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Is a We Buy Ugly Houses franchise Worth It?
My wife and I have gone around and around on different approaches to get into real estate investing. So today she shows me the We Buy Ugly Houses franchise. It's 50k to get a franchise and what you get is 2weeks training course, their proprietary software that help you evaluate cost/profit on a property and marketing. But my first thought was to come and ask bigger pockets if anyone has either had experience with them or had their own franchise. I think one of the key points of their model is you have more access to hard money lenders. Any and all advice would be greatly appreciated.
Jeff, get me on your list for Ohio - love to buy buy buy :)
it seems that HVA franchisee's like to state "facts" without having the actual data to back up those facts or the logic to realize that they couldn't possibly back up said claimed "facts" with data because there is no data on individual investor results. Sure sounds good to the shallow thinkers though.
Sure is convenient to tell the "failed solo investor story" and compare it to the "successful franchisee investor" to make things sound rosy.
This is my major issue with what is said in this thread. I get that some people feel they need the hand holding and coaching and education is valuable, I've paid for some myself. But to make ridiculous claims based on facts you can't possibly know does not shine brightly on the company.
There are plenty of investors killing it that started their business from the ground up with no "brand name". This fact alone disputes everything claimed by HVA franchisees. I'm also going to go out on a limb and assume that less than 100% of franchisees have been successful and are still in the business. Oops, Logic fail number 2.
Bring the data or silence the claims.
@Lee S. Regarding "There are plenty of investors killing it that started their business from the ground up with no "brand name". I'd like you to list a couple of real estate franchises that are "killing it" that I could buy. Clearly you have the stats to back that claim up, so I'd like a list of a couple franchises I could buy.
This topic is about franchises. I can identify a bunch of brokerage franchises, but honestly can't think of one that is in the HV space that has the historical staying power of HV. You know plenty, so I'd like to see your list.
Those who are successful or fail would probably be successful or fail with or without a franchise. I'm sure it makes sense for some and not for others. Some people have more experience building businesses and can do it on their own, while others may need a system to walk them through the process. Many franchisees fail in all franchises, while many others succeed. But it doesn't make either option wrong. Do your own due diligence and do what's right for you.
For me, I looked into several franchises and decided I would personally benefit more by putting the money straight into my own marketing and investing. But I also already had a lot of experience building and expanding businesses. So to each their own!! Good luck to all!!
Originally posted by @Chris Martin:@Lee S. Regarding "There are plenty of investors killing it that started their business from the ground up with no "brand name". I'd like you to list a couple of real estate franchises that are "killing it" that I could buy. Clearly you have the stats to back that claim up, so I'd like a list of a couple franchises I could buy.
This topic is about franchises. I can identify a bunch of brokerage franchises, but honestly can't think of one that is in the HV space that has the historical staying power of HV. You know plenty, so I'd like to see your list.
why would I list successful Franchises when my post was all about not needing one? How do I know it's not necessary? Look around and listen on BP, tell me how many of the top investors here have an HV franchise? I can't think of one, so we can start there.
That being said, the main point of my post was the unsubstantiated "CLAIMS" made by the HV franchisee turned coach. Facts matter, not claims, and since I know there is no way to compare an HV franchise to a non HV franchise investor, the claim is empty boasting. Could it be true? Possibly, but Santa Claus could be real too I guess, but we have no proof of either. Until I see actual data I'm going to remain skeptical.
HV can sell themselves on what they have to offer as a franchise, I have no issue with that, just don't make false claims you can't possibly have the data to back up.
Can you show me proof that no HV franchisee has ever gone belly up and regretted their 50k investment? This is data that could actually be gathered.
Originally posted by @Lee S.:
it seems that HVA franchisee's like to state "facts" without having the actual data to back up those facts or the logic to realize that they couldn't possibly back up said claimed "facts" with data because there is no data on individual investor results. Sure sounds good to the shallow thinkers though.
Sure is convenient to tell the "failed solo investor story" and compare it to the "successful franchisee investor" to make things sound rosy.
