Real Estate Investor · Rantoul, IL · Member since 2013 · 40 posts · 9 votes
12y
A little more information would be helpful in answering. Give us a bit more to go on?
How much will this cost?
Whats the activity in the area?
What type of support/backing are they providing? (This would be CRUICIAL in ANY transaction of this nature)
What would be the benefits/fallbacks of this arraignment?
I tend not to trust public opinion to the upmost degree. Any business is going to have good and bad reviews depending on their experience. Its like anywhere. You will have people that sing their praises, and you will have people who swear you are getting in bed with the Devil himself. What the real question you should be asking is how is this going to benefit YOU in the long run.
Real Estate Investor · Rantoul, IL · Member since 2013 · 40 posts · 9 votes
12y
Agreed Will!! Thanks to the BP Members and the wealth of knowledge and resources available here, I havent needed anything additional. So whats the benefit?
What do you need from HomeVestors that you don't think you can accomplish yourself?
Leads and franchise fees
If someone is desperate to pay franchise fees, they don't have to join HomeVestors -- they can just send me the money directly, no strings attached! :-)
As for leads, I'm guessing that the bulk of the leads a HomeVestors franchisee gets is from the marketing he does himself. Why couldn't he do that same marketing himself without having to pay someone else a fee. I understand there is some value to the brand, but having known a couple HomeVestors franchisees in the past, I'm not very convinced that the brand is worth the cost.
Landlord · Dallas, TX · Member since 2012 · 505 posts · 34 votes
12y
@J Scott I would love to hear about your colleagues experiences with a franchise. I am sure others on the forum would benefit as well should you be willing to share it.
I would tend to agree with the others that I don't know what you might get from a HomeVestors franchise that you can't do on your own other than being able to use the brand (Which should have some value).
Are there some really good training and support systems? Marketing done for you (Not just example pieces you have to actually send out)? Some other valuable benefits?
I also have no idea what the cost is but I can't imagine it isn't pretty significant in relation to the what you get unless there are some of the things I was saying above.
@J Scott I would love to hear about your colleagues experiences with a franchise. I am sure others on the forum would benefit as well should you be willing to share it.
This is more my experiences seeing them running their HomeVestors franchise. Most of it was back in 2008-2011, while the market was pretty rough -- they were getting very little support from corporate and the bulk of their leads were coming from other investors (guys like me). One of the guys went out on his own in 2010 and the other stuck it out...as far as I know, he still owns his franchise outside of Atlanta.
That said, I wasn't familiar with the intimate details of the business, and I haven't had much interaction with the guy who still owns his since 2011...so I don't know if the improved market has changed things for him or not.
Flippner/Rehabber · Dallas, TX · Member since 2010 · 27 posts · 36 votes
12y
I am a HomeVestors franchisee, started with zero experience a little over 5 years ago, and have purchased over 250 houses since then. I now mentor and coach most franchisees to some extent, and have brought about 20% of the current franchisees into the system.
It's widely known and proven that franchise business have a dramatically higher success rate, and stay in business longer than non franchise businesses. HomeVestors is the McDonald's of the real estate investing industry. You can start a burger restaurant on your own as well, but you won't be able to compete with McDonald's. Like all franchises, you get access to things that you quite simply could likely never re-create on your own: Brand (that is second to none), best in class training and support, leads, etc.
Can you make it on your own? Sure...but this is not an easy business to be successful in. Most that are successful have created a job for themselves, vs. a business. We now have 400 franchisees, and growing very rapidly. There is incredible collaboration across the franchise system that can not be matched.
I'm biased...but in all honesty, to those that have joined...there is very little regret.
Landlord · Dallas, TX · Member since 2012 · 505 posts · 34 votes
12y
@Mike Hambright I am really confused. I was on Tim Herriages free webinar just the other day and he said himself he does about 70 houses a year. How are you doing more than Tim when he is the premier homevestors franchisee in the area.
Flippner/Rehabber · Dallas, TX · Member since 2010 · 27 posts · 36 votes
12y
Samantha - Tim and I are great friends. In fact, there are nearly 30 franchisees in DFW alone, and in DFW...we'll likely buy 500-600 houses this year. We'll buy more than 4000 nationally this year. Plenty of love to spread around! Again, we've purchased over 55,000 houses, have been in business 17 years, and are the only franchise system in our industry.
Flippner/Rehabber · Dallas, TX · Member since 2010 · 27 posts · 36 votes
12y
HomeVestors also provides financing, and many more things. To be clear, there are many franchisees buying 50-100+ houses a year in our system. All could leave the system, avoid fees, and do this on their own. Everyone that's in the system sees the value, and understands that the costs associated with the franchise are outweighed by the benefits. 55,000 houses is not a fluke...
Dayton, OH · Member since 2013 · 15 posts · 1 vote
12y
Samantha, Mike and Tim,
Sounds like you are all successful HomeVestor franchisees. Any advice on the most important aspect that makes some franchisees succeed and others fail. What should I avoid and what should I follow?
Maastricht, The Netherlands · Member since 2013 · 131 posts · 18 votes
12y
Lol! Corporate ganging up, fun stuff ^^ I also believe in franchises (even MLM is not on my ethical blacklist), but if you have the spunk to do it yourself, then all the better. Of course, we don't have this Homevestors thing here in Europe, but we do have McDonalds, as well as mom & pop fastfood restaurants. Some of which became franchises later on. Nuff said. Looking at the business model, I feel like starting a European version of this.
