Home Union - homeunion.com reviews
Redwood City, CA · Member since 2014 · 14 posts · 3 votes
Home Union - homeunion.com reviews
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Investor · Glen Ridge, NJ · Member since 2016 · 2 posts · 9 votes
10yHomeUnion Exceeds My Expectations
My real estate experience started when I purchased a condo in Hoboken, New Jersey, in the early 2000s. I lived there for a while, and then converted it into a rental. Over the years, I was able to weather both the financial crisis and Hurricane Sandy while keeping my rental and generating monthly cash flow.
Now that the local housing market is up in Hobeken, I made the decision that it was time to exit the market, as it’s been extremely unfriendly with rent control laws and taxes. Not to mention, tying up half a million in 1 tiny box is a significant chunk of my net worth.
The Next Steps
Once I decided that I would sell my condo, I had to consider multiple factors:
- 1)Where to invest? I considered a few local New York/New Jersey spots to invest in, but they were too expensive and came with high taxes and home prices.
- 2)How do I invest passively? After self-managing for years and dealing with 2AM phone calls, terrible contractors and the rest of it, I wanted to make enough free cash flow to hire a property manager. This way I could truly be an investor, not a landlord. This was so important to me that I even strongly considered REITs as an alternative!
- 3)What is the most advantageous way for me purchase real estate? When I started to calculate the tax bill, I realized that a 1031 exchange was my best option.
1031 Exchange
A 1031 exchange was the best option for me as I had been depreciating the place as a rental for the past few years, which provided a lovely tax shield. The challenge was that if I sell the property, I would have to pay income tax recapture on top of the capital gains tax - OUCH!
How HomeUnion Helped
Luis from HomeUnion reached out to me around this time, and he informed me that HomeUnion could meet the fairly short timelines required to complete a 1031 exchange transaction. Even better, HomeUnion could help me split proceeds into multiple cash flow-positive homes and secure GSE mortgages to boot. To be honest, it sounded too good to be true. How do I know these are legit? Do I really want to buy homes I've never seen?
I ended up visiting two locations, Chicago and Tampa, to meet HomeUnion’s local region managers and check out a few properties, which included the ones I was bidding on. Both local region managers struck me as knowledgeable, experienced and skilled at what they do. These meetings got me comfortable with HomeUnion as a company and as a partner.
Fast forward a few weeks, and we've just completed the 1031 exchange transaction! I was able to split my Hoboken condo into 6 single-family houses (technically 5 as we added additional funds to purchase the last home) in 5 states using a 1031 exchange.
By diversifying into multiple markets, I feel much safer for the following reasons:
- 1.I'm not as worried about a big storm wiping me out, as I now have additional cash flow-generating properties. This means I'm well covered, even if I have an issue with one of them.
- 2.I don't need to stress about keeping the places 100% occupied, as the cash flow is sufficient to allow for some vacancy.
- 3.Best of all, the cash flow is expected to be enough to cover HomeUnion’s management fees, which reduces my hassle, and I can truly invest passively.
HomeUnion’s Pricing
Some may view their pricing as a premium product - I would agree it is not the cheapest route. I've always been a ‘do-it-yourself’ kind of person like many BiggerPockets members, but after my experience, I would say HomeUnion delivered a lot of value and has been worth every penny spent.
I believe they provided me with a service that went above what I could have handled alone (unless I quit my day job which I enjoy and wish to keep). I feel that I am in a much stronger position, and have advanced my real estate portfolio multiple years ahead by making this move.
Current Status
Three properties are now in rehab with HomeUnion, where they are handling the whole process of repairs/maintenance and working with contractors. I will keep you posted as they progress, but so far they are on track to exceed expectations.
The other three properties have been tenanted and the early outset for HomeUnion’s management team looks good.
_________________
Disclosure: I volunteered to write this because I saw some good posts here, but nothing on this specific topic and not many detailed accounts of HomeUnion from the community. When I mentioned this to HomeUnion, they offered me a free month of asset management as a thank you, but this has not affected my post and I've tried to be as unbiased as is humanly possible. In addition, we are at a stage where we have just completed the transaction: 3 properties are tenanted and 3 need some minor rehab and need to be filled. The early outset for management and rehabbing looks good but I can't vouch for that yet. I will create an update in a few months with my findings.