This is my major issue with what is said in this thread. I get that some people feel they need the hand holding and coaching and education is valuable, I've paid for some myself. But to make ridiculous claims based on facts you can't possibly know does not shine brightly on the company.
There are plenty of investors killing it that started their business from the ground up with no "brand name". This fact alone disputes everything claimed by HVA franchisees. I'm also going to go out on a limb and assume that less than 100% of franchisees have been successful and are still in the business. Oops, Logic fail number 2.
Bring the data or silence the claims.
Wow Lee, Im sorry you feel this way about us, and can't speak for other posts, but I actually don't see any actual facts in mine, so not quite sure what your referencing in your post?
I never stated that things were always "rosy" nor did I mention that 100% of the franchisees are successful, so would ask you to reevaluate what I wrote and please don't make judgement by what you may have heard or seen in the past. I can say that we do certainly have information, facts and figures that can show you potential over time based on ad spend in a given area. Obviously some of this will depend on your own business model and personality, but there is a path you can work toward.
Reality is its not all "rosy" anywhere in this industry, but for me the amount that I pay is more than with the benefits it provides, and apparently also for 700 other franchisees.
Yes, by all means, go ahead and create a company on your own, I'm not saying you shouldn't, and I'm trying to imply that HomeVestors, or any other franchise for that matter, is appropriate for everyone. Im simply responding to a post questioning whether HomeVestors and their "We Buy Ugly Houses" brand is a worthwhile investment, and more than happy to discuss further with those that may feel the national team environment and open share of ideas an support is worth the franchise cost. Or maybe the person thats looking for an easier, and cheaper way to fund flips; we have an in house lending institution and simple, super fast, funding process. Or maybe that investor that is actually frustrated with the amount of time it takes to target advertise themselves; we have an impressive direct mail program, currently running national TV ads, and most areas we already have billboards in place. Maybe, like for me, Id rather walk into a house and be associated with a company that has bought over 70k houses with obvious brand recognition and be able to talk openly and honestly about the sellers issues to see if were a fit; instead of forcing some kind of awkward sales spiel (not saying all non-HomeVestors guys do this, but it is highly prevalent from what Ive seen and not for me)
You see the benefit of HomeVestors is different for everyone and I would never tell someone that its a one size fits all box. I got it, your not interested in the Franchise model, totally fine and I'm not upset. Id hope you would be able to work with HomeVestors guys at some point for the benefit of both parties.
Ive been very happy with the brand and the family I have bought into, and always excited to talk to others about how Homevestors has changed my life for the better.
Thanks Jeff for not outright basking the idea. Your 100% correct with this statement, its not right for everyone but is correct for some. Due diligence in any aspect of this industry is massively important and however you decide to run your business I'd hope more would take the approach you did; weigh the and cons and establish a business thats correct for their personality, experience, and pocketbook!Best of luck to you
Originally posted by @Jeffrey Hotz:
Originally posted by @Lee S.:it seems that HVA franchisee's like to state "facts" without having the actual data to back up those facts or the logic to realize that they couldn't possibly back up said claimed "facts" with data because there is no data on individual investor results. Sure sounds good to the shallow thinkers though.
Sure is convenient to tell the "failed solo investor story" and compare it to the "successful franchisee investor" to make things sound rosy.
This is my major issue with what is said in this thread. I get that some people feel they need the hand holding and coaching and education is valuable, I've paid for some myself. But to make ridiculous claims based on facts you can't possibly know does not shine brightly on the company.
There are plenty of investors killing it that started their business from the ground up with no "brand name". This fact alone disputes everything claimed by HVA franchisees. I'm also going to go out on a limb and assume that less than 100% of franchisees have been successful and are still in the business. Oops, Logic fail number 2.
Bring the data or silence the claims.
Wow Lee, Im sorry you feel this way about us, and can't speak for other posts, but I actually don't see any actual facts in mine, so not quite sure what your referencing in your post?
