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Real Estate Spy

HomeVestors of America Suck? A Review of the “We Buy Ugly Houses” Crew

HomeVestors of America Review

Maybe you have seen

the >>BIG BRIGHT YELLOW sign that says “We Buy Ugly Houses” too.

-I always thought it was brilliant marketing. Indeed it is and has been and….STILL is. So you are here now with me (hanging out) looking for a review on the good ole

We will take that little piece of NOT SO MUCH paradise off your hands and turn that ugly duckling into something that will turn us a pretty profit.  All while we get you out that great big mess you are in.

That’s gonna be your new gig? Well you are thinking about it at least.  So let’s look at the good, bad and UGLY. ;-)

First, let me tell you who I am and why I am writing about this. My name is Paul and I am the Real Estate Spy. Think 007, Daniel Craig and Halle Berry. I get to the bottom of things. Do I have an ulterior motive? Hell to the YEAH….MOST Definitely.

Let me get it out of the way here.

I lost my @$$ in real estate and if I can help a couple of people understand the risks associated with going double deep in the real estate dream, and introduce them to a better way…then my job is done. ;-)  With that said, I still believe that something that gets you closer to your dreams is better than doing nothing. So if you choose real estate, it’s all good in the hood as far as I am concerned (as long as you are clear on the risks).

There you have it. You can read more about my cluster fudge covered problems and losing it all to the real estate gods (the banks in case you were wondering.)

Yep, lost it all. Bankruptcy, foreclosure. All the stuff that isn’t supposed to be what the real estate dream come true, rags to riches, monkeys to millionaires infomercials promise it will be.

Is HomeVestors of America a scam?

I don’t think so, but I did see some complaints on the web (although I take them a bit with a grain of salt). If you are curious, you can look at the Rip Off Report online.

Regardless, AND not for that reason though….I’m >>OUT<<

Why?

Because unless you grew up in  a household where entrepreneurship was a family staple, you are prolly gonna struggle… just like I did. The REI train for me completely derailed. Internet marketing has produced a better return, BUT it took a while for me to go from a W2 employee mindset to a biz owner mindset. There were some things that needed to change.

Here’s the deal. I recognize in you what was going on in me.

>WONDER WHAT IS GOING ON WITH YOU?<

There is most likely a UNIQUENESS about YOU that is screaming out for expression, otherwise, you most likely wouldn’t be on this blog. That uniqueness wants to do something different than what you are doing. There’s gotta be a better way, right?  That’s how I felt.

I believe there is a better way, one that honors who you are and how you were created.  If you want access to what’s next for you,  you are going to have to talk turkey with the part of you that stands in the way. I think it was Laird Hamilton that said,

“Make sure your worst enemy doesn’t live between your own two ears.”

He was right. If you knew how to get the results you want in life, you’d already had them.  If your results aren’t measuring up exactly stay tuned.

I learned that living financially free starts in your mind. It is followed by behavior, which produces actions, which produces results. Getting those things all working together is key.

My proposition and suggestion for you is to take time to figure out where you aren’t in alignment with your goals. Figure out your personality deficits and weaknesses that might potentially hold you back. Get clear on them so you can move them out of the way.

Take a look at the “Recommended Resources” to find out the things that have helped me.

Let’s examine the facts and I will tell you at the end.

HomeVestors of America Franchise Review

With the real estate market displaying a steady rebound from the plunge of the last decade, thousands of individuals are showing renewed interest in exploring the industry for themselves.

Along those same lines, numerous homeowners now have restored hopes of ridding themselves of properties they’ve felt trapped underneath for quite some time. Both these aspects come together to form the foundation on which Dallas, Texas-based company HomeVestors of America was built.

A Company History

Dallas resident Kenneth G. D’Angelo developed a love for music at an early age, becoming proficient on the trumpet. Using this talent and following his love of music, he traveled the country and played with bands of varying genres for some time during his younger years. Upon returning home, D’Angelo began his career in real estate by earning his broker’s license at the age of 21. His empire took off in a big way from that point.

D’Angelo established his own company known as Boyce-D’Angelo and further led the franchising movement in the Dallas area upon buying into the Red Carpet real estate corporation.

Within only a couple of years, he showcased his gifts in this industry by becoming one of the most successful brokers to work with this company. After propelling this franchise to success, he also founded the Hughes-D’Angelo agency, soon to become the most profitable business of its kind in the area.