48 Replies
- Redwood City, CA · Member since 2014 · 83 posts · 19 votes12y
As an employee of HomeUnion, I'm not going to answer the specific questions, but if anyone has questions about HomeUnion, please feel free to ask me. I'm happy to answer any questions.
- Smithtown, NY · Member since 2014 · 1 post · 0 votes12y
Also looking for info on them. TIA.
- Old Bridge, NJ · Member since 2014 · 22 posts · 2 votes12y
I am in discussion with them and would also appreciate feedback.
Thanks!
b - Emigrant Gap, CA · Member since 2014 · 1 post · 0 votes12y
Does anyone know how the Homeunion process works? Is it suitable for a self directed IRA?
- Investor · North Idaho · Member since 2011 · 332 posts · 107 votes12y
I believe they are established to assist with SDIRA investments already.
- Investor · Chino, CA · Member since 2014 · 76 posts · 30 votes12y
Does anyone know what HomeUnion charges as fees?
THanks.
M
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Account Closed
Hey there does Homeunion own any of these properties in all the markets that are on the website.. OR are you a marketing agent like a Norda or Maverick type company or like some of the other posters on BP that refer business to TK operators.. ?
I think if you could clarify those points that would help the folks asking questions about your company get a better understanding of what Homeunion is or is not.
Pretty good weekend for Bay Area sports first the Giants then the 9ers .... Baseball is having a fun post season..
- Redwood City, CA · Member since 2014 · 83 posts · 19 votes12y
First of all, I want to apologize for falling asleep at the wheel on this discussion. I have to figure out how to set up alerts so I can respond in a timely manner. Thank you, Jay for pulling me in.
I'm going to attempt to answer all the questions that have been asked over the last few months:
Yes, HomeUnion is equipped to work with Self-Directed IRAs. We have a lot of clients who have invested with us via their SDIRAs. Some have had they already set up and some we've helped them create.
As for our fees, we charge an annual asset management fee of $495/property, however, that might be going up to 1% at the end of the year. This fee covers our costs for helping finding and vetting properties, acquiring, managing the rehab (if necessary), connecting with a pre-vetted property manager, making sure that property manager does a great job over time, managing expenses (including taxes) and providing detailed reporting.
HomeUnion does not own any of the properties that are listed on our site. We get properties from a combination of turnkey operators, the MLS, etc. However, not every property we have access to actually makes it to our site, we run quite a bit of analytics and use our local market employees to determine the viability of the property as an investment. If it passes all our checks and balances, we make it available on our site.
Does that answer all your questions?
As for the Bay Area sports...I grew up in the East Bay so am a Raiders and A's fan...in other words, I spent the weekend sulking and acting as if sports don't exist :-)
- Investor · Chino, CA · Member since 2014 · 76 posts · 30 votes12y
Hi @Account Closed
Thanks for the reply. Some follow-up questions:
- Is the 1% fee you refer to 1% of purchase price? 1% of annual rents?
- Does this fee cover the property management fee as well?
- Is there a minimum contract commitment for properties acquired through your service? In other words, if I purchase a home through HomeUnion and decide that I'd like to self-manage (or hire another manager) after a few months, what would occur?
- How many properties are you managing currently?
Thanks.
M
- Redwood City, CA · Member since 2014 · 83 posts · 19 votes12y
Hi Michael,
Let me start by saying to get an exact breakdown of all costs, it's best to chat with one of our solution specialists. I can easily put you in touch with one of them or you can just fill our the contact form on our web site. https://www.homeunion.com/contact/
The Asset Management Fee is 1% of the purchase price.
No, it doesn't cover the property management fees. Those vary from market to market, one of our solution specialists would be able to give you the exact details.
No, there is no minimum contract commitment. You never have to use our ongoing services if you do not want to. In other words, you can purchase through us then self manage immediately. If you do choose to have us manage, we have an annual contract so you can pull out at renewal time, if you so choose.
To tell the truth, I don't know the most recent number of properties we have under management. While we've been in business for almost 4 years, the after purchase management aspect is fairly new (since the start of 2014) and we've been getting our past investors on board, but I'm not sure how many have done so. I believe it's more than 100, but not sure how much more.
Hope that helps.