I never stated that things were always "rosy" nor did I mention that 100% of the franchisees are successful, so would ask you to reevaluate what I wrote and please don't make judgement by what you may have heard or seen in the past. I can say that we do certainly have information, facts and figures that can show you potential over time based on ad spend in a given area. Obviously some of this will depend on your own business model and personality, but there is a path you can work toward.
Reality is its not all "rosy" anywhere in this industry, but for me the amount that I pay is more than with the benefits it provides, and apparently also for 700 other franchisees.
Yes, by all means, go ahead and create a company on your own, I'm not saying you shouldn't, and I'm trying to imply that HomeVestors, or any other franchise for that matter, is appropriate for everyone. Im simply responding to a post questioning whether HomeVestors and their "We Buy Ugly Houses" brand is a worthwhile investment, and more than happy to discuss further with those that may feel the national team environment and open share of ideas an support is worth the franchise cost. Or maybe the person thats looking for an easier, and cheaper way to fund flips; we have an in house lending institution and simple, super fast, funding process. Or maybe that investor that is actually frustrated with the amount of time it takes to target advertise themselves; we have an impressive direct mail program, currently running national TV ads, and most areas we already have billboards in place. Maybe, like for me, Id rather walk into a house and be associated with a company that has bought over 70k houses with obvious brand recognition and be able to talk openly and honestly about the sellers issues to see if were a fit; instead of forcing some kind of awkward sales spiel (not saying all non-HomeVestors guys do this, but it is highly prevalent from what Ive seen and not for me)
You see the benefit of HomeVestors is different for everyone and I would never tell someone that its a one size fits all box. I got it, your not interested in the Franchise model, totally fine and I'm not upset. Id hope you would be able to work with HomeVestors guys at some point for the benefit of both parties.
Ive been very happy with the brand and the family I have bought into, and always excited to talk to others about how Homevestors has changed my life for the better.
You're completely missing my point, which is not IF people choose to pay for a franchise or not. Do I feel a franchise is necessary? Absolutely not, but I don't have an issue that Homevestors exists and provides their service. I know nothing about Homevestors, never had a single thought about it until reading this thread. What made me respond was the nonsensical things stated above.
Now, to get to my point and I'll try to make it as clear as possible. My post was in reference to Mike Hambright's post where in he makes a lot of claims or comparisons between HV franchisees and non franchisees either directly or inferred and you made a similar comment in your post regarding what a non HV investor experiences when talking to a seller. I've never had a seller ask or care what company I work for, period. My point was THESE COMPARISONS CAN NOT BE MADE BECAUSE THERE IS NO DATA TO BACK UP THE CLAIMS!!!! Is that clear? One more point, I AM NOT SAYING THAT HV CAN NOT STATE THEIR OWN SPECIFIC DATA FOR THEIR BUSINESS MODEL AND FRANCHISEES, what I'm saying is you can not compare this data TO ALL OTHER INVESTORS BECAUSE THE DATA FOR ALL OTHER INVESTORS DOES NOT EXIST. Therefore, you can not claim "BETTER" or worse for that matter.
Feel free to prove me wrong, show me the data and source for the data for all non franchise investors as far as marketing cost to results to whatever other stat you want to compare. Get my point? They don't exist. Telling a few stories about some non franchise investors "struggles or failures" to make a point that the franchise model is better makes one look silly and illogical.
HV has to go by the value they add specifically for the cost, that is all that matters. If franchisee's feel that is a good value then great, move forward.
Originally posted by @Steven Gesis:
Jeff, get me on your list for Ohio - love to buy buy buy :)
Steven. ...do you do any deals in central Ohio?
@lee
Hi Lee, your correct that there isn't data relative to success outside the HomeVestors system, so obviously hard to make direct comparison between the two. However, what we can do inside HomeVestors is give data to backup the ability to be successful over time, and what a given advertising spend should relate to leads/contracts/purchases in a given area (plus all the other benefits) Nothing is perfect, but in any speculative industry knowledge is power, right, and certainly allows for increase in probability of success.
