Opinions on franchises

Memphis, Tennessee
Starting Out
3yFollow

Opinions on franchises

Shane Smith
Member since 2018 · 2 posts · 1 vote

Hello All,

I am new to the REI world and have applied to be a franchisee for a house flipping company. The costs are not trivial, but they are less than you would pay for a nice used truck.

One of the main reasons I am considering this route is the leads that are provided. Without going into great detail, you are provided 50 motivated leads per month for 1/5th of the cost I have found from “retail” lead companies. 

Another reason is I would like to hit the ground running. This franchise provides training and a CRM to get you generating revenue. The royalties are graduated, and the more deals you do, the more royalties fall. I don’t mind paying those fees if I can build a solid, long lasting business quickly.

I know I can piece together all these things by attending my local REI meetings and making connections there. My concern is the time it would take to grow these connections since I ain't getting any younger! I would love to hear from current franchise owners, be it HomeVestors, Red Barn, New Again Homes, Flip Cheap Homes, or any other flipping/wholesaling franchises out there. Thanks in advance!

Shane




1Reply
155 views

Most Popular Reply

Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
1y

It would be wise to post the name of the franchise you are considering. Others may have personal experience to share. You can also search BiggerPockets and Google for reviews from actual members. Trusting what the franchise tells you is foolish.

I can tell you this: there are companies selling leads to real estate agents all the time. It always sounds attractive. $300 a month for leads? If I sell one house per year, it will pay for itself. How can I lose???

The truth is, people are suckered by this all the time. You lose because there are many other suckers out there falling for the same line and sharing the same low-quality leads that don't translate into sales.

Do the math. There were 16,000 homes sold in Memphis in 2024. If this company gives you 50 solid leads per month, that's 600 properties suitable for a flip that aren't already listed with an agent. Does that sound right?

And do you think you're the only game in town? If this franchise has half a brain, they are going to sell the same package to at least ten other people in Memphis. That means they are (a) sharing the same 50 leads per month with all ten members, or (b) generating 6,000 unique flip leads per year. Neither of those pencil out.

I think you'd be wise to save the money and find your own leads.

The DIY Landlord Book4.7247 Reviews
WebsiteView Page
1Reply
See this reply in the discussion

9 Replies

Jump to latestLatest
  • Chris Davidson
    Real Estate Agent · Boise, ID · Member since 2016 · 1k+ posts · 888 votes
    3y

    @Shane Smith Not familiar with flipping franchises, but if you are needing marketing and lead gen this could be helpful. However if you need help with rehabs and contractors it doesn't sound like this would help you one bit. Usually most franchise models in other business environments have the whole package. From what you mentioned so far I don't see what they are doing other than giving you leads and CRM. That can be a tough part, but isn't close to half of the process. I'd ask for referrals, and reach out to some local folks and see what is working and not.

    Best of luck!

    0Reply
  • Shane Smith
    OP
    Member since 2018 · 2 posts · 1 vote
    3y

    Thanks for the response Chris! I forgot to mention they also provide coaching through your first 20 deals. I have joined a local REI group. They are a great bunch and have gave us solid advice. They have presented a couple of deals that, unfortunately, haven't worked out. We are going to keep plugging away though and appreciate the input!

    0Reply
  • Avani Patel
    Member since 2024 · 8 posts · 3 votes
    2y

    @Shane Smith  Hi, IM looking at a home flipping franchise too.  The biggest reason is to learn without using my own capital.  Has anyone done this?

    0Reply
  • Samantha Monjure
    Member since 2023 · 9 posts · 2 votes
    1y

    I just came across New Again Houses franchising for home flipping and am interested because I'd also like to begin flipping homes without using my own capital. Since franchising takes some investment, I'm wondering if it's worth the investment or if doing a flip on my own to get experience is better.

    0Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    1y

    The only reason to look into franchises that flip houses or do renovations pre-sale is because you have existing business that you could leverage on top of this to add more clientele. Like it would be great for a real estate agent who also flips. What you are looking for is leads, but you don't know what you are doing so the training and coaching sounds good. Franchises work for a reason, but inexperienced operators are why they fail. If you don't know anything about real estate renovation, they can't teach you in a week in Indiana. Spend a year learning and going to meetups before you fork over a $50-$100k franchise fee and half of your profits and don't even know what you are doing.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    0Reply
  • Guy Gimenez
    Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes
    1y

    My investor friends who joined an investing franchise were severely disappointed. It was nothing like they were told it would be. Do yourself a favor. Start building relationships with retirees who want a better return on their money. Provide them proof of your ability to find, fix, flip (or whatever strategy you plan to use), and then start with small amounts of their money. As they see their money is safe and you're succeeding with your plans, they'll usually ask to increase the amount of money they loan to you. This happened with almost every one of my PML's. 

    0Reply
  • Samantha Monjure
    Member since 2023 · 9 posts · 2 votes
    1y

    Thanks for the replies! I would agree, I'd want to try and grow my experience and clientele before starting the franchise if I could. However, I thought the franchise might offer the guidance I needed. 
    Thanks again!

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    1y

    It would be wise to post the name of the franchise you are considering. Others may have personal experience to share. You can also search BiggerPockets and Google for reviews from actual members. Trusting what the franchise tells you is foolish.

    I can tell you this: there are companies selling leads to real estate agents all the time. It always sounds attractive. $300 a month for leads? If I sell one house per year, it will pay for itself. How can I lose???

    The truth is, people are suckered by this all the time. You lose because there are many other suckers out there falling for the same line and sharing the same low-quality leads that don't translate into sales.

    Do the math. There were 16,000 homes sold in Memphis in 2024. If this company gives you 50 solid leads per month, that's 600 properties suitable for a flip that aren't already listed with an agent. Does that sound right?

    And do you think you're the only game in town? If this franchise has half a brain, they are going to sell the same package to at least ten other people in Memphis. That means they are (a) sharing the same 50 leads per month with all ten members, or (b) generating 6,000 unique flip leads per year. Neither of those pencil out.

    I think you'd be wise to save the money and find your own leads.

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free