HomeVestors (We Buy Ugly Houses) Item 19: $287K median across 898 franchised territories in 2024. Why real-estate-investing franchise economics differ from operating franchises, and what buyers should underwrite.
Quick answer: HomeVestors (the “We Buy Ugly Houses” franchise) reports a $287K median revenue across 898 territories — but the number means something different here than at operating franchises. HomeVestors franchisees are real-estate investors using the brand’s marketing system and deal-evaluation tools. Revenue is deal proceeds, not operating revenue. Per-deal economics, capital recycling speed, and local-market real-estate dynamics determine unit profitability — not the annual revenue figure. Underwrite this as a real-estate investment business with a franchise-system overlay, not as a conventional franchise.
HomeVestors’ most recent Item 19:
| Metric | Value |
|---|---|
| Sample size | 898 franchised territories |
| Sample criteria | Franchised units operating all 12 months of 2024 |
| Reporting period | January 1, 2024 - December 31, 2024 |
| Median annual revenue | $286,884 |
| Total system units | 981 |
| Total investment (Item 7) | $150,000 - $477,250 |
| Franchise fee | $85,000 |
| Royalty rate | 0.8% to 3.0% |
| Ad fund | $300 (flat monthly) |
The 898-territory sample with the full-12-month filter is methodologically conservative. The disclosure represents franchisees who operated as established businesses during the entire calendar year 2024 — excluding ramp-stage operators.
The royalty structure is unusual: 0.8-3.0% sliding scale plus a flat $300/month ad fund (not a percentage). The flat-dollar ad fund makes sense in a deal-based business where revenue varies enormously deal-to-deal; a percentage-of-revenue ad fund would produce unstable franchisor cash flow.
Most franchise Item 19 disclosures describe operating revenue: customer transactions × average ticket = annual sales. HomeVestors revenue is structured differently:
Revenue source 1: Retail flips. Franchisee buys a distressed house (say, $80K), renovates ($30K-$60K of materials and labor), sells at retail (say, $180K). Revenue recorded in Item 19 is typically the resale proceeds. Per-deal “revenue” might be $150K-$300K, but the franchisee’s actual gross profit is $20K-$60K after accounting for acquisition and renovation costs.
Revenue source 2: Wholesale assignments. Franchisee puts a distressed house under contract at a low price, assigns the contract to a cash investor for a fee. No actual purchase or renovation — just the assignment fee. Per-deal revenue might be $5K-$25K with minimal capital deployed.
Revenue source 3: Hold-and-rent. Some franchisees acquire distressed properties for rental portfolios. Item 19 revenue may include rental income on held properties.
A $287K median revenue could represent any of these patterns: 1-2 retail flips, 10-20 wholesale assignments, or some mixed model. The same revenue figure represents materially different underlying businesses depending on the mix.
For a buyer, this means the median is essentially an indication of activity volume, not of profitability. Two franchisees at the same revenue could have radically different net incomes.
The Item 7 investment range of $150K-$477K covers the franchise setup costs: franchise fee ($85K), training, marketing setup, initial advertising commitment, and operating reserves. It does NOT include the working capital required to actually buy houses.
Typical real-world capital requirements:
Most franchisees finance the acquisition capital through:
Buyers evaluating HomeVestors must underwrite two capital decisions: the franchise setup capital ($150K-$477K) and the operating capital required to run the deal business ($500K-$2M+). The franchise economics work only if both capital pools are available and properly cycled.
| Brand | Sample | Median AUV | Investment | Business Model |
|---|---|---|---|---|
| HomeVestors | 898 | $287K | $150K-$477K | House investing |
| Keller Williams (broker) | larger | varies | $48K-$76K | Real estate brokerage |
| RE/MAX (broker) | larger | varies | $39K-$245K | Real estate brokerage |
| Two Maids & A Mop | smaller | $400K-$600K (est.) | $80K-$140K | Cleaning services |
| Real Property Management | smaller | $500K-$1.5M (est.) | $90K-$120K | Property management |
| HouseMaster | smaller | $200K-$400K (est.) | $65K-$98K | Home inspection |
HomeVestors is unique among real-estate-adjacent franchises in that it’s a principal-investing business, not a service or brokerage. Comparable franchises (brokers, property management) operate as service businesses with different unit economics, capital structures, and risk profiles. The closest conceptual peer is no longer franchised — it’s the broader independent real-estate-investing community.
A new HomeVestors franchisee in months 1-12 typically generates:
That’s 50-75% of system median. Year-one ramp is constrained by:
Year two typically reaches the system median. The strongest franchisees ($1M+ annual revenue territory) typically:
For broader category context, see our real estate brokerage franchise breakdown and Item 19 average vs. median. For brand-specific cost detail, the live HomeVestors franchise page.
HomeVestors' most recent Item 19 reports a $286,884 median annual revenue across 898 franchised territories operating all 12 months of 2024. The disclosure covers franchised units only — methodologically conservative.
HomeVestors franchisees are real-estate investors using the brand's marketing system, lead flow, and deal-evaluation tools. 'Revenue' is the proceeds from house sales (after acquisition and renovation costs) plus wholesale assignment fees. It is not the operating revenue of a retail or service business. A $287K median could represent 3-5 completed deals at modest margin each. Unit profitability depends heavily on the cost structure of each deal, not on revenue volume alone.
Legally it's a franchise — HomeVestors files Item 19, charges franchise fees, and operates under franchise law. Operationally it functions as a business-system license for real-estate investors. The franchisor provides: (1) the 'We Buy Ugly Houses' brand and consumer marketing system that generates seller leads, (2) deal evaluation training and tools, (3) lender relationships, and (4) some operational support. The franchisee runs an independent real-estate investment business using those tools.
Per-deal economics matter more than annual revenue. A typical HomeVestors franchisee might complete 4-12 deals per year. Gross profit per deal (resale minus acquisition minus renovation) typically runs $20K-$60K for retail flips and $5K-$15K for wholesale assignments. Active capital deployment per deal is $80K-$300K+. A franchisee underwriting needs to model: monthly deal flow, average gross profit per deal, capital recycling speed, and downside cases for stalled inventory.
Item 7 reports a total initial investment range of $150,000 to $477,250. The franchise fee is $85,000 — notably high. Royalty is 0.8% to 3.0% (varies by revenue tier); ad fund contribution is a flat $300 per month. Critically, this Item 7 does NOT include the working capital required for actual house acquisition and renovation — most franchisees deploy $200K-$1M+ of additional capital into inventory.
This page is part of VetMyFranchise. View all pages: llms.txt · llms-full.txt