I wont apologize for stating a fact about someone who spent 7k on advertising without receiving any leads. You see, HomeVestors does have the data relative to how many impressions that should have produced. I can prove, with solid fact, that that investor haphazardly through money into a marketing mailer that was unsuccessful, and expensive. I can't speak about any of Mikes statements, unfortunately, but again suspect likely we also have data to give investors a greater probability of success. With that statement, ill throw out the disclaimer that each office is individually owned and operated, so obviously not all franchisees will be successful (which is also subjective, and certainly "success" is different for everyone)
Again, this post is about someone who had an interest in HomeVestors at at some point and I simply offering the ability for them to reach out to me if they have specific questions relative to that business model. Im more than happy to provide the good, bad, and the "ugly" and allow those interested investors the ability to make a decision on their own.
@Jeffrey Hotz it seems you understand the point I was trying to make now. However, your last post has some contradictions I think. I'll preface this by saying I really don't care about HV, i see nothing wrong with the business model. However, you state that you have statistics regarding marketing and I would hope that you do. This is your proof that hv works, yet you throw in the disclaimer that every office is different and there are no guarantees. This would confirm what I think most investors believe in that a successful investor will Be successful with or without hv and the failed investor will most likely fail either way. Your statement shows that it's not the "systems" but the investor that is important, otherwise all results using your system would be equal accounting for regional variance.
It really is a bad look to take one failed non hv investor marketing plan and apply that to all non hv investors. Would you like that I find one failed hv investor and apply that to all to make the opposite point? Logic fail.
My only advice is to sell the HV model on internal data/results, period. The moment you start comparing hv to non hv data you look fraudulent.
@Lee S. Please, if you don't care about HV then why continue to make me respond back? I got it, you don't agree with what we are saying or posting, but your reading into every word, statement, and post like this is a debate, and I'm not here to do that.
Again, this post is about whether HomeVestors and our "We Buy Ugly Houses" brand is worth the spend. Again, I would ask for those interested to please reach out, get all the information first hand, talk to other franchisees and decided if the HomeVestors brand is appropriate for you or not. More than happy to continue this post with discussion from investors that have interest to learn about the benefits of the company, and the value we bring.
@Lee S.I read your post in the context of a franchise. After re-reading a couple times, I "get it" about your posts... but you are not comparing franchises, but franchise vs. non-franchise.
HV is like a McDonalds. Yes, we individuals can flip burgers on our own grill, and yes we can make them better than McD. But cars don't line up at your curb waiting for you to deliver a burger in 60 seconds. Apples and oranges.
The average 'wholesaler' on BP, I would bet, doesn't complete one transaction per year. the average HV franchise completes dozens. I am confident that is the case, even though I can't prove it because I haven't seen everyone's tax returns.
I had an opportunity to buy in to HV back a decade ago since the Raleigh NC area had an opportunity. I didn't take it after looking at their circular and spending about 2 months considering it (along with help from SCORE and other advisors). In hind sight, timing would have been great and I probably would have made a killing. I did Ok as an independent, but I clearly see the value in their type of operation. This is my last post here. Everyone can reach their own conclusion.
Originally posted by @Cynthia DeVol:
Originally posted by @Steven Gesis:Jeff, get me on your list for Ohio - love to buy buy buy :)
Steven. ...do you do any deals in central Ohio?
