By David Hicks
RISMEDIA, November 5, 2010—As co-president of Dallas-based HomeVestors of America, Inc., one of the leading buyers of houses in the U.S., David Hicks is often asked for advice based on the company’s 15-year track record helping investors buy and sell “ugly houses.” With just under 200 franchises in 33 states, HomeVestors trains and supports its independently owned and operated franchisees who specialize in buying houses at a discount and rehabbing single-family residential properties.
Hicks offers the following advice to prospective investors about the opportunities that abound in today’s single-family home market.
1. Ugly means many things. Many times “ugly” signifies a house with serious repairs needed simply due to time and age. Other times, it means a house that may have been very lovely in its day, but by current standards, it needs an update. And then there are personal situations such as houses that need to be sold quickly due to divorce or death.
2. There’s always a market for buying ugly houses. No matter where we are in the national or local real estate cycle, there’s always an ample supply of ugly houses to buy. That’s because houses naturally age, consumer tastes and interior designs constantly change, and ugly situations (such as death and divorce) are, unfortunately, inevitable.
3. There’s always a market for selling ugly houses that have been rehabbed and are now lovely homes. There are always first-time home buyers looking to buy entry-level homes, especially in 100% move-in condition. And, for investors, whether the homes are held as investment properties and rented, or resold, rehabbed homes can generate cash flow and, potentially, a steady income to help build wealth over time.
4. The best buys are not always obvious. Anyone can send a direct-mail piece to a foreclosure list. But houses that have been in one family for 30 or 40 years, or have recently been inherited and need repairs or updating, aren’t going to show up on a foreclosure list. Brand advertising and a national reputation are the best ways to generate quality leads for buying these types of investment properties. In other words, sellers often seek out franchisees from the company with the hard-earned national reputation in response to its marketing.
5. In a market full of fly-by-nighters, having a track record as an ethical buyer and seller makes all the difference in turning leads into customers. Everyone from the elderly couple to the family being transferred to another area wants to deal with a professional home buyer they can trust, who will perform as promised and treat them with respect. By maintaining standards of ethical practice, we help ensure that our customers are satisfied and that we receive continual referrals.
6. Next to branding, word-of-mouth marketing is the best messenger for generating leads. When you treat people with respect, and always do what you say you will do, people want to tell others about you.
7. Communities love it (and love you) when you rehab an ugly house. Everyone wins when the ugly-duckling house on the block becomes a swan—it adds value as well as beauty to the whole neighborhood.
8. There is always a learning curve for new investors. Barriers to entering the buying market are low, but the best investor success comes with a training program, continuing education and daily support from an experienced coach, so you don’t make the common mistakes beginning investors often make.
9. People join HomeVestors as franchisees for a variety of reasons. Some have goals to develop an investor portfolio of 10 or 20 houses. Others want to test the HomeVestors system part-time before growing their businesses into full-time careers. Some want to develop a full-service real estate investment business. But everyone wants to build wealth. Buying and selling houses can be a path to wealth building.
10. Success begets success. Since HomeVestors’ began franchising in 1996, the company has bought more than 45,000 houses, making it the #1 buyer of houses in the U.S. with the most recognized real estate investing brand in the country, “We Buy Ugly Houses®.”
David Hicks is co-president of HomeVestors of America, Inc.
For more information, visit www.HomeVestors.com.
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