When his pro football career came to a halt, Than Merrill found a new passion and proficiency for fixing and flipping houses that paved the way for a stint on a real estate reality show.
Merrill and his team of real estate flippers auditioned for "Flip This House" in 2006 — the show made its debut in 2005 — and have since participated in several seasons of filming.
On the air
The show is an hour-long "docu-soap" that features teams of real estate investors in various areas across the nation. Camera crews trail the flippers during the process of purchasing properties, restoring them within a set amount of time, and then "flipping" or reselling them. The show features teams from four cities– New Haven, Conn.; Los Angeles, Calif.; San Antonio, Texas; and Atlanta, Ga.
Merrill’s CT Homes team, based in New Haven, received its first flipping assignment one week after the audition. Merrill said that his television gig takes up only about 30 minutes of his day, on average, leaving the rest of the time for him to operate the company and travel across the nation for speaking engagements.
"We have very good contractors that we work with and we don’t have to be onsite as much, so it doesn’t take up too much of my time," said Merrill.
But his career in real estate wasn’t exactly what he had envisioned.
Going pro
Paul Esajan, Merrill’s friend of 18 years, said football had been Merrill’s longtime passion before he entered the real estate field.
"Than decided at 9 years old, after his dad took him to watch a Stanford football practice, that he would play football at Stanford. However, he and his family didn’t have the financial means, so he knew he had to get a scholarship. He took the (Scholastic Achievement Test) the first time and was well below what he needed to get into Stanford. He enrolled in an SAT class and took the test a second time and improved his score by 400 points. He ended up getting a full-ride scholarship to Stanford," said Esajan.
Merrill transferred to Yale University for his junior year, and during his senior year there he was drafted by the National Football League’s Tampa Bay Buccaneers and later traded to the Chicago Bears. His football career was short-lived. After two years in the NFL, he was hindered by an injury and decided that football wasn’t his destiny.
"I was not a star by any means," Merrill said. "My shelf life for pro football was very short."
Life after football
He moved on, opening up a restaurant business in New Haven and, along with his Esajan, invested in foreclosed properties to supplement earnings. They purchased four apartment buildings and hoped that "flipping" them — renovating and reselling — would be a lucrative business. It was. In some cases the properties required a major makeover, and Merrill enjoyed the challenge.
He had no prior experience in the real estate industry at the time, and he was the first in his family to pursue real estate as a career.
"I enjoyed the flexibility as an investor and working for myself. No one is controlling my destiny but myself, and being a real estate investor became a dream career because of the flexibility and because of the amount of creativity involved," Merrill said.
His interest in learning more about real estate grew, along with his knack for rehabbing homes. "I began to read two books every single month to learn more about the industry, and I attended a lot of seminars. I was making a commitment by going to the seminars and (I was) consistent about educating myself," he said.
"Than has always attracted energy — by that I mean he loves to challenge his friends and colleagues with physical and mental challenges. When you meet him he gives off the energy that anything can be done," said Esajan.
Building up business
The flipping business was proving to be very profitable, and Merrill’s experiences aided his transition from an amateur investor to a licensed agent. He received his real estate license in 2003.
The following year, Merrill and Esajan teamed up to open CT Homes LLC, in New Haven, Conn. Later, their close friend Konrad Sopielnikow joined them as a business partner. The company’s average cost of rehabbing a house is about $35,000, and in the past three years the team has purchased and resold about 300 homes, with a profit margin of about $30,000 for each property.
"We grew to an office of 16 people over the years. We do more than just buying and selling homes: We have listings; we are a brokerage; we deal with hard-money lending and transactions, among other things," said Merrill. "But our core business is through adding value to properties that are distressed and undervalued."
Though flipping houses has been a rewarding practice for Merrill, he said that anti-flipping laws and some government policies are hurting the industry and aren’t doing much to curb the rising number of foreclosures.
Regulatory challenges
In 2003, the Bush administration addressed the issue of flipping properties and reselling them for an inflated price with a federal ruling that makes recently flipped properties ineligible for Federal Housing Administration mortgage insurance. According to the U.S. Housing and Urban Development Department’s Web site, the ruling "allows FHA to better manage its insurance risk by requiring additional support for a property’s value when a significant increase between sales occurs."
Additional support means that only owners can sell a home to a buyer who will acquire an FHA loan — this was meant to enforce predatory lending practices by preventing flippers from "quick flipping" or reselling homes within a brief period of time. Properties that are bought and resold in 90 days or less are ineligible for FHA insurance.
Also under this ruling, lenders have to assure that the increased pricing of the home is reasonable after rehabilitation, and that buyers aren’t victims of predatory flipping. This can result in the buyers or lenders pointing the finger at the "flipper" purchasing a home for the sole purpose of a marked-up profit — and can be a time-consuming, onerous process for investors, Merrill said.
"There is also that negative stigma attached to flipping properties. The anti-flipping laws are a good thing, but it gives (all) flippers and rehabbers a bad reputation, which is curtailing and making it harder to flip properties," Merrill said.
Flipping 101
Merrill said that even though the laws are hurting the industry as a whole, his company is doing fairly well. His goal is to educate people and encourage them to take risks in purchasing rehabbed homes as an alternative to building more new homes.
From attending training programs and seminars, and listening to real estate entrepreneurs speak, Merrill said he knew he had more work to do and he needed to develop some new plans.
Fortune Builder, an educational program for real estate investors that Merrill launched with Esajan and Esajan’s brother, J.D., now occupies much of Merrill’s work schedule, he said. Through this program, Merrill and the Esajan brothers travel to various cities to speak with groups of real estate investors of varying experience levels.
Merrill’s next scheduled appearance is from Oct. 9-13 in Orlando, Fla. The event is labeled a "Five-Day Intensive Marketing and Wholesale Boot camp," and will feature strategies and techniques on buying and marketing wholesale properties. Merrill said Fortune Builder organizes about 12 seminars per year.
Merrill said he is captivated by video technology, which he said can be an effective marketing tool for agents and brokers. "People are using videos in new ways and it is making it easier for Realtors to show properties to clients, especially with Web sites like YouTube." With a Flip portable video camera at his side, Merrill said he is always prepared to give clients a virtual tour of homes without having to set foot in the house.
As for the future, Merrill said he plans to open another branch of CT Homes in San Diego, Calif., where he recently relocated.
He has also taken up a new sport — he said he tries to visit the beach at least twice a week to play beach volleyball and wants to reach a goal of playing five days out of the week.
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