- 12yChris ClothierBusiness MemberRental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
I have not done business with Homeunion although we met with them multiple times 3-4 years ago and as recently as two years ago. At the time, they were charging a very healthy fee to Turnkey companies in order for the HomeUnion team to do a site visit and consider you as a provider to their platform. I will give them a lot of credit for the thorough process that they made you go through. I also know that they told some companies no, which should be taken as a positive sign.
I liked their team (not sure if they are all still there) and I liked their CEO Don Ganguly who is a client of our company. We were approved at the time, but I think they may have been a little ahead of themselves and working with companies before they had clients. We had a great deal of respect for them, but were not willing to wait for their programs to be completed and moved on, but they have stayed in contact.
@Jay Hinrichs , your questions are spot on. They are just like Maverick, Norada and Real Wealth in that they do not own the properties that they are selling. They are being paid a fee on each deal from the company whose property is sold (that was the previous model that they explained to us 4 years ago). We have never done a deal with a client from there, so I cannot say for sure that is still the case although i cannot see how they could stay in business off of a 1% charge. That charge is unique for a company that is providing third party due diligence. That is what all of these companies are - just a third party giving their opinion and making a fee in the process.
I have reviewed their site and I do think they have a set of robust analytics and I give them an A for at least trying to provide a high level of info. and data on an ongoing basis. As with anything, completely up to the investor to decide if that is worth it, but the owners of this company have a background in data, metrics and systems and that comes from Oracle. They also just completed a round of fundraising from a venture fund and stated that they planned to use that to complete their analytics and systems for investors.
So, If you feel like you need to have someone else do your due diligence on vendors, they would be a good choice. That is a personal preference for each investor and I am quite sure there are plenty of investors out there who want that. Again, my company has not done any deals with them, but we have with their CEO and all of my comments are from what I personally know about their company as well as my familiarity with the other companies as well.
- Redwood City, CA · Member since 2014 · 83 posts · 19 votes12y
Thanks for the input, Chris. You're spot on in what our business model was 4 years ago. Our model and services have changed significantly.
We now provide services throughout the entire lifecycle of the investment, not just the initial due diligence. While we have put a lot of analytics behind our due dilligence, we have also built a team in each of our markets (Our boots on the ground) to make sure that the data is accurate on each particular neighborhood/property.
The majority of the properties we have vetted out no longer come from turn key providers, so we almost never collect a fee from the seller unless of course you count the commission that we get acting as the buyer's real estate agent (we have licensed professionals working as HomeUnion employees in each of our markets).
- Redwood City, CA · Member since 2014 · 83 posts · 19 votes12y
BTW, Chris. I really enjoy your blog posts. Keep up the great writing.
- 12yChris ClothierBusiness MemberRental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
@Account Closed Very good. Thanks for that post as well clarifying how you guys have changed. I knew that you had undergone a lot of adaptation with the influx of investment, just wasn't entirely sure how it changed the model.
Good luck with the new model. I am sure Don and the rest of the team (including yourself) are trying to build a high quality and valuable product.
- Investor · Houston, TX · Member since 2012 · 9 posts · 7 votes12y
@Account Closed
I signed up and looked around your website. Why do your financial estimates not include vacancy or repairs? This omission can artificially pad the cash flow numbers. Or is this included in the asset management fee? There isn't a lot of information available on the site on this topic so I can't really tell. Thanks in advance!
- Redwood City, CA · Member since 2014 · 83 posts · 19 votes12y
Hi Scott,
Thank you for the feedback. We know our interface isn't ideal and we're working on it, so thanks for giving that feedback.
You're absolutely right that both vacancy and repairs can greatly affect cash flow and returns and, I've got to admit, you've caught me off-guard. We had provisions for both last month so I'm a little confused as to where they went.
I'll need to do a little digging to find out why those numbers are no longer there.
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Account Closed
Nice to see someone do it legally... a lot of marketing agents could take a page from your play book and of course when you went out to raise funds I would think any astute investor would want to know that you have a Licensed RE brokerage that you own so you can legally collect commission on properties you do not own and are just middle manning..
And when I first looked at what your company was repping it was some pretty low end stuff in the beginning and I also choose not to put any of my product I had on the time on your site. I am hoping you have upped your quality game to go along with the other nice things you appear to be doing.
