• filter:

HomeUnion - investing in real estate without the hassle?

  • Page :
  • 1
  • Text Only
  • Search this Topic »
Voting History
rated:
Anyone tried HomeUnion? I like the model behind it. You put up the cash, and they do all the leg work for a reasonable fee. You still make an reasonable profit. Returns look good. Website looks professional. Any one with experience with this site or similar site?

Member Summary
Most Recent Posts
I have not used HomeUnion but I saw it before and it looked interesting.

To me it was interesting because homes here in P... (more)

jerosen (Apr. 12, 2017 @ 12:22p) |

yessss, yessss, real estate is a terrible investment...nobody should do it.

*continues to buy real estate like almost eve... (more)

solarUS (Apr. 12, 2017 @ 3:50p) |

Some offerings are better than others. Shady neighborhoods offer better returns.

This one is supposedly in a good neighb... (more)

SegaRob (Apr. 13, 2017 @ 5:57a) |

Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

rated:
Why don't you try it out and report back to FW the results?

rated:
I might do that but I figure I would check in first to see if anyone else has experience before i dive in.

rated:
SegaRob said:   Website looks professional. 
  Which means nothing. Anyone can build a nice website.

rated:
I dont know about the fees, does anyone who manages rental property on their own have an opinion?:

Asset Acquisition (3.5% of the purchase price) and Asset Management (10.5% of monthly rent). These are minimal fees for all the time and effort we save you. Each property in our investor portal has our fees built into the Yield.

rated:
You're basically describing a REIT, but without any of the positives.

If you want to dip a toe into RE, pick a sector, find a good REIT, invest in it and you're done.

rated:
These fees might be a bit on the high side. I can get top notch property management in my area for 7% and no acquisition fees. I have no experience with HomeUnion. There are many companies across the country doing this with mixed results. You are trusting someone else to tell you what a property is worth, it's condition, estimated cost of repairs, and estimated monthly rents. There have been cases of investors getting burned by poor or outright misleading figures. Having rentals myself, I feel this is something an investor should know for themselves. If you dont have the time or inclination, stick to REITS.

rated:
REITs are not bad, but yields are not as high as the ROI that homeunion is showing. The numbers do look realistic, though projections are obviously subject to error.

Fees might be more than some other options, but don't seem exorbitant for a full service purchase and management. considering the projected ROI after factoring in the fees, the fees don't seem too bad.

Yes, you are trusting them with a lot of things. For the me tradeoff of fees for the time is worth it. The real question is, are they trustworthy? That's why I figure I would ask here to see if anyone has experience with them.

rated:
They show a total of 20 houses in the Cleveland area.

There are a lot more than 20 houses available in the Cleveland area, even restricting to just the specific communities where these houses are. So how/why are they presenting those ones and not others in the same areas?

Only sfr appear to be available via them.

You can become a member for free (use a throwaway email address), look up properties and, since they include the propert addresses, look outside of the site for them.

rated:
SegaRob said:   REITs are not bad, but yields are not as high as the ROI that homeunion is showing. 
...
(But) For the me tradeoff of (yield) for the time is worth it. 

FIFY.
Seriously, this is the very definition of dumb money.... you have no diversity like the REIT, but you don't have the amortization/depreciation/tax benefits that active investing brings.
If you really want crazy risky but inactive income, go to a real estate meetup and make hard money loans at 60% LTV to your broker's CMV.
Either you'll get 12-18% returns, or you foreclose and get a nearly finished property for 40% discount. (Maybe more if he's made improvements, maybe less if it burns to the ground.)
If you feel super risky, use Roth IRA money, and get 12%+ tax free.*

* For the average investor this is a really stupid idea, and they would be much better off buying a REIT, but I'm trying to perpetuate OP's fantasy that he can get passive above market returns.
 

rated:
Why don't you get benefits of tax deduction and depreciation? Their website says you do.

rated:
I could be wrong, but I thought those required active management.

rated:
I think to formulate an opinion youd have to delve in and research one of their recent acquisitions to determine if they made a wise decision as to property, price, rents, location, future projections. All of the things you would need to do if you were purchasing yourself. Then you have a basis for level of trust. From an investment perspective, you need to determine the oversight and regulations the company are subject to.

rated:
ThomasPaine said:   I could be wrong, but I thought those required active management.
  
