Your thoughts on Rent to Own w/ Home Partners of America (formerly Hyperion)

[Corey Westermann]

I have a close friend whose realtor has convinced him to apply for Home Partner of America's rent to own program.  I believe this company used to be Hyperion Homes.

He asked what I thought - I told him I had no idea.  Does anybody here have any experience with these guys or guys like them? 

Sounds like it would go something like this - They buy the house you pick, you agree to a 2-month security deposit and to rent it for above market rates, you then have the option to buy it after a year at 5% above their original purchase price provided you can finance it.

Are these guys and their programs legit? Is the process as transparent as they make it seem? 

Thanks in advance.

[Eddie Egelston]

I am a Realtor in Illinois and I have represented HPoA in 2 purchases. I also sought them out to buy my personal residence, but I accepted another offer before receiving theirs. "Scam" is not a word I'd use to describe them, unless I was an uneducated tenant that didn't understand some very basic concepts of what the lease program was about. I think their website does a fine job of explaining the program and a lot of the important details. Here are the pros and cons of working with them, from the perspective of agents, tenants and sellers:

Pros:

Tenants get many more potential rentals to choose from. (In my market it gives them about 5-10x the selection.)

Agents representing a tenant can instead represent a buyer. (Commission difference on a $250k house might be $1000 vs $6000)

HPoA offers cash

Tenant gets certainty of a renewable lease and a professional management company, versus the unknown of a private landlord

Cons:

In my market, renting through HPoA means paying about 10% more than market rent. Could vary more or less

The 5% annual purchase price increase is too rich for all but the hottest markets. Planning to buy years down the road will be prohibitively expensive for almost all tenants

Standard rent increase of 3%, may be in line with the market but is not what most private landlords would do. Most tend to keep rents fairly flat to prevent vacancy

Process to buy and make-ready a property can take 3-6 weeks longer than a standard lease of a vacant home

Side notes:

I have observed HPoA list their properties for rent on MLS once tenants vacate. They start by listing for approx what the tenant was paying. This can be very out of whack with market values. They stubbornly stick to their guns for months and months before lowering the listed rent to something reasonable. In that time they have potentially lost tens of thousands of $$$ in revenue. Not sure if they are stupid and don't care, or if they need to do that to stop former tenants from coming back to rent for newer lower price.

Most potential tenants I talk to are very intrigued by the benefits, and usually the timing is the biggest reason they don't try to go forward with the program. (For example tenant needs a place in 30 days, the program can take 6 weeks.)

[Ian Walsh]

I am not a fan of rent to own in general.  It has a lot flaws.

[Sandra Brickey]

I’ve been researching this option for clients as well. I’ve not used them yet but feel like it could be a good option for some circumstances.

One thing that I noticed is the renter pays a 5% premium to purchase the home, based on the ‘MLS list price' not the price Home Partners actually pays for the house. I am assuming Home Partners pocket the difference between List price and what they actually end up getting the house for. Then they turn around and sell it for 5% over original ‘MLS List Price',not actual purchase price. My concern with this is that the house would likely not appraise for the higher price when the renter wanted to get financing, in most markets. Then you have no leverage to negotiate a better price based on appraisal.

I felt the rental rates Home Partners were advertising in SW Florida were ok. Not too high or too low. 

If you are up front with clients about all the pros and cons, and they do choose to rent from Home Partners, but decide not to buy that particular house, hopefully they will come back to you to find them another home when they are ready to purchase. 

I’m still investigating but will likely try to leverage this as an option. There are not a lot of annual rentals in our area because we have a ton of vacation rental in our area. 

[Bella Allen]

🛑✋🛑✋🛑✋🛑✋🛑✋🛑✋🛑✋🛑

do not collect 200 when you pass GO! These people are scammers there is a facebook group for victims who have been taken advantage of. Its really sad to see so many people American dream snatched away because of greed https://www.facebook.com/groups/HomePartnersofAmericaScandalExpose/

[Angelique Laret]

I googled: Home Partners of America     But I am not able to find a website for them.  Does anyone have their website or contact info? 

[Alberto Nikodimov]

I recently had a weird experience with Home Partners. I wanted to see if anyone had a similar experience as a realtor or as a tenant.

Here is the story:

I had a listing posted for sale and I received a call from a gentleman asking if I also have the property listed for rent. I said no and then he started questioning me. I felt like I was interrogated and the other party was very upset. After few minutes of convincing him that I'm not trying to scam anyone and I simply have an exclusive agreement to sell with the seller, he trusted me and started sharing his experience. He told me he was talking to two different realtors who had my listing advertised for rent on Zillow without disclosing the address. He reached out to one of them and he mentioned their criteria in order to get approved for the rental property. At that point he was not suspecting anything and he gave them all the info they requested. Then he proceeded asking to see the home. This is when things started getting weird. They told him he can drive by but he cannot see the home until his application is approved. They gave him the address and he agreed to drive by. Up until this point they are not mentioning anything about Home Partners. When he drove by the home he saw our For Sale Sign and felt that something is wrong and decided to call me.

The potential "Tenant" sent me screenshot of the entire conversation and also a recording of the call where he confronted them and asked if this is a scam. They then said this is not a scam but they will have to give him a call back. He was given the details of another person who eventually called him and started selling the Home Partners program. Meanwhile the zillow listing was deleted.

I looked up both of the people who were talking to him and they were both licensed agents in Florida. The listing on Zillow was actually listed under an agent. The phone numbers they were texting and calling from were also matching the ones listed on the MLS. I tried contacting them, left multiple messages and text and never heard back. I won't mention any names because I haven't heard their part of the story but I wanted to see if anyone else had a similar experience.

I don't agree with the misleading, sneaky approach. Even if they are not doing anything illegal, they are definitely not very ethical.

Here is a quick summary of their actions:
- Using listing pictures and information without permission.
- Listing home for rent without agreement with the owner.
- Misleading a person who was rushing to find a rental property for his pregnant wife before her delivery.
- Not replying to my calls and messages to give explanation.

 

[Jon P.]

@Corey Westermann

Can you explain a bit more how this works.  Interesting topic, but of course skeptical at first.

[David A Bailey Jr]

Interesting thread. Thanks to everyone who shared. I've seen their names mentioned at the brokerage I work under. It's always good to see/hear everyone's experiences and stories. 

[Daniel Sperling]

FWIW, Home Partners of America was recently acquired by Blackstone's Real Estate Income Trust ("BREIT"). See: press release

[Robert Frazier]

There was an article in the WaPo about this earlier this year. They are legit programs but it is rare that the renter will ever purchase. It’s a great way to get a rental of a home that you want if you’re willing to pay market rate. The fund land-banks the purchase and either rents or sells again. During a market of increasing value it is a good play.

[Nagib Kaik]

This is a very interesting topic. Most of the reviews and comments are from the tenant/buyer perspective.

Does anyone here have any experience with them as Property Owners? I wonder if anyone had issues receiving their down payment or monthly rent payments. I have read a mix of reviews online, but I always our community here at Bigger Pockets a bit better.

Thanks in advance.