Home Vestors, is it a good entry point?

Question

I have been getting some general information on my local REI scene. I have found and plan on attending the next local group meeting and Ive reached out to a local Investor with some questions. Just so happens that person is a home vestors franchise owner. So among the answers I received one of them was their franchise may be a good choice if finding a mentor did not work out. I did some digging and received a good amount of info about the company and what it would look like to buy into the franchise. My questions for everyone here is do they have any experience with this company and would it be fair to consider this way of entering the REI world instead of seeking a mentor? My plan is to get into the the investor world this year and want to be in it for the long haul so I just want some advice/thoughts on this subject.

From what i'm Told the general marketing spend is between 3k-5k a month to find one viable deal. Generally there deals are direct from home owners and they shy away from MLS / Probate/ etc... Anyway, I look forward to yalls replies/advice.

Jeffrey Hotz · Answer

@Randall Gonse I’d like to comment as a Franchisee of about 6 year (man time flys!).  Also in full disclosure I also function as a Development Agent for Ohio Franchisees, generally meaning I’m one of the local franchisees that act as on going local support.

Concerning the post above, unfortunately Ken passed away in 2005, and yes recently HomeVestors was sold, but so far I’ve been highly impressed with the new owners and this sale will benefit me as a franchise considerably.

Now back to HomeVestors (we call it HVA).  This is a very specific franchise model that isn’t right for everyone, so yes the above quote is correct in that I would certainly reachout to any Franchisees and figure out if you think right you.

General difference between us and a coach/mentor is entirely on the front end as we do provide actual leads to people looking to sell their house at a discount.  Then a lot of the systems and support I assist on is relative to managing and speaking to these sellers to be able to purchase properties at prices that make sense to us.  And we know that you make your money in the buy, not the rehab.  They also will fund 100% purchase and rehab, and cheapest and easiest hard (they call it soft) money I’ve found.

If you are interested in buying houses direct from Homeowner, are looking to be a high volume business (not a hobby), and have capital available for Franchisee fee plus on going monthly ad spend, I’d keep digging into this; If not, this certainly isn’t the right business for you.

Let me know how I can help, whether you decide to jump in or not.  Always happy to chat.

Karen Rittenhouse · Answer

Hi @Randall Gonse

I'm a HomeVestors franchisee in North Carolina and I can't say enough about the franchise. I truly believe anyone doing this business full time (which we consider to be 12 or more houses per year) should get a franchise.

My husband and I started investing full-time January 2005. We purchased our HomeVestors franchise at the end of 2013. At the time we purchased, we were buying about 25 houses per year, had a full service real estate brokerage, a property management company, 16 full-time employees, and were coaching/training about 65 business how to invest in real estate.

Then we bought the franchise and our business doubled the first year. We subsequently sold our property management company and closed our brokerage so we could focus full-time on HomeVestors.

The reasons we purchased the franchise were many. We looked into the company for over 3 years before deciding. Some of our primary reasons included:

• Laws and regulations change yearly. We were tired of keeping up and thought it would be wonderful for someone else to do the heavy lifting. 
• Attorneys General nationwide do not like real estate investors, understandably. We are not licensed and consumer protection is the AGs first concern. Attorneys General are fine with HVA franchises because they know we answer to a higher power and that we must color within the lines. 
• Once you're approved for a franchise, you're approved for some of the best funding available.
• HVA takes care of all of the marketing and they have statistics on all responses to it nationwide. With over 900 franchises currently, that's a lot of responses to track! Their marketing is second to none which is why we get so many superior leads.

In fact, HVA tracks everything their franchisees do and can tell you that, nationwide, it takes about $2300 in marketing to buy a house. This is why we recommend you start with $3000 per month marketing so you are able to average purchasing a house a month. They can tell you how many appointments it takes to buy a house, how many leads to make an appointment, all the necessary statistics about your market.

And you have a local coach who is successfully doing what you want to do who will be responsible for your success.

There is so much that comes with the franchise. I would love to discuss this with you anytime. Thanks for asking.

Adam Schneider · Answer

@Randall Gonse It's a good question you ask. My recommendation is to first determine how much volume you want to do, what your experience level is, what self-funding you have available, and how much success you've had finding inventory on your own. Your answers to those questions will influence whether it makes sense to join HomeVestors or not. My personal experience is that I came from 2+ decades in the corporate world and decided to do REI in 2012. I joined HomeVestors here in Raleigh, NC -- not too far from you. The initial contract I signed was for 5 years. In 2017, I signed for a second 5 year contract with HomeVestors--I've had a great experience with the operation. As with Jeff Hotz, I'm a Development Agent as well as franchise operator. I joined for some of the same reasons that Karen Rittenhouse mentioned, but also for different reasons. Karen was experienced in REI before joining HVA -- I had no experience. I joined a franchise because I wanted the support of learning the systems and standards of the industry, wanted the leads, hated dealing with some of the behind the scenes stuff that the HVA home office handles...if you are ever in Raleigh, feel free to let me know!

Tomas Satas · Answer

@Adam Schneider

As would I.

Linda D. · Answer

@Adam Schneider Hi! If you are open to a conversation I would like to learn more.

Linda D. · Answer

@Karen Rittenhouse Hi! Would love to learn more. Possible to talk at some point?

Roy N. · Answer

These are the "We Buy Ugly Houses" franchise people out of Dallas.   It was a good deal for Ken D'Angelo.  More recently, I believe they were bought by a hedge/capital fund last year.   They ran into a few snags with their attempts to move into the Canadian market a few years ago.

Do your homework before writing the big cheque for a franchise.

Home Vestors, is it a good entry point?

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