Rentals are generally passive activities.   But you can still deduct depreciation etc.      for a rental to be an active investment you have to be a real estate professional and work in the industry a minimum 750 hrs a year.  

There are limits on passive loss deductions and to deduct those you have to at least be an 'active participant' in the property.    You can still be considered an active participant with a property manager.   You just have to make some decisions (approve tenants, dictate terms, approve repairs, etc.).   Telling a PM what to do counts.   But this is just about deducting LOSSes.   Those are capped at $25k and have income limits too.   And you should try not to have losses in the first place.




 

rated:
JaxFL said:   I think to formulate an opinion youd have to delve in and research one of their recent acquisitions to determine if they made a wise decision as to property, price, rents, location, future projections. All of the things you would need to do if you were purchasing yourself. Then you have a basis for level of trust. From an investment perspective, you need to determine the oversight and regulations the company are subject to.
Yeah. I figured the best way to do that would be to hear from someone else's experience but seems like no one else has had experience with them yet.

rated:
Here's my general, dumb-man's advice. If the returns are above market value, its a passive investment, the risk is low, and it doesn't have a significant barrier to entry - it's either flooded with investors or it ain't real.

rated:
Darrone said:   Here's my general, dumb-man's advice. If the returns are above market value, its a passive investment, the risk is low, and it doesn't have a significant barrier to entry - it's either flooded with investors or it ain't real.
i don't think anyone is saying the risk is low. 

rated:
What would be interesting .. if you could buy a "slice" vs. the whole thing of a direct rental property like a large apartment complex. Let's say the complex is worth $5M and someone manages it. If you could buy & sell (easily) say 1% or maybe 0.5% ownership - and get fractional return. And if there are pool of available properties like these ... you pick and chose say slice of 5 or 10 rental property to create some sort of portfolio.

rated:
prozario said:   What would be interesting .. if you could buy a "slice" vs. the whole thing of a direct rental property like a large apartment complex. Let's say the complex is worth $5M and someone manages it. If you could buy & sell (easily) say 1% or maybe 0.5% ownership - and get fractional return. And if there are pool of available properties like these ... you pick and chose say slice of 5 or 10 rental property to create some sort of portfolio.
Interesting idea. I imagine it exists somewhere but these site focuses on single family homes. Maybe you should create it if it doesn't exist.

rated:
Darrone said:   Here's my general, dumb-man's advice. If the returns are above market value, its a passive investment, the risk is low, and it doesn't have a significant barrier to entry - it's either flooded with investors or it ain't real.
1. I suppose the returns are below market value in the markets they pre-select because the fees eat into the returns. But that might stilll mean returns are better than market value than in your own local market.
2. Risk isn't low like a t-bill but this isn't pure speculation either. Risk is similar to other real estate investments.
3. The turnover on properties seems to be high so seems like fair amount of demand from investors.

rated:
SegaRob said:   
prozario said:   What would be interesting .. if you could buy a "slice" vs. the whole thing of a direct rental property like a large apartment complex. Let's say the complex is worth $5M and someone manages it. If you could buy & sell (easily) say 1% or maybe 0.5% ownership - and get fractional return. And if there are pool of available properties like these ... you pick and chose say slice of 5 or 10 rental property to create some sort of portfolio.
Interesting idea. I imagine it exists somewhere but these site focuses on single family homes. Maybe you should create it if it doesn't exist.

  
i subscribe to an investment letter who sends promo materials for stuff like that.  Last one i saw was for a massive building i think in Chicago ... but minimum investment was too high for me like $500K or so.  Plus you need to be a well qualified investor (i.e. very high net-worth) etc.  The barrier to entry was too high.  I would've really liked something for retail investor .. maybe with much smaller slice like say $10K or maybe even $50K.

rated:
SegaRob said:   Risk is similar to other real estate investments.
 

eh..."other real estate investments" is a pretty broad sector with myriad risk: reward scenarios.

