‘We Buy Ugly Houses®, Explained:’ 9 Things to Know About the House Flipping Franchise

3. Over 1,000 real estate investor franchisees are employed under the We Buy Ugly Houses® brand, run by CEO Larry Goodman.

After planting roots in Texas, We Buy Ugly Houses® then franchised in Kansas City and Atlanta as real estate investors adopted the house-flipping model under a common name in new territories. From there, the business over time went countrywide. We Buy Ugly Houses® has purchased over 140,000 houses to date, through a network of more than 1,100 independently owned and operated franchisees across 46 states.

D’Angelo passed away in 2005, and John Hayes, a franchising expert, succeeded him until 2009. In the summer of this year, David Hicks, who had been with HomeVestors for 18 years, stepped down as the head of the company. Hicks developed the company’s process for coaching franchisees. Under his leadership, HomeVestors 2020 ranked for the sixth time on the annual Inc. 5000 list of the nation’s fastest-growing private companies, based on 62% growth in revenue over three years.

Leading the company today is Larry Goodman, who brings over 35 years of real estate experience, including 12 years as the COO of a national multifamily property management firm and 15 years in various roles related to investment and asset management, overseeing a diverse range of commercial and residential assets for pension funds, insurance companies, and high net worth investors.

D’Angelo’s legacy carries on through the continued growth of We Buy Ugly Houses®, and the company maintains its Dallas headquarters to this day.

4. The shaggy-haired caveman repping We Buy Ugly Houses® has a name — and a backstory.

He sports a holey yellow tunic, and a bushy brown beard, and is always carrying a bag of cash. You may know him as the caveman on those roadside billboards, but he does have a name.

We’re talking about HomeVestors’ Ug Lee, of course, who grew up “before the internet or cell phones, when communication was derived from a series of grunts and taps on the head via club,” We Buy Ugly Houses® elaborates on its website.

As it turns out, Ug Lee has a great appreciation of homes that may be a little rough around the edges from firsthand experience. Once while he was seeking shelter in the rain, he stumbled upon a pile of debris that turned out to be a spacious cave. With some TLC and sprucing up, Ug Lee was able to rehab the terrain into an inhabitable shelter, a feat that greatly impressed the rest of his tribe, aptly named the Vestoreans.

5. From ugly homes to ugly situations, HomeVestors won’t shy away from a property.

The story of Ug Lee represents HomeVestor’s dedication to seeing the beauty in what a home could be. Its name and slogan let sellers know that the company will embrace a home or situation that other buyers find unattractive, such as:

• Homes with roofing, foundation, plumbing, electrical, or other structural issues.
• Homes located in a flood plain or other inconvenient location.
• Homes with high-interest rates or mortgage payments that are too high to handle.
• Homes are connected with bad memories for the homeowner, such as a divorce or death.
• Inherited properties that the seller may be unfamiliar with.

More than 80% of the houses that the We Buy Ugly Houses® franchises purchase are less than 1,400 square feet and were built before 1980. Hicks, the former CEO, recalls that the company has taken on homes with major clutter issues, including one that had pet monkeys and another with bats in the attic.

The company conducts the annual Ugliest House of the Year contest and declared a Hollywood, Florida home transformation as The Ugliest House Of The Year® for 2022, chosen through a national vote from among over 30 major home renovations.

The winning property is a West Palm Beach home, renovated by franchisee Don Cameron, and this accolade comes with a $20,000 donation to his local Habitat for Humanity. When Cameron acquired the 1,035-square-foot single-story ranch built in 1959, it suffered extensive fire damage caused by an unattended candle left on the back patio and blown onto a rug.

6. It took sellers time to trust the simple process of a cash, ‘as is’ sale.

“You’ll buy my house — in any condition? You aren’t going to list it?” In the early days of HomeVestors, sellers were skeptical that HomeVestors would provide an offer for their properties, which in many cases were falling apart.

This comes from Mark McKellar, a former HomeVestors development agent, and owner of multiple We Buy Ugly Houses® franchises, who spoke to Franchise Business Review about his experiences with the company in its earlier days.

In the beginning years of We Buy Ugly Houses®, franchisees had to build trust that their deal was legitimate — i.e., sellers didn’t have to do any work to their home, and HomeVestors would still pay them something for it.

According to FranchiseBusinessReview, investing in a HomeVestors franchise is a great financial choice. In 2022, the average profit from selling homes was $603,353, excluding certain costs. The top performers earned an even higher $1,696,458. HomeVestors franchise owners love what they do, with 90% enjoying their businesses. The company also excels in supporting its franchisees and has been a top franchise for over a decade. In 2023, HomeVestors received recognition as a Top Low-Cost and Top Recession-Proof franchise, recognized as both a Top Low-Cost Franchise and a Top Recession-Proof Franchise.

