how does this work / NHBA franchise

I ran across a franchise w/ National Home Buyers Assistance.

Basically as a franchise owner you have guaranteed for you access to $3mill. w/ the franchiseor lender. Then you go out and advertise for people that can’t buy homes through traditional lenders due to poor credit or lack of down payment funds or whatever. then you tell them to go pick out a house…anyone they want, even a new construction and then you but it for them via your own credit but you have to go through the franchiseor lender “prime lending group” that guaranteed you access up to $3mill.

Then you lease/option the house to that buyer. After 12 months they can execute the purchase option or walk away.

Heres my ? / what I don’t get: You’re gamling that in the 12 months they can save up down payment funds and clean up their credit enough to qualify for 100% to purchase the home. Now problem number 2 is if you buy the house at 100% of appraised value and set a purchase price on the front end of the deal, then I don’t see any real way to make money on it. The system is set up so the buyer can apply 50% of rent monies towards purchase price of home. How can that be, b/c you have a traditional loan on the property using your credit and when you amortize that out, you’ll only have paid down the principal about 2k. +/- a little depending on the size of the loan. however the buyer will be able to apply 5-7k of rents paid as down payment, so you’ll be upside down on your payoff.

then there is no guarantee that the home will have appreciated, which wouldnt matter anyway, b/c you paid full market for it and are bound by the contract price set at the beggining…

Can anybody tell me what I’m missing here? Or if you’re familiar w/ this company tell me what is so great about them?..By the way, they clear 3% on every deal, so where does that leave the franchisee room to make any money?


You’re gambling a lot. I’m really skeptical of anything that says you can pay retail and make money. The idea is you can inflate your selling price by offering easier terms. When you give them 50% rent credit, that’s just crazy. You’re walking into equitable interest problems.

By the time you throw in their 3% and your transaction costs, I don’t see you making any money at it.

yea, that’s what I said. I’ve been talking w/ one of their recruiters and when I asked him these ?'s via emial he would not respond.

Red flag city!!! right?

Yeah, I wouldn’t pay for one of their franchises. The only thing they offer is the line of credit with them which is probably at a high interest rate anyway.

Walmart didn’t become dominant by paying retail and trying to mark it up. They did it by buying at a discount, marking up less, and being more efficient. That way you have a lower price and higher profit. That’s a winning business plan.

I can answer your questions / concerns.

  1. Since most are first time buyers, usually they can get a 100% Loan-to-value mortgage, or some other mortgage that will fit their (down payment) needs. Some mortgages (like FHA) have no credit score requirements.

  2. You don’t buy the house at 100% of appraised value. Most of the time you can buy the house at something below that. In most housing markets still, houses are appreciating at 6% or more per year. So if the house is sold at appraised value on the back side, there is ample room to make money.

Certainly choosing the client carefully is important. Clients who are willing and able to make some changes and get their credit in order, in a year, are out there and ready to participate in a program such as this. There is risk – some clients will walk away because of sickness, divorce, what have you. But all businesses have risk!

As far as your other concerns about rent credits, being upside down in the mortgage, prime lending, etc, I can tell you that you have not done enough research. The program works. It is a WIN-WIN-WIN for the client, for the franchisee, and for the realtor.

I take it you’re a franchisee? I see you point, and I did talk w/ them about rent monies. They would actually only cover the closing costs, through seller concessions…which I don’t like b/c invariabley it’s still coming out of my pocket.

I dont doubt the program works, but the general premise of paying retail or close to retail is suspect to me unless the home is in a neighborhood that you KNOW is appreciating. of course you can always control where the person buys…

I dont need them to take 3% on each of my deals though. They don’t offer anything that I can see that is worth that…I’m still using my credit to buy the homes…I’m a broker by trade I can do that my self alot cheaper. as for name branding…I’ve never heard of them until I started hunting…so that want help in my market.

anyway…if it works for you.

Automatic red flag…a first post by someone which promotes someone or something…such as the post by rickvbvb. Be wary of their opinions.

Yeah bobo, I think that’s a tad obvious what’s going on here. I doubt people are getting rich with a 6% markup.

Don’t think I was promoting anything… “skydive” asked if anyone could tell him what he was missing. I answered skydive’s concerns and provided another viewpoint. Isn’t that what’s going on here?

I don’t believe I said it works for me…But if you take the time to do the math, the final markup is more than 6%.

It’s fairly obvious that anyone can open a hamburger stand without paying for a franchise. The argruments for and against franchising are fairly standard and well-known. If you are already successful selling your own hamburgers, why think about opening a franchised restaurant? But if you’ve been selling bicycles all of your life – but you now want to sell hamburgers – maybe a McDonald’s is for you!

And as for the first-post thing…well that’s just about the silliest thing I’ve ever heard!!! People’s knowledge, experience and/or wisdom do not accumulate based on the number of times they post!!

The motivation looks a little suspect. You just happen to sign up for this message board. Then you’re 1st two posts are about a business that everyone is questioning? Right…