Once this leg of D’Angelo’s journey reached its height of success, he bought into an ERA Real Estate franchise. This venture saw unparalleled triumph as well, outranking others with the company in both franchise and property sales. By 1980, D’Angelo was ready to make further headlines in the real estate world.

Prompted and inspired by his earlier efforts, D’Angelo then created HomeVestors of America, Inc. Since its launch with a single office back in the 1980’s, the company has grown to include in excess of 600 independently owned franchises across the continental United States. After using his knowledge and experience to assist others in realizing their real estate investment dreams, D’Angelo passed away on January 8, 2005.

The HomeVestors of America company is now headed by co-presidents Ken Channell and David Hicks.

The Scoop on the “We Buy Ugly Houses” Franchise

What HomeVestors is all about

The HomeVestors company mantra states, “We buy ugly houses”, and this is a primary ideal on which the business is based.

They purchase homes from current owners who are physically or financially unable to make much-needed repairs. If this sounds quite a bit like the beginnings of home flipping adventures, that comes with good reason.

After purchasing dilapidated or outdated properties, the company makes necessary changes and sells them to aspiring homeowners.

Of course, this is only one element of their business model. In addition to homes in need of various levels of maintenance and refurbishing, the company also caters to those who have other reasons for needing to move home.

These include:

  • General financial difficulties
  • Overwhelming mortgage terms
  • Imminent foreclosures
  • Retirement or job loss
  • Personal and work-related transfers

Those are only a few of the situations in which HomeVestors takes properties off people’s hands. Their creed notes they help resolve ugly homes as well as ugly circumstances with fair, timely offers and closures.

Franchise staff members generate cash offers with no obligation for potential clients to accept.

A Different Approach to the Real Estate Market

Numerous courses exist to help those interested in real estate investing learn the ins and outs of house flipping. HomeVestors is not one of those tutorials. Instead, the company offers franchise opportunities to individuals hoping to get started in the industry.

Having at least some education or life experience regarding the subject is recommended before purchasing a franchise; however, the company notes plenty of their established affiliates are ready and willing to lend advice to newcomers. The company also addresses many common questions and concerns novices may have.

Homevestors Franchise Fee

According to my research, the company has 2 programs.

Option A: $50,000 upfront and then $3,000/month for lead generation.

$3,000/month for lead generation.   That is the business I have now. You see….people pay me to do all of the web stuff so that customers find them online and call ’em. That’s what a techy buddy of mine taught me.  Why does it work? ’cause the internet is not going away and neither are small businesses.

Option B: $10,000 upfront for a part-time franchise. The lead gen was unclear for me, but I am sure there is a component in there…built in.

You must also have $50,000 in reserves. Sounds like POF…not plenty of fish (I laugh every time I see that). It’s proof of funds, yo. You prob already knew that though.

HomeVestors Information and Claims

Answering the Funding Conundrum for Real Estate Investing
Getting started in the industry can be exceedingly difficult for first-time investors. Securing funding for purchases hovers at the top of investors’ lists of hurdles.

While HomeVestors does not promise funding for their franchisees, they do offer advice on finding the best lenders available. The company also explains what type of capital investors should have in reserve before going into a venture.

Mentors already on board with the company have typically built solid business relationships with an array of lending institutions. They are also well aware of the ones to be avoided, meaning those who charge higher than normal interest rates or who snub new borrowers.

As such, they are often able to help newbies find local lenders and begin working their way toward their individual goals.

In addition to the upfront costs and expenses of moving forward on a flipping project, investors are typically concerned with finding acceptable deals on a listed property. The HomeVestors team caters to their franchise owners by providing lists of local market prices for comparison.

Additional advice is also provided on finding properties and developing insight into the evaluation process along with numerous other aspects.

Riding the Coattails of Fame

Another commonly faced obstacle in this industry is establishing a client base. Few people are willing to work with someone they’ve never heard of and have no reason to trust. Becoming a franchise owner with a nationwide company could be the biggest step a new investor takes in creating a name for himself.  At least this is what the company claims. But heck, pretty much all the gurus like Andrew Cordle recommend getting your name out there and making connections.

Today’s Status of Homevestors America Inc.

How Did HomeVestors Reach their Current Status?

Every successful business is different, but they all tend to have two basic principles in common: a satisfactory track record of customer satisfaction and recognition among the masses. Kenneth D’Angelo built this company, like all his others, using his personal knowledge of the real estate market and holding fast to promises made to clients.