Not at this time, but I love Central Ohio, being a buckeye alum, my heart is always in CBUS :)
I am a former franchisee who has to weigh in here. In my experience the big issue with an HVA franchise is that territory is not protected. What happened in my particular market is that initially there were 5 franchises operating and all doing very well. At that time I had considered the decision to join the franchise one of the best decisions of my life. I was scoring amazing off market deals and making great profits. That joy faded quickly and harshly however as HVA continued and continues as we speak to radically saturate the area with franchises. We now have 17 in a relatively small area and most are struggling. Then what happens is that the leads go to the big spenders.The more you spend the more leads you get but the problem is that you are just taking those leads away from a fellow franchisee, not producing more leads for the group as a whole. In the beginning I was getting an outstanding return on a minimal investment and then things devolved to the point where I was getting virtually no return on my investment. I have no choice to believe that marketing dollars are a substantial source or revenue for HVA. They claim to not make one penny on marketing dollars but frankly I don't believe those claims.I was told that our group should be spending 100k a month on advertising. Corporate will tell you that the answer to every problem is to spend more money. They hammer that point home at every meeting, the message never stops. All of the big success stories within the franchise spend big, and you should too. Well the problem is that the numbers in my market didn't support that theory. I was told by management that they would show me similar sized markets with large numbers of franchises succeeding. I am still waiting for that that magical data to be presented to me. I can only surmise that it doesn't exist. I am still in touch with the franchisees in the area and the mood is somber for sure. Corporate says that as the group spends more and as the brand expands everyone will be swimming in deals, not the case. Quite the opposite. A great number of the calls that I received at the end were people asking to be taken off of the mailing list since they has been saturated with marketing materials over and over again. In summary more franchisees spending more on advertising is not producing a sufficient amount of leads for everyone to thrive.
Someone mentioned earlier in this thread that you should only invest in this opportunity in larger metro areas. I would argue that the opposite is true. We have a small market about 90 minutes south of us and there is a lone franchise there and they can barely handle all of the phone calls they get and they are doing a robust wholesaling business. In my experience this system works great if you are in an area where there won't be a over saturation of franchises.In that case the system works extremely well. If you intend to jump in to a more populated area where franchises can proliferate your path to survival will depend upon your ability to outspend your "comrades". On the upside I met a lot of great people and made connections that will serve me well into the future.Before you join see how many franchise are in the area if any and be prepared to either jump ship and have very deep pockets to survive if the area becomes saturated with franchises.
Originally posted by @Lane Ewert:
My wife and I have gone around and around on different approaches to get into real estate investing. So today she shows me the We Buy Ugly Houses franchise. It's 50k to get a franchise and what you get is 2weeks training course, their proprietary software that help you evaluate cost/profit on a property and marketing. But my first thought was to come and ask bigger pockets if anyone has either had experience with them or had their own franchise. I think one of the key points of their model is you have more access to hard money lenders. Any and all advice would be greatly appreciated.
Lane:
I have a HomeVestors franchise in North Carolina which I purchased the end of 2013. After investing full time since 2005 and having purchased hundreds of properties, I wish I'd bought the franchise sooner. Feel free to write me anytime and I'm more than happy to discuss all the advantages HomeVestors offers to investors.
Originally posted by @Mike Hambright:
I'm a HomeVestors franchisee, and many of the short sighted comments to this original post explain why 90%+ of those that try to invest on their own fail. Yes, HomeVestors is a franchise system. Yes, they charge fees...that's what franchisors do. It's the same for McDonalds and Subway. Could you create your own burger shop? Yes? Could you ever compete against McDonalds....it's unlikely.
I started my first HomeVestors franchise (Yes, $50K franchise fee...but there is now a cheaper option), nearly 5 years ago. My wife and I had zero residential real estate experience...had never bought a single house. By working hard, leaning into the HomeVestors system and brand, and working hard (yep...twice as hard as everyone else), we bought 65 houses in our first year. BTW - this was 2008 when the market was "crashing".
The primary things that benefit HomeVestors franchisees are:
1. The Brand - over $200 million has been spend advertising and building the brand. It's known from coast to coast. It's a well known fact that people generally trust national brands, and would prefer to work with national companies that have a reputation to uphold. We're professional, and that allows us to..all else equal...be much more successful in getting contracts than the 'next guy'. It generally also allows us to buy houses at deeper prices, because we're more trustworthy.2. Lead Generation - nobody can compete with us. I won't dwell on this. This is the single most important thing in real estate investing. As an investor...you have to decide...do you want to be a "Real Estate Investor", and focus on what makes you money (i.e. buying and selling houses), or trying to become an advertising professional? It's hard to do both well. Most that do it well are doing something illegal...like bandit signs (sloppy, and illegal about everywhere), or stealing the We Buy Ugly Houses terms for online advertising (which HomeVestors protects like a hawk - and has won every lawsuit protecting).