I'd say: Risk is similar to hands-off buy-and-hold landlording, except:

> overhead is higher
> acquisition cost is higher

I don't know what kind of inventory they are offering, but i would bet dollars to donuts that they are NOT listing the most well-priced property. really good deals wouldnt end up in that pot, i don't imagine.

rated:
Investing in real estate is a poor option for many reasons. I would consider an REIT first so you get the upside of rental and property values rising and the diversification without the downside of the poor liquidity and high transaction costs. And if you are OK with those downsides it would be better to buy the home yourself and have lower costs. For most people I would consider a whole market index fund before investing in real estate. The risk for the yield is just not there with single family homes once you factor in all the management fees.

If you are buying the home with a mortgage it is a leveraged asset. This means a relatively small change in the market can wipe you out. A larger change can mean you cannot afford to sell the home without a short sale. Investing in a single family home and most other real estate is illiquid. It can takes many months to sell if you need the cash. There are substantial transaction costs. When buying you generally pay 3% in closing costs, plus the acquisition fee, and when selling you pay 6% in realtors commission and another 1% in closing costs. Long term maintenance on a home is deceptively high. A new roof or replacing a sewer line can be over $10k. Paint and carpet will not last as long with renters as they would with homeowners in general. The rule of thumb is 1% of the price of the home per year is on the low side for the average home. Homes depreciate, and land generally appreciates. Even if you are keeping up on maintenance aesthetics and features change over time. Very few people would be interested in a 3 bed 1 bath home now. Just after world war II it was common to build a 3 bedroom home with 1 bathroom and space to add a fourth bedroom in the attic. Renovating a home to add a bathroom can cost $10k+, and if you don't do it you will have a hard time selling. Rental income and the sale price are tied to affordability and the local job market. If there is a change in a large employer in the area it will affect both your rental income and the sale price if you decide to sell. Owning a single family home has no diversification. If you get a bad renter that makes a meth lab, or there is a disaster like a sinkhole or foundation shift that is not adequately covered by insurance your investment can be worthless.

rated:
I have not used HomeUnion but I saw it before and it looked interesting.

To me it was interesting because homes here in Portland OR have a low rent / cost ratio.    We have good appreciation but cash flow is poor relatively.    Buying a house here is usually going to give you rent / price around 0.5% range.   OTOH our values have been going up ~10% a year so we have good gains from appreciation.    
I really don't like to bank on appreciation like that as much and would prefer to have more bankable cashflow for our equity.    But I don't get that locally.      I don't like being a long distance landlord.   HomeUnion looks like it could give me access to good properties with good rent/cost ratios and cashflow.     

But I then look at the homes they offer.  In Atlanta market I see 2 homes.  Neither are close to Atlanta proper and are actually in suburbs with 30-45 minute commutes.   OK.   Maybe thats normal in Atlanta, I don't know.    THe houses are in the $150-200k range and look nice enough.   but the rent / cost ratios are only around 0.9% range.  So not a stellar bargain.   cash on cash return is 4%.   Hmmm.     I can go buy a house in Portland for something around $250-300k and get 4% return cash on cash or maybe 2% if I hire  PM.      So I checked what HomeUnion had in INdianapolis.   There cash on cash is even worse only around 2% and rent/cost is still 0.9% level.   

If you are in a market with better rent/cost ratios than an expensive market like Portland then you can easily do better just buying a house and hiring a PM locally.   
If you're in a more expensive market like mine HomeUnion seems interesting but the deals just don't look that great.   They ought to easily beat Portland cash flow in some of those markets but they don't really.

It seems like an interesting idea but the properties they offer don't seem like great investments when I look at the bottom line.    

