Even though the real estate bubble burst for many investors in the recession of 2008-2009, this field is still one of the most lucrative that there is for those looking for investment diversity. There are literally so many opportunities for people to invest in a home that can’t sell and fix it up for an immense profit that many homes just sit vacant because there are too many opportunities! If you become a HomeVestors franchisee, you’ll get to work with investors who are looking to purchase excess properties that you’ve fixed up and are ready to go.
There’s a number of reasons why real estate is lucrative. Some investors are looking to build an extensive series of rental homes to generate profits. Some HomeVestors franchisees flip homes on their own and eliminate the investor all together! What you’ll get as a franchisee is the help you need to find the perfect property to fix-up. From a full remodel to a simple flooring replacement, your job is to help investors meet the next best property that they will want!
How Much Does It Cost To Become a HomeVestors Franchisee?
There are two types of franchises that are available in the HomeVestors business model. You can choose to either purchase a full franchise or you can choose to become an associate franchisee.
Full Franchise: If you wish to work full-time in your own business, then this is the franchise opportunity for you. The franchise fee is $50,000, but in return you receive ongoing lower franchise fees. You’ll have an actual office location and have a staff working with you typically in this model. This is especially for those who wish to have the complete real estate business experience.
Associate Franchise: For a franchise fee of $15,000, you’ll receive the same rights as a full franchise operator, but have the ability to work part-time, often from your home. This is often the course people take if they can’t afford the full franchise fee or want to test the waters of their market with the HomeVestors model. You still get marketing territory rights and will still work with development agent mentors.
Part of the HomeVestors experience is the direct selling program that puts franchisees in touch with other real estate investors so that specific homes in targeted neighborhoods and communities can be purchased for a cash discount, and then rehabbed and resold or renovated into a rental home.
There are also marketing fees that must be paid each month in both franchise models and you’ll be responsible for paying a fee each month that you do not purchase a home. These fees are lower in the full franchise, but they are still there. Other responsibilities may be involved with your specific community and business setup as well.
Does HomeVestors Work? Is It Legal To Do?
There’s a lot of hesitancy with this type of franchising model because of the economic events of 2008-2009. No one wants to be stuck with a property that will go underwater, nor do they want their life savings sunk into a home that needs to be rehabbed more extensively than previously thought. First off, the HomeVestors model is completely legal and works off of the short sale principle. When a home cannot meet market prices, but the homeowner needs to sell it, they’ll get permission from their mortgage holder to sell it for less than the total amount that is due.
What you’ll do as a HomeVestors franchisee is offer them a price based on the value of the property as determined by the proprietary software that is offered by the organization. By walking through the home and looking at the work that needs to be done on the “ugly” house, you’ll be able to determine what investment to make… or if you should even make the investment at all. You would then make the offer, the homeowner would need to clear the short sale offer through their mortgage company, and if approved you would then become the new owner and begin the rehabbing process.
Don’t have enough money to begin purchasing your own real estate? That’s ok too! When working with HomeVestors, you’re also working with real estate investors who will back your investment for you. They’ll pay for the property and you’ll work on the rehabbing of it so that it can be turned into a rental home or resold for a higher profit. Then the investors will make money from the sale and you’ll get a pre-determined percentage based on the work that was completed in the home or you’ll be paid directly if it becomes part of a rental portfolio.
You then just keep repeating the process with home after home, restoring each one to their previous glory so that they can bring in a maximum level of return for you. If there are closing costs involved, HomeVestors even helps take care of these so that a homeowner can walk away from what they perceive to be a bad investment and you can begin on a good investment.
Is There Any Training or Support Offered?
There’s a two week training course offered by HomeVestors when you sign your franchise agreement that will help take you through the real estate process and how to use their proprietary software. You’ll also receive extensive assistance with branding materials so that you can develop powerful leads, get new prospects on your line, and have other mailings and posterboards that will give you local recognition with a brand name.
Is it the right investment for you to make? That depends on how much work you’re looking to get. If you just want one home at a time, then you could take that $50k and build it up on your own. If you’re looking to build an extensive real estate portfolio, however, then HomeVestors could be right for you. Take a look at it for yourself today!