7. We Buy Ugly Houses® will base their offer on the level of work required, among other factors.

To sell a home through We Buy Ugly Houses®, a homeowner fills out the website contact form or calls the company to connect to a franchise in their area. A representative visits the property evaluates the condition of the home, and makes a cash offer depending on several factors, including:

• The home’s current condition.
• The approximate cost of renovations and repairs.
• The time anticipated for renovations and repairs.
• The “post-renovation” value compared to other homes in your area.
• The costs of maintaining the home until it sells (such as paying for utilities, taxes, and insurance).
• The real estate commissions required to sell the home.

Many rehabbers use the flipping industry standard known as the 70% rule, where an investor offers no more than 70% of a property’s after-repair value for a house they plan to flip. They subtract any estimated repair and holding costs from that 70%.

Franchisee Ali Hasan told Austin’s Studio 512 in 2019 that they can close on a property within two weeks, which helps clients such as people who need to relocate quickly and can’t carry two mortgages.

Some offers are negotiable, though. Henry Dunn, 79, of Lauderhill, Florida, told The Miami Herald that he rejected the $225,000 offer that We Buy Ugly Houses® made on his three-bedroom, two-bath home, thinking it was too low. The Miami Association of Realtors says the median sales price of single-family homes in South Florida is $450,000.

However, after a few real estate agents said the house “needed too much work,” Dunn texted the same We Buy Ugly Houses® rep with a higher counteroffer, which the franchisee accepted that day.

8. It’s recommended to gather other estimates of your home’s value before selling to any cash buyer, including We Buy Ugly Houses®.

The “cash for your home” rehabbing business model has led to what some housing advocates call predatory tactics, particularly in gentrifying neighborhoods. In Atlanta, Georgia, for instance, wholesalers and investors in 2020 left postcards and fliers at homes in disrepair and tracked down the owners, phoning them with cash offers, American Public Media (APM) reported.

Resident Emmanuel Hall told APM that he helped sell his stepfather’s home a few years ago to We Buy Ugly Houses® for $17,600 after his family received about a dozen fliers in the mail. The offer was less than what the family paid for the purchase in the 1970s.

We Buy Ugly Houses™ resold the home months later for $100,000 to another investor, who then renovated it and sold it again for $300,000. Hicks, the company’s CEO, shared photos of the roof damage with APM and said We Buy Ugly Houses® had to repair the home before it could sell it to an investor for a full renovation.

Some cities such as Chicago, Illinois, have passed laws prohibiting investors from calling for six months after homeowners turn down their offers. In Atlanta, meanwhile, city officials and community groups hosted workshops and urged residents to investigate what their homes were worth before selling.

“I think at the end of the day at least making sure people know what their houses [are] generally worth is the most important step,” Georgia State professor Dan Immergluck told APM. He suggested that the city add a requirement to the home-selling process where homeowners would receive estimates of their home’s value before closing, similar to how other cities mandate home inspections.

Before you accept any cash offer, investigate what your home is worth through a comparative market analysis (CMA), which many real estate agents offer for free. If you’d like to connect with a top real estate agent experienced in putting together CMAs that objectively show you what your house is worth, HomeLight would be happy to connect you.

9. We Buy Ugly Houses® isn’t the only route to a quick and low-hassle sale.

HomeVestors has become a major franchise offering continuity among real estate investors who purchase homes under the We Buy Ugly Houses® brand. That said, the company isn’t the only means of selling your home for cash, nor are ugly homes the only properties investors may be interested in.

HomeLight developed our Simple Sale option for home-sellers knowing that the convenience of a cash offer appeals to an array of sellers, whether they aren’t comfortable showing their home while it’s on the market or need to relocate quickly for a new job in another city. Through Simple Sale, HomeLight works to match you with an investor in your area who can make a full cash offer on your property so that you can sell your home on your timeline, in as few as 10 days or whenever you’re ready. The cash offer you receive will be competitive, with no hidden fees or agent commission costs involved.

A Fast, Convenient Way to Sell Your Home

Get an all-cash, no-obligation offer through HomeLight’s Simple Sale platform whenever you’re ready. Receive your offer in as little as a week and close in as few as 10 days. No showings, no repairs, no open houses.

Request a No-obligation Cash Offer

Like selling with We Buy Ugly Houses®, HomeLight Simple Sale, can let you skip the repairs, prep work, and open houses and go straight to receiving an offer for your house “as is.”

However, the Simple Sale platform can also provide offers for people with houses in fair or even great condition looking for a fast sale. To help you make sure you’re receiving a top offer for your home, we’ll compare your Simple Sale cash offer against an estimation of what you could realistically fetch on the open market with the help of a top real estate agent, so you can make an informed decision while weighing your selling priorities.

Header Image Source: (Jim Lukach / Flickr via Creative Commons Legal Code)