 

rated:
gnopgnip said:   Investing in real estate is a poor option for many reasons. I would consider an REIT first so you get the upside of rental and property values rising and the diversification without the downside of the poor liquidity and high transaction costs. And if you are OK with those downsides it would be better to buy the home yourself and have lower costs. For most people I would consider a whole market index fund before investing in real estate. The risk for the yield is just not there with single family homes once you factor in all the management fees.

If you are buying the home with a mortgage it is a leveraged asset. This means a relatively small change in the market can wipe you out. A larger change can mean you cannot afford to sell the home without a short sale. Investing in a single family home and most other real estate is illiquid. It can takes many months to sell if you need the cash. There are substantial transaction costs. When buying you generally pay 3% in closing costs, plus the acquisition fee, and when selling you pay 6% in realtors commission and another 1% in closing costs. Long term maintenance on a home is deceptively high. A new roof or replacing a sewer line can be over $10k. Paint and carpet will not last as long with renters as they would with homeowners in general. The rule of thumb is 1% of the price of the home per year is on the low side for the average home. Homes depreciate, and land generally appreciates. Even if you are keeping up on maintenance aesthetics and features change over time. Very few people would be interested in a 3 bed 1 bath home now. Just after world war II it was common to build a 3 bedroom home with 1 bathroom and space to add a fourth bedroom in the attic. Renovating a home to add a bathroom can cost $10k+, and if you don't do it you will have a hard time selling. Rental income and the sale price are tied to affordability and the local job market. If there is a change in a large employer in the area it will affect both your rental income and the sale price if you decide to sell. Owning a single family home has no diversification. If you get a bad renter that makes a meth lab, or there is a disaster like a sinkhole or foundation shift that is not adequately covered by insurance your investment can be worthless.

yessss, yessss, real estate is a terrible investment...nobody should do it.

*continues to buy real estate like almost every person of wealth, ever*

rated:
jerosen said:   I have not used HomeUnion but I saw it before and it looked interesting.

To me it was interesting because homes here in Portland OR have a low rent / cost ratio.    We have good appreciation but cash flow is poor relatively.    Buying a house here is usually going to give you rent / price around 0.5% range.   OTOH our values have been going up ~10% a year so we have good gains from appreciation.    
I really don't like to bank on appreciation like that as much and would prefer to have more bankable cashflow for our equity.    But I don't get that locally.      I don't like being a long distance landlord.   HomeUnion looks like it could give me access to good properties with good rent/cost ratios and cashflow.     

But I then look at the homes they offer.  In Atlanta market I see 2 homes.  Neither are close to Atlanta proper and are actually in suburbs with 30-45 minute commutes.   OK.   Maybe thats normal in Atlanta, I don't know.    THe houses are in the $150-200k range and look nice enough.   but the rent / cost ratios are only around 0.9% range.  So not a stellar bargain.   cash on cash return is 4%.   Hmmm.     I can go buy a house in Portland for something around $250-300k and get 4% return cash on cash or maybe 2% if I hire  PM.      So I checked what HomeUnion had in INdianapolis.   There cash on cash is even worse only around 2% and rent/cost is still 0.9% level.   

If you are in a market with better rent/cost ratios than an expensive market like Portland then you can easily do better just buying a house and hiring a PM locally.   
If you're in a more expensive market like mine HomeUnion seems interesting but the deals just don't look that great.   They ought to easily beat Portland cash flow in some of those markets but they don't really.

It seems like an interesting idea but the properties they offer don't seem like great investments when I look at the bottom line.    

 

Some offerings are better than others. Shady neighborhoods offer better returns.

This one is supposedly in a good neighborhood and offers decent returns especially if you consider the returns are after all the fees and expenses.

https://investor.homeunion.com/#property-detail/da1bd321-3980-44e1-9507-7759901b8ef7/25

  • Quick Reply:  Have something quick to contribute? Just reply below and you're done! hide Quick Reply
     
    Click here for full-featured reply.


Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017