Is Homebuilding the Right Real Estate Investment Opportunity for You?
Homebuilding can lead to a much faster ROI for investors.
Real estate investors often look for places where they can park their money for years, even decades. It’s a conservative investment strategy that banks on rent and property appreciation to pay long-term dividends.
In contrast, home builders aggressively transform bare earth into assets, creating properties that buyers clamor to own. Those who can build and sell homes efficiently can realize a much faster ROI than investors who simply purchase existing property. These homebuilding real estate investors can then re-leverage their income into more development — and wealth-building — opportunities.
Entrepreneurs looking for real estate investment opportunities can use a franchise’s experience and industry know-how to quickly build and sell homes.
Franchise builders can get into the industry without the hassle of reinventing the wheel and making common mistakes. A homebuilding franchisor’s proven processes, market-ready floor plans, insider bookkeeping knowledge and special marketing tools and technology set up franchise builders for fast returns.
So, do you have what it takes to become a franchise builder? Here are three qualities that excellent franchise builders exhibit as they explore and capitalize on homebuilding real estate investment opportunities.
They scan the market for the right real estate investment opportunity, and aren’t afraid to be ahead of the curve
For several years, apartment construction has boomed as real estate investors have pumped money into building rental housing for Millennials. As rents have marched upward, it’s been a sensible move. However, investors chasing this trend have largely missed an alternative demographic surge that is creating another huge opportunity.
According to a Metrostudy report, the ranks of Americans age 55 and older is growing by 2 million a year, and this demographic is responsible for more than half of new home purchases. Herein lies the opportunity: Metrostudy and the NAHB both report that this demographic is looking for low-maintenance homes and communities with amenities that encourage and enable active lifestyles, such as pools, clubhouses, walking trails, exercise rooms and pavilions.
They have a passion for homebuilding.
Successful franchise builders have a passion for the homebuilding business. Experienced home builders make an especially good fit as they are already familiar with the terminology and protocols involved in getting a project zoned and developed, allowing them to hit the ground running.
That said, anyone can take advantage of the homebuilding real estate investment opportunity. With the support and tools a franchisor provides, franchisees don’t need previous homebuilding experience. For example, a fair number of Epcon franchise builders previously enjoyed successful careers as bankers, attorneys and doctors prior to coming on board as a franchise builder. Case in point: Craig Crossley, a veteran Epcon franchise builder for 20 years, was a mortgage banker before Epcon.
“If you don’t follow the recipe, will you screw up the cake? Absolutely,” Crossley says about building Epcon homes. “But you find out pretty quickly that the recipe that you’re buying into works. To copy something that works takes away a lot of the risk associated with homebuilding.”
Small-volume homebuilders can benefit from partnering with a franchise, too. They can gain a leg up by using a franchisor’s market research and sales and marketing systems. The marketing technologies and materials, project management tools, quality assurance and sales training a good homebuilding franchise provides allows small-volume builders to rapidly expand their existing business. By using the insights and procedures of a franchise to augment the knowledge and professionalism they already have, small-volume builders can scale up operations, enabling them to build and sell as many as 50 to 100 homes a year. The same scalability makes franchising a great choice for production home builders eager to start targeting a new niche of buyers, like active adults.
They are actively involved in their business and their community.
Franchise builders should be active participants in their business with real skin in the game. Successful franchise builders like to be part of the homebuilding community and are engaged in all operational aspects. As with any franchise in any industry, franchisees that are involved in the business and their community can have better operations.
While great marketing and popular home plans help attract buyers, franchise builders earn outstanding reputations through community outreach. For example, Epcon franchise builders Pat and Mike McKee of McKee Homes in Fayetteville, North Carolina host an annual Walk to End Alzheimer’s every September in memory of their father to increase awareness of the debilitating disease and to raise money for related research. The walk has brought thousands of participants to the McKees’ community in Fayetteville and is valuable exposure for their business while simultaneously being a charitable community event.
For in-depth details about partnering with a franchise for a homebuilding real estate investment, download our free franchise report.
Disclaimer: The offer of a franchise can only be made through the delivery of a Franchise Disclosure Document. Certain jurisdictions require registration prior to the offer or sale of a franchise. We do not offer franchises in jurisdictions where we are not registered (or exempt from registration). Epcon Communities Franchising, Inc. 500 Stonehenge Parkway, Dublin, Ohio 43017. Minnesota Franchise Registration No. F-3531.