3. Ongoing mentoring and support - The franchise model has evolved over the last few years to include a 'Development Agent', or coach and mentor. I've purchased over 250 houses at super deep prices over the last 4 1/2 years. I'm now a Development agent, and coach and mentor a large and rapidly growing group of franchisees from coast to coast. Most real estate investors are on an island. They don't have anyone to learn and grow with. Others in their markets don't talk to them, as everyone is afraid of 'arming' their competition. HomeVestors team based approach allows us to surround ourselves with hundreds of other people doing the exact same thing as us, and generally willing to share all we know with each other. This is completely invaluable in an ever-changing industry like ours. Also - for most investors across the country, there's very little focus on what that individuals GOALS are. To be frank, this is such a feast of famine industry that most investors goal is "More". As a mentor and coach, I spend a lot of time working with people on what their goals are....and a lot of focus on treating this as a BUSINESS, when most others treat it like a HOBBY. BTW - some of the folks I coach now buy more houses than I do!
4. The Network - what else can I say. Over 300 franchisees. Purchased over 50,000 houses in the last 16 years (who else can even say they've been around for that long...in good and bad markets). I'm proud to be associated with the best group in real estate investing. For me...very truthfully, If I wasn't able to join HomeVestors nearly 5 years ago...I would not have made it as a real estate investor. Truth is...I wouldn't have been willing to work as hard to climb the learning curve, as I would have had to figure our every component of this business on my own.
For the record, about 18 months into my franchise, my wife and I purchased a 2nd franchise in the market next to us. Franchise agreements last 5 years. If in good standing....there's no cost to extend. Despite the fact that my wife and I are smart people....could go do this on our own and escape paying fees that we pay now...we're in the process of renewing our franchise as we speak. To be frank, we never even spoke the words "should we renew". I'm part of a world class team, and always will be.
For the haters - yep....we're not for everyone. Despite the fact that most fail in real estate investing, heck, even real estate investing isn't for everyone. If you don't understand that generally speaking, franchise models, are significantly more successful than non-franchise businesses...than you don't 'get it'. If you're hung up on the fees...consider that those things that you're being charged for, in many ways, are simply paying for things that you'd have to pay to create on your own (that's what good franchise systems do).
Mike Hambright
HomeVestors Franchisee (We Buy Ugly Houses)
Coach and Mentor
Originally posted by @Karen Rittenhouse:
Originally posted by @Mike Hambright:I'm a HomeVestors franchisee, and many of the short sighted comments to this original post explain why 90%+ of those that try to invest on their own fail. Yes, HomeVestors is a franchise system. Yes, they charge fees...that's what franchisors do. It's the same for McDonalds and Subway. Could you create your own burger shop? Yes? Could you ever compete against McDonalds....it's unlikely.
I started my first HomeVestors franchise (Yes, $50K franchise fee...but there is now a cheaper option), nearly 5 years ago. My wife and I had zero residential real estate experience...had never bought a single house. By working hard, leaning into the HomeVestors system and brand, and working hard (yep...twice as hard as everyone else), we bought 65 houses in our first year. BTW - this was 2008 when the market was "crashing".
The primary things that benefit HomeVestors franchisees are:
1. The Brand - over $200 million has been spend advertising and building the brand. It's known from coast to coast. It's a well known fact that people generally trust national brands, and would prefer to work with national companies that have a reputation to uphold. We're professional, and that allows us to..all else equal...be much more successful in getting contracts than the 'next guy'. It generally also allows us to buy houses at deeper prices, because we're more trustworthy.2. Lead Generation - nobody can compete with us. I won't dwell on this. This is the single most important thing in real estate investing. As an investor...you have to decide...do you want to be a "Real Estate Investor", and focus on what makes you money (i.e. buying and selling houses), or trying to become an advertising professional? It's hard to do both well. Most that do it well are doing something illegal...like bandit signs (sloppy, and illegal about everywhere), or stealing the We Buy Ugly Houses terms for online advertising (which HomeVestors protects like a hawk - and has won every lawsuit protecting).