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
just take the rent and divide by half that will usually give you a good SAFE number to see how the asset will perform then take your mortgage payment out of that half and that is your net cash flow ... Don't need any fancy analytics for this if you do better great but don't buy anything that does not meet at least this test as many times with older and out of area properties cost to run them are much higher than anyone can proforma its called blue sky.
Unless said asset has 2 years of history IE tax returns and realiable fiancials.. Like when someone buys a already running Multi unit.. the due diligence is in the financials. with rehabbed houses that have no history its a just a shot in the dark its all just best guess's you won't know what you have until you owned it about 3 years then you will know.. But based on my experience for Cash flow properties that are on the Homeunion site.. the 50% will keep you safe and give you a quick look at properties.
- Tampines, Singapore · Member since 2014 · 68 posts · 21 votes12yJay Hinrichs Since you mention about the 50% rule, what sort of COC return should investor look at to determine it is a good deal for Class B property and above? After applying the 50% rule. As an international investor, with lending rate at approximately 8% and 40-50% down, the COC return (Applying 50% rule) is very low. So what makes investing in US real estate attractive for foreign investors aside from the benefit of diversification? Besides, what if we only choose real estate that was constructed after year 2000, would this reduce the overall maintenance charges? Thanks
- 12yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
returns are in the eye of the beholder its what ever makes you happy. I used the 50% rule before I even knew there was a 50% rule. just based on owning hundreds of this class of asset. Now if you buy new or almost new homes you will get
1. better tenant
2. more consistant rent usually if tenant procurement is done correctly
3. much less maintenance over the first 5 to 10 years.
4. since its a nice new home less vacancy factor everything being equal good renters love new or almost new compared to some home that has been a rental for 20 years.
- Springfield, VA · Member since 2013 · 113 posts · 32 votes12y
I just saw this thread but wanted to give my two cents as someone that has actually purchased property through HomeUnion! I bought my first true investment property through them and it was a smooth and easy process. They helped me narrow down what market to look at and eventually a specific property that I was comfortable with. Like @Account Closed and others have said, they don't own the properties, but help investors find investment properties. That used to be just turnkey properties, but now they also list properties off the MLS in different markets. They use analytics to help identify good potential investments and then they have an employee in each market, usually a local real estate agent, that knows specific neighborhoods, etc. They now also provide asset management so the investor doesn't even have to deal with the property manager anymore. This is why they now charge an annual fee. It's definitely a little different from other Turnkey providers I've seen. I think it's a better fit for those investors that want to invest as passively as possible. I've enjoyed working with them so far and will likely continue to work with them to find deals as long as I'm living in areas that aren't great cash flowing areas. I've bought two properties through them now and am looking at another one now.
I hope that helps! I was VERY hesitant to move on the first property because I was overseas with the military at the time and couldn't find much(any) information on HomeUnion online. After talking to a few of their employess I became comfortable enough to move forward and I've been looking for more properties since!
- Redwood City, CA · Member since 2014 · 83 posts · 19 votes11y
Originally posted by @Scott Wessels:
@Account Closed
I signed up and looked around your website. Why do your financial estimates not include vacancy or repairs? This omission can artificially pad the cash flow numbers. Or is this included in the asset management fee? There isn't a lot of information available on the site on this topic so I can't really tell. Thanks in advance!
Hi Scott,
Sorry for the delayed response. We have temporarily removed the vacancy and maintenance provisions as we didn't have very accurate numbers so our investors were complaining about them. We have since gotten better numbers and are in the process building it into our system. We do have a little disclaimer at the bottom of the financials, stating those things will effect, but we should have it be MUCH more prominent and make estimates so that we don't overstate.
Thank you for your feedback. Please keep it coming.
- Redwood City, CA · Member since 2014 · 83 posts · 19 votes11y
Thank you for the kind words and for all the feedback you've given us here at HomeUnion. We're continually looking for ways to improve our processes and feedback from investors like you are extremely important to us. We're already in the process of making improvements to our web site based on your comments.
If you ever need anything, feel free to reach out to me directly.
Scott Hetherington
- Bronx, NY · Member since 2015 · 53 posts · 10 votes10y
Hi everyone,
I just came across HomeUnion on Fasebook. I haven't read all the information about them on their site yet. I will soon. I do have one question at this point. Is this a REIT? I'm sure I'll have many more later. Thanks.
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