Rêve Agent Doug Cloninger Talks About Breathing New Life Into Old Properties

Posted by Julie Koppman on Thursday, January 23rd, 2020 at 11:16am.

We interviewed Rêve Agent Doug Cloninger to talk about the ins and outs of being an off-market acquisition specialist, and what it’s like to work with real estate developers who love New Orleans’ history and architecture as much as he does.

Q: What does an off-market acquisition specialist do, and how did you get into this aspect of real estate?

A: When I was first getting into real estate, I was fortunate enough to meet a handful of real estate developers who became my repeat clients. Their business is all about the numbers – buying and renovating blighted properties, and then selling those properties for a fair profit. They need the best deals possible to make their numbers work. And properties that aren’t on the market can provide a competitive advantage to a real estate developer – perhaps a 10% discount vs. a property on the market that goes to the highest bidder.

I’ve been able to focus my business on researching and finding off-market properties for these clients. Real estate developers are always in the process of buying and selling. They’re either finishing a project and about to put it on the market or looking to buy a property to start the process all over again. So, I represent them when they purchase a property, and then again for the re-sale of that property after it has been fully renovated.

Q: Are your clients local?

A: They’re mostly local. I’ve found that developers in New Orleans are really committed and attached to the city because it’s such a unique place with its own characteristics and challenges.

Q: Are you finding the properties, and then approaching the owners to see if they’re interested in selling?

A: Exactly. I have an existing client base of developers who are ready to purchase properties in the areas that we’re targeting. I do the research and approach the current owners with a client in mind; if they’re interested in selling and we can agree on a price, then the deal is done. It’s an efficient process.

Q: Are you looking at properties in certain areas, or all over the city?

A: I stick with the areas that I know, so I’m focused on the Uptown area and the Irish Channel, as that’s where my clients are interested in investing. And I’ve made myself an expert there. My residential builders like the Irish Channel because there’s a lot of housing stock needing significant work, and the resale values are strong. And I have some clients who are purely focused Uptown.

Q: Are these properties in need of total renovation?

A: Yes, generally the worse shape they’re in, the better. The kind of work these developers want to do is comprehensive – full, to-the-studs, gut renovations, perhaps with additions, moving walls, replacing roofs, etc. We want to add the most value we can – so if something hasn’t been touched in 30 years, that’s perfect.

Q: What are some of the challenges you and your clients face?

A: There are always challenges with housing stock that’s well over 100 years old and hasn’t been properly maintained. When you do a gut renovation, you never know what you’re going to find. We’re basically bringing these properties back from near collapse, doing structural repairs, tearing down exterior walls and rebuilding them. Because with the heat, humidity and UV levels here, if you don’t maintain a property, it deteriorates rapidly. The key for me is working with people I know and trust who go through that process properly and put together a quality product that I can stand behind.

Q: How involved are you in the renovations? Do clients ask for your advice?

A: My clients are experts at what they do, but so am I, and I seek collaborative relationships. In the beginning, that wasn’t the case. I would see issues arise, and think, I could have helped them avoid that. Now, I'm more vocal. I give advice on adjusting floor plans, provide input on fixtures and finishes, and offer feedback on the things that will make a property the most marketable it can be. I don’t believe in compromising functionality for the sake of design, and I’m always balancing those things. It’s one thing to make something beautiful, but if it’s not comfortable, doesn't flow properly, and doesn’t suit the buyer’s needs, then why do it?

Q: Are your clients always renovating, or are they sometimes doing new construction?

A: Typically it’s renovation, because the city is not eager to allow things to be torn down. And thank goodness, because it’s really hard to recreate the feel of a historic home. You can mimic it, but with new construction, it’s not the same. There’s a character and a quality to 100-year-old hand-hewn boards that’s wonderful, and it’s great to see it being brought back to life. That’s why I love historic homes and working with people who respect the history of New Orleans and want to breathe new life into it. If you don’t properly maintain these properties, they basically disintegrate over time. It’s exciting to be part of a group of people who are preserving what they can, as best they can. I’m very fortunate to have the success I’ve had, and I’m grateful for it every day.

Q: How was 2019 for you?

A: Last year, I did close to $7 million in sales volume. And I’m relatively new to this, having received my real estates license in July of 2018. I really credit Rêve Realtors with a big part of my success. They support what their agents do, and there’s no pressure to hit certain numbers – they’re just about helping us be the best we can be.

 

If you're interested in working with Doug Cloninger, please feel free to contact him anytime.

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