FEATURED IN BALTIMORE BUSINESS JOURNAL

Philly home flipper expanding contractor-finding app to Baltimore

A home flipper from Philadelphia built an app to help folks in his industry find the right subcontractors. Now, he is expanding his business to Baltimore.

About a year ago, CJ Koch launched DirectSubs, an app that aims to solve a specific problem he and other renovators commonly faced in the home flipping and development industry: finding subcontractors to do the right home renovations job, at the right time.

App-based company DirectSubs aims to help home flippers and developers connect with contractors best suited for certain jobs.

A few hundred people in the Philadelphia area
are now using the app, and Koch said he is ready to expand its user base to Baltimore.

Baltimore felt like the next logical place to expand his concept, Koch said. He feels the city has a similar “grit and character” to Philadelphia, and a similar market demand for buying and fixing up older homes. The Greater Philadelphia metro had the fourth highest gross return on investment for flipping in the country at 107.1 percent in 2016, according to a March 2017 report from ATTOM Data Solutions. Baltimore has a 96.6 percent gross flipping ROI.

Koch had been buying and renovating homes in and around Philadelphia for about 15 years, and faced the difficulty of finding reliable subcontractors. When developers need a certain job done, they tend to start by calling through their list of trusted contacts, Koch said. But if their usual “roofing, painting or tile guy” can’t do the job, things can get complicated.

“Usually you just end up calling around, or asking friends in the industry who they use, and trying to work through details with someone new who may not have the right skills or can’t work with your schedule.” Koch said. “It’s a time-consuming process. I wanted to find a way to streamline it.”

To solve the problem, Koch decided to create an app that could connect real estate builders, flippers and developers with subcontractors in real time, based on expertise, location and availability.

Here’s how its works: Whenever a flipper or developer has a job they need completed, they can post a detailed project request through the app. They can also specify a timeframe for when the project needs to be done, and the job’s location. The app then automatically alerts all subcontractors registered on DirectSubs who fit within the relevant skills, timing and location parameters. Subcontractors interested in the requested job can respond directly to the flipper, or ‘project owner,’ who can then determine which subcontractor is the best fit.

When a project is completed, both the subcontractor and the project owner can rate and review the work experience, based on questions like ‘Did the contractor start the work on time?’ and ‘Would you work with this contractor/project owner again?’ Those reviews can be consulted by other DirectSubs users searching for deals in the future.

“The goal is to help flippers and developers save time so they can stay focused on more important tasks, and help contractors — especially the ones who are new to the industry and don’t have many contacts yet — find work and stay busy,” Koch said.

Currently, DirectSubs is a web-only application. Koch has financed his DirectSubs business on his own, and said he mostly markets through social media. He said he also looks to partner with local real estate professionals and building materials

suppliers, to allow them to advertise on his platform in exchange for marketing DirectSubs to the developers and subcontractors they do business with.

DirectSubs is entering the Baltimore market this month. Koch said he is offering enrollment on DirectSubs for free, as he looks to grow the user base in the new city. He said eventually, the platform will employ a subscription fee, likely between $5 and $10 per month.

Koch said he knows there are lots of other home improvement and contracting- related apps and websites for DirectSubs to compete with. For example, platforms like Takl and EFynch, which allow people to bid on homeowners’ small contracting or handyman jobs, are already operating in Baltimore. But Koch hopes his platform’s low cost and focus on intra-industry deals will set it apart.

Morgan Eichensehr
Baltimore Business Journal