"We Buy Ugly Houses": A Plus for Community Development? If You Drive Down a Busy Street in an Urban Community, You May See a Brightly Painted Yellow and Red Billboard That Says, "We Buy Ugly Houses."
Milner, Michael, Partners in Community and Economic Development
If you are like most people, you'll probably wonder what it's about. Your curiosity means that the marketing campaign has achieved its initial purpose: to create a message that people both notice and remember.
The company behind the slogan is HomeVestors, which licenses real estate investment franchises. Franchise investors (franchisees) receive training and support to buy, rehabilitate and sell or rent properties on a quick turnaround. With each sale, the franchisee pays a commission to HomeVestors.
How HomeVestors works
HomeVestors' robust marketing methods target residential property owners who need to sell their homes quickly and without a lot of red tape. Reasons might include financial stress with mortgage payments, property taxes or homeowners insurance. Other triggers include divorce, job transfer, retirement or disability. Sometimes heirs seek quick cash for inherited property in "as-is" condition.
A franchisee's goal is to purchase residential property at no more than 60 to 65 percent of its potential value and do one of three things: rehabilitate and sell, act as a wholesaler to another investor, or rehabilitate and rent the property.
Founded in the mid-1990s, HomeVestors now has over 240 franchises in 30 states. Many investors come from corporate America or have entrepreneurial backgrounds.
A franchise typically costs about $50,000 with a monthly fee of $500. Franchisees also pay a commission of $1,000 per property acquired. The franchisee goes through an initial training program and receives ongoing coaching and instruction. Properties come either from direct solicitation or through referrals from the national call center and website.
The problem of dilapidated housing
HomeVestors' campaign reaches far and wide, even to the small town of Prichard, Alabama, just north of Mobile. Prichard has a highly successful homeownership program for lower-income families and has received national recognition for its housing authority's efforts to convert Section 8 renters into homeowners. The authority has been able to build several new subdivisions as well as establish a HOPE VI housing development. But despite the successes, the city continues to be plagued with dilapidated housing units and high crime.
Recently, the Mobile Press-Register reported that the City of Prichard partnered with Steve Brown of the local HomeVestors franchise, Cash 4 Houses. To address the blight in several Prichard neighborhoods, Mayor Ron Davis had implemented "Operation Eyesore" to tear down derelict dwellings that attracted criminal activity.
According to the Mobile Press-Register, the hundreds of demolitions resulting from "Operation Eyesore" upset many residents who instead saw lost opportunities to preserve or create homeownership. The partnership with Cash 4 Houses is a new effort to help stabilize the neighborhoods in greatest need by purchasing, renovating and reselling the houses.
Some owners complained that they intended to fix up their house, but didn't have the money to make repairs. Mayor Davis responded that owners …
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Publication information: Article title: "We Buy Ugly Houses": A Plus for Community Development? If You Drive Down a Busy Street in an Urban Community, You May See a Brightly Painted Yellow and Red Billboard That Says, "We Buy Ugly Houses.". Contributors: Milner, Michael - Author. Magazine title: Partners in Community and Economic Development. Volume: 17. Issue: 3 Publication date: Winter 2007. Page number: 18+. © 2008 www.frbatlanta.org. COPYRIGHT 2007 Gale Group.