3. Ongoing mentoring and support - The franchise model has evolved over the last few years to include a 'Development Agent', or coach and mentor. I've purchased over 250 houses at super deep prices over the last 4 1/2 years. I'm now a Development agent, and coach and mentor a large and rapidly growing group of franchisees from coast to coast. Most real estate investors are on an island. They don't have anyone to learn and grow with. Others in their markets don't talk to them, as everyone is afraid of 'arming' their competition. HomeVestors team based approach allows us to surround ourselves with hundreds of other people doing the exact same thing as us, and generally willing to share all we know with each other. This is completely invaluable in an ever-changing industry like ours. Also - for most investors across the country, there's very little focus on what that individuals GOALS are. To be frank, this is such a feast of famine industry that most investors goal is "More". As a mentor and coach, I spend a lot of time working with people on what their goals are....and a lot of focus on treating this as a BUSINESS, when most others treat it like a HOBBY. BTW - some of the folks I coach now buy more houses than I do!
4. The Network - what else can I say. Over 300 franchisees. Purchased over 50,000 houses in the last 16 years (who else can even say they've been around for that long...in good and bad markets). I'm proud to be associated with the best group in real estate investing. For me...very truthfully, If I wasn't able to join HomeVestors nearly 5 years ago...I would not have made it as a real estate investor. Truth is...I wouldn't have been willing to work as hard to climb the learning curve, as I would have had to figure our every component of this business on my own.
For the record, about 18 months into my franchise, my wife and I purchased a 2nd franchise in the market next to us. Franchise agreements last 5 years. If in good standing....there's no cost to extend. Despite the fact that my wife and I are smart people....could go do this on our own and escape paying fees that we pay now...we're in the process of renewing our franchise as we speak. To be frank, we never even spoke the words "should we renew". I'm part of a world class team, and always will be.
For the haters - yep....we're not for everyone. Despite the fact that most fail in real estate investing, heck, even real estate investing isn't for everyone. If you don't understand that generally speaking, franchise models, are significantly more successful than non-franchise businesses...than you don't 'get it'. If you're hung up on the fees...consider that those things that you're being charged for, in many ways, are simply paying for things that you'd have to pay to create on your own (that's what good franchise systems do).
Mike Hambright
HomeVestors Franchisee (We Buy Ugly Houses)
Coach and Mentor
So well said, Mike.
Jim and I were full time real estate investors for 8 years before buying the franchise. We had a full service real estate brokerage, a property management company, over 100 rentals and 16 full time employees.
Then we bought the franchise. Our business more than doubled the first year. The second year we closed our brokerage and sold our property management company. The franchise business shot us so far ahead of what we expected that we got rid of all the other business that was distracting us from the HVA focus.
I can't say enough about the franchise and we now train franchisees up and down the east coast because we believe everyone who wants to invest should be made aware of the huge opportunity HomeVestors offers.
Thanks for your response to this thread.
Originally posted by @Victor Chiappetta:
I am a former franchisee who has to weigh in here. In my experience the big issue with an HVA franchise is that territory is not protected. What happened in my particular market is that initially there were 5 franchises operating and all doing very well. At that time I had considered the decision to join the franchise one of the best decisions of my life. I was scoring amazing off market deals and making great profits. That joy faded quickly and harshly however as HVA continued and continues as we speak to radically saturate the area with franchises. We now have 17 in a relatively small area and most are struggling. Then what happens is that the leads go to the big spenders.The more you spend the more leads you get but the problem is that you are just taking those leads away from a fellow franchisee, not producing more leads for the group as a whole. In the beginning I was getting an outstanding return on a minimal investment and then things devolved to the point where I was getting virtually no return on my investment. I have no choice to believe that marketing dollars are a substantial source or revenue for HVA. They claim to not make one penny on marketing dollars but frankly I don't believe those claims.I was told that our group should be spending 100k a month on advertising. Corporate will tell you that the answer to every problem is to spend more money. They hammer that point home at every meeting, the message never stops. All of the big success stories within the franchise spend big, and you should too. Well the problem is that the numbers in my market didn't support that theory. I was told by management that they would show me similar sized markets with large numbers of franchises succeeding. I am still waiting for that that magical data to be presented to me. I can only surmise that it doesn't exist. I am still in touch with the franchisees in the area and the mood is somber for sure. Corporate says that as the group spends more and as the brand expands everyone will be swimming in deals, not the case. Quite the opposite. A great number of the calls that I received at the end were people asking to be taken off of the mailing list since they has been saturated with marketing materials over and over again. In summary more franchisees spending more on advertising is not producing a sufficient amount of leads for everyone to thrive.
