any damage to walls," said Kyle Sweet, the renovation team manager for Key Property Services, which bought 130 Atlanta-area homes at auction on Tuesday.

Sweet used a small metal tool to break in through the back door of a Lawrenceville, Ga., home on Regal Way that Key bought for $80,000 at auction.

"This is my master key," he joked.

It was remarkably easy to get in, but that should come as no surprise. Sweet said he has broken into more than 3,000 homes in his career.

Sometimes he checks out the inside first through a doggie door. Other times he is forced to push through basement windows measuring barely 3 feet in width. Sometimes he and his team, which includes a locksmith and an assessor, find serious danger inside.

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Kyle Sweet is a renovator for Key Properties, a firm that buys foreclosed homes, fixes them and sells them stands inside this house in Lawrenceville, GA.CNBC

"The worst danger that you'll have is actually through a squatter, someone that resides inside the property that shouldn't be there in the first place," said Sweet. "Typically a lot of our drivers or assessors will go and actually carry weapons on them."

Coming inside the home on Regal Way, Sweet went first through the garage door and into a huge mess. It opened to a living room and kitchen strewn with debris, garbage and broken toys.

"We still have appliances that are in, they took the stove, they took the microwave, that is not uncommon for our condition," he said.

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Often Sweet will find stolen plumbing and electrical systems, broken ceilings and demolished walls. Sometimes he finds fewer bedrooms or bathrooms than were on the auction notice. In that case, he will just add what he finds necessary.

His company, Key, renovates the homes it buys, finds and installs renters and then sells the homes to other investors as turnkey properties.

"We think that our value-add is to buy properties and get them through the renovation and leasing cycle, because we think we can do that faster with our experience," said Simon Frost, CFO of Key Property Services.

Atlanta is one of the hotter investor markets now, as it is still in the early stages of both investor demand and home price appreciation. Thousands of properties will be set for auction each month in the greater Atlanta area, and Key is buying hundreds at a time. They are among the smaller investors.

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Others, like Blackstone's Invitation Homes, are buying thousands at a time, becoming Atlanta's new landlords, likely for years to come.

By CNBC's Diana Olick. Follow her on Twitter @Diana_Olick.

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