You also hear The E-Myth book mentioned on BiggerPockets podcasts, nothing surprising to this approach. So perhaps one of these gentlemen should be taken on as a guest to explain more about the model?
Mike & Tim, should Homevestors decide to expand to Europe, give me a call.
Lender · Dallas, TX · Member since 2010 · 41 posts · 10 votes
12y
Bill, I do not think Samantha is a franchisee. What we have seen in the franchise system, over my 11 years, has been inconclusive.
Some personality types do better than others with regards to volume, but then not as well as others with regards to managing the business. I would say all in all, HomeVestors is best for someone that wants to run a real estate investing business. It is not a hobby, and it can be very cash intensive. The secret sauce, is really just lead generation.
The brand is strong, and the national network (380 offices) begins to feed itself. I prefer to spend my time growing my business, not wondering where the leads will come from. In Dallas, we have franchisees that spend zero dollars per month all the way up to 20,000 per month.
It is specifically contingent on their goals as a business owner, investor, and their cash flow situation. Much like any business.
Dayton, OH · Member since 2013 · 15 posts · 1 vote
12y
After reading the forums on BiggerPockets and reading the BiggerPockets Ultimate Beginner's Guide to Real Estate Investing I realized that it would be crazy to buy in to something that expensive, especially when it is not needed. That's $50,000 that will go towards marketing my business and not in someone esle's pocket. Imagine, if done wisely, how many transactions $50k of marketing will get me. For anyone else asking this same question I would suggest reading the guide listed abaove and almost as important, read the book E-Myth Revisited by Michael Gerber. Thanks for all the advice. I have not yet started but am getting my business plan together and am building my team. Hope to start very soon.
Maastricht, The Netherlands · Member since 2013 · 131 posts · 18 votes
12y
William, I'm not a Homevestor franchisee, so take that into account however you like.
But even though I appreciate and encourage any DIY-starter, Homevestors is a Franchise (with a capital F) for a reason. Read The E-Myth Revisited, it's even recommended by the BP podcast so they shouldn't have any qualms with the Homevestors business model, even if their own style is more independent most of the time.
It's not a bad model, unless you're someone who restricts himself to the mom-and-pop grocery store as opposed to Wallmart by principle?
But even though I appreciate and encourage any DIY-starter, Homevestors is a Franchise (with a capital F) for a reason. Read The E-Myth Revisited, it's even recommended by the BP podcast so they shouldn't have any qualms with the Homevestors business model, even if their own style is more independent most of the time.
I don't think anyone has any issues with the Homevestors business model...they license a brand and a set of rules to structure the business for others who want to leverage the brand and who want a shortcut to getting started. It is a tried and true model in the business world, and I doubt anyone would dispute that it can work.
The takeaway most of us have is that it's not something that is necessary for being successful in the real estate business, which I would argue is different than the typical retail/food franchise model. For someone who has the ability to understand investing models and principals, it's easy enough to create your own brand and business model; for someone who doesn't have the ability to understand the business, buying into someone else's brand and model likely won't help.
If you want to start a food business, I think franchises are great. If you want to start a real estate investment company, I think franchises are less than optimal. Just my opinion, of course...
Btw, if you want to make a LOT of money with a franchise...start the franchise and and be the franchisor...not the franchisee...
Flippner/Rehabber · Dallas, TX · Member since 2010 · 27 posts · 36 votes
12y
Can you be a successful real estate investor without the homevestors system? Of course. But, this is a very difficult business to run, if you expect consistent results. Given that we are governed by the Federal Trade Commission, there is an extensive process to go through to become a franchisee. We don't allow just anyone in, and there is a 30+ day that in process by both sides. During that process, prospective franchisees are given a list and contact information for hundreds of other franchisees in our system so that they may do their own research. Prospects also are given a list and contact information for franchisees that have left our system. There is no other real estate investing system in existence that is more transparent than ours.
For the record, our franchise costs $15,000, not $50,000.
We have research that shows that 97% of real estate investors that try to 'go it alone' fail. HomeVestors has an approximately 5% fail rate. Additionally....there will be no way to prove this...but generally speaking...HomeVestors franchisees tend to buy houses at much deeper prices than independent investors. So....a 'house' is not a 'house'.
We're not for everyone. If we were, we'd had purchased a LOT more than 55,000 houses. All investors getting started need to keep in mind a few major myths whether they're starting independently, or as part of an organized system:
1. This is NOT an easy business. It's a hustle business. You can't run a successful business from the beach and collect mailbox money. That is, not for extended periods, not for many years, and not consistent, real money.
2. You MUST advertise or market your service. Most training conveniently leaves this out...or talks about methods that are illegal in most areas (bandit signs). focuses on REO's or short sales...which is not sustainable, etc.
3. In your market, all other investors will secretly hate you (or maybe not a secret), and be out to murder you. Everyone is your competitor (HomeVestors is not like this - we have a team based approach).
I could go on and on....
No need to do much to sell the system on this board. It tends to sell itself to people that see the value of a business in a box with a company that is far and away the leader in this industry. For those that aren't interested in our system....no biggie. It's hard to downplay the 800# gorilla though.