Someone mentioned earlier in this thread that you should only invest in this opportunity in larger metro areas. I would argue that the opposite is true. We have a small market about 90 minutes south of us and there is a lone franchise there and they can barely handle all of the phone calls they get and they are doing a robust wholesaling business. In my experience this system works great if you are in an area where there won't be a over saturation of franchises.In that case the system works extremely well. If you intend to jump in to a more populated area where franchises can proliferate your path to survival will depend upon your ability to outspend your "comrades". On the upside I met a lot of great people and made connections that will serve me well into the future.Before you join see how many franchise are in the area if any and be prepared to either jump ship and have very deep pockets to survive if the area becomes saturated with franchises.
Interesting experience, Vic. We've had the opposite. We were the very first franchise in our area of North Carolina and therefore, as you say, got all the calls. However, we now have 12 franchises here and business is even better. Why? Because the group pools all their marketing money together every month so there is a LOT more being spent than Jim and I could spend on our own. We are now on over 20 billboards and have both local and national television ads running every single week. I could not create this on my own, for sure. I don't have the time, the money, or the expertise. And because of the volume HomeVestors does nationally, we get far better prices for everything including television time and billboard space.
Our group has become the 300 pound gorilla in the market in just over 2 years. All of us. Clients definitely like the credibility the name brings and pretty much every franchise has had the experience of being told that someone else offered more, but the seller chose to go with HomeVestors because they know we are held accountable by the franchise association and that we will close when we say and with cash. The brand brings tremendous peace of mind to sellers.
And there is never a shortage of opportunity for anyone in the group. We all come from a belief in abundance, not scarcity. It is true, the numbers show that you speak with about 17 sellers for every property you buy and there are statistics on how much it costs to buy a property. If you want to buy more, you spend more. The metrics are coast to coast from years of tracking and we now have over 900 franchises across the country being tracked. I promise you, it works. But I also know it's not for everyone. My uncle owned 8 McDonald's franchises and I wouldn't want one if he gave it to me. Different strokes for different folks.
I recommend everyone find what they love in the business and focus there. Be as big or as small as you want. I'm happy to speak with anyone who's interested in a franchise about my experience and I'm also happy to answer questions about anything related to real estate investing. This is an AMAZING business to be in no matter where you are or what the economy!
For people considering getting into the real estate investing business, I recommend you read Michael Gerber's "The E-Myth Revisited". It speaks to considerations about being part of a system, probabilities of success, and provides a plethora of useful tips. I joined HomeVestors in 2012 on a 5 year contract. I re-upped for a new 5 year deal a couple months ago...glad to talk with anyone who has questions.
Has anyone recently bought into this franchise? If so, how is it going? I would also like to hear from anyone that has had experiences with HV.
@Jasmin Ortiz-Campbell - I opened my HomeVestors franchise in January 2014 and love it. Feel free to reach out if you'd like to discuss!
I purchased a franchise 6 months ago after following the company for almost 20 years. Feel free to reach out to me also!
@Jasmin Ortiz-Campbell I started back in August and probably like you, was hesitant. But I've had a really great experience so far. I'm happy to share further if you'd like. Good luck!