Are Wholesaling Franchises a Scam?

Question

I’ve just learned about the existence of wholesaler franchises, such as HomeVestors (the Yellow “We Buy Ugly Houses” guys). The numbers presented to me seem too good to be true, especially when using an already trained buyers agent. Any feedback or personal experience owning or representing one of these types of franchises? Any feedback on buying homes FROM them?

Thanks very much

Greg Dickerson · Answer

It’s legit but may or may not be worth it to you depending on your market and your experience. They have  hefty marketing fees and do not offer protected territories. They also tried to stop people from using We Buy Houses claiming trademark violations. They lost that battle in court.

Jeffrey Hotz · Answer

Im a franchisee in Columbus OH and we aren't just wholesalers, although that is one of the exit strategies. Like anything it isn't for everyone, but for someone coming from no real estate background to 8 years later with a solid rental portfolio and experience in all exit strategies; I assure you its no scam.

Tylor Williamson · Answer

I own a HomeVestors franchise and have been extremely pleased.  I will agree with others and suggest that nobody should extrapolate individual data points onto an entire franchise system.

There are over 1,000 franchises in the US. Collectively, they buy (and then sell) thousands and thousands and thousands of homes every year. So of course there will be a periodic bad apple. To see that there are only 13 BBB complaints over the last 3 years seems incredible to me, especially considering the industry we are in if trying to buy homes at a dramatic discount. I am confident there are many smaller, local investors who have many more complaints than this

Operating in so many markets, results for individual franchise owners certainly vary dramatically. For me, in Salt Lake City, the cost per lead feels a bit high due to fewer leads than I would prefer. But the quality of the leads I do get are incredible. So I have still been happy.

Each franchise is open to dispose of properties however they prefer (assign the contracts to other investors, fix-and-flips the homes, or hold onto them as long term rentals). So you will see different owners each operate differently. Though, it seems like the majority of the deals are assigned to other investors.

Hope this helps. Feel free to reach out through direct messaging with any other questions.

Jerryll Noorden · Answer

A scam is not simply defined as legit or not.

Again, I can sell you a wall-mart pen, you know these "Parker" pens for $89,094/pen.

I assure you the pen is legit, it writes, and I will hand that pen over to you when you pay me that money.

BUT no offense..

Do you know HOW MUCH they pay for leads?! It is flat out RIDICULOUS. All I hear about homevestors ...ugly houses is how their OWN members bish at them, trapped in a contract, can not get out, and their clients  find them horrible.

Do a search for their reviews:

https://www.bbb.org/us/tx/dallas/profile/real-estate-investing/homevestors-of-america-inc-0875-19000708/customer-reviewsAnd their complaints

https://www.bbb.org/us/tx/dallas/profile/real-estate-investing/homevestors-of-america-inc-0875-19000708/complaints

Remington Lyman · Answer

@Chris Meadors It does not seem like a scam. I see @Jeffrey Hotz and @Mitch Deminski do great things in my market of Columbus, Ohio.

Are Wholesaling Franchises a Scam?

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