This established a high level of trust among the community and led to the all-powerful positive word-of-mouth advertising every company needs to grow and evolve.

The company has received considerable recognition for its accomplishments, such as:

  • Making Raleigh, North Carolina-based magazine Opportunity World’s list of 125 Hottest Franchises
  • Being dubbed among franchisehelp.com’s Best Real Estate Franchises in 2013
  • Landing on the Entrepreneur Magazine “Franchise 500” list six years in a row and its “Fastest Growing Franchises” compilation for four consecutive years.
  • Appearing on the SMU Cox School of Business’s “Dallas 100” list as one of the fastest growing companies for four years sequentially
  • Winning eight consecutive “Top 50 Franchise Satisfaction Awards” from independent national market research firm, FranchiseBusiness Review as well as their top honor in this category this year

Sounds like we are starting to talk about guys like Steve Jobs now.

As far as the second aspect, HomeVestors could be considered an epitome of recollection. Their advertising includes highly memorable bright yellow signs depicting a caveman as well as their “We Buy Ugly Houses” slogan.

Most would be hard-pressed to find even a handful of people in their areas who haven’t seen, at least in passing, the company’s signage.

They also happen to have a matching fleet of vehicles expressing their logo and advertising sentiments. Standing out in the minds of consumers like this is essential to success.

Marketing Masters

Effective marketing strategies are crucial to any business regardless of size, sector or seniority.

Individual investors are forced to either hire their own advertising team or handle marketing efforts on their own.

Either way, this element takes considerable amounts of time, research and funding. HomeVestors employs an entire team dedicated solely to that aspect of their company; by extension, the millions they admittedly spend on marketing filters down to their franchise owners.

But obviously, the franchise owners are paying for this monthly.

A Lesson in Reputation Management

To paraphrase the familiar saying, “You can’t please everyone all the time”. All businesses are up against those few clients who are going to be dissatisfied no matter how hard the company tries to reverse a situation.

At the same time, HomeVestors is a network of franchises. Though their Dallas headquarters makes every effort to keep franchise owners in check, a few are bound to grow lax or become greedy and ultimately take advantage of a client’s struggles.

The company strives to ensure those in its flock abide by the high standards on which the company was originally founded. Those who prefer not to be team players and abide by the rules are promptly disciplined, and home base takes over the process.

Kinda gives me the willies…YIKES.  But maybe they are just talking about the really bad apples.

Though negative scenarios can’t be avoided 100 percent of the time, a timely and courteous resolution to the situation is key.

Having ridden this particular roller coaster a few times over the years, HomeVestors offer to assist franchise owners in this department as well.

What does all this Mean for Franchise Owners?

In short, (only if you are dead set on the idea) novices to the world of real estate investing can certainly benefit from the experience of industry veterans.

HomeVestors was founded on stringent principles of client satisfaction, and those who are part of the company are well equipped to pass this along to each new generation.

Since the company has already created a name for itself, franchise owners are able to use its extensive marketing efforts in their favor. Though funding and direct training are not provided via HomeVestors, current franchise owners are available for mentoring for those newcomers who’d like some friendly professional advice.

My Cold-Hearted Conclusion

Unless you have your heart set on this concept, I’d be tempted to steer clear.

-The reason why is simple. Although they give you the necessary tools to start and point you in the right direction you still have to go do all of the work.

As far as I’m concerned you were just going to start out $50,000 poorer than you would have had you started it on your own.

There is enough information online that is available for free through places like bigger pockets to get you started without having to start that far in the hole.

Plus, spending $3000 a month on lead generation is pretty pricey right out of the gate. No doubt that it’s important, But why not be the guy that knows how to do the lead generation and you were the one that charges the customers $3000 dollars a month. If you have 10 customers well you do the math.

That’s exactly what I do. See how I started this blog in the first place. And that’s a big fat >AND< I don’t have the risk of a flip gone wrong or funding not coming through the way I expected.

I don’t have renters that suddenly leave my house tore apart in need of a lot of rehab.

For me the upside to running your own business online like the rest of the gurus is just too good to pass up. Incidentally, that is why the gurus aren’t passing it up.

As always I wish you the best in your decisions! Good luck out there.

Yours Sincerely,

Paul (Real Estate Spy)

About the author: I give real estate investors a quick connect to what they really want and often introduce them to new material that gives them insight into what keeps them from getting the results they hoped for when they got started.