08 Mar 2017
Helping vets become resident landlordsTopics:
Reed Benet (MBA 1991) is founder and CEO of HeroHomes.com, an online organization that helps military veterans secure no-money-down VA loans to purchase and live in small multifamily homes for housing themselves and income purposes. In this interview, he explains details of the VA Loan Guarantee program that his organization is promoting to veterans as a way of anchoring and investing in their communities.
“HeroHomes is like a Zillow.com for military vets. We find and educate the vets; we get them to the website, which is part of the education process; and we inform them that they have this thing called the VA Loan Guarantee. That’s a no-money-down home-buying power, which was a result of the GI Bill after World War II. And what they particularly don’t know is that you can use this up to a no-money-down $417,000 to $721,000 to buy and be a resident landlord in a duplex, three-unit, four-unit, or a five-unit, and one of those units can be a commercial unit.
“So the original thought is surging military vets into the decayed urban core of post-industrial cities, where land is vacant and available and potentially valuable, if you can create industrial-strength demand for it. But there was something missing, and that was this resident landlordship opportunity.
“So in our phase three or four, when we get to vet crowd-buying, where we get to prequalifying a hundred to a thousand vets at a time, and they’re bringing $42 million to $417 million dollars of buying power, you’ve got some market power, particularly if the issue isn’t the supply or the amount of suppliers.
“There are many people that are focused on vets in a foundation, nonprofit, and government effort. And in terms of lending and the basics of a one-unit home, everybody’s doing this. But nobody’s specifically going after finding the vets and educating them to the opportunity that they have this no-money-down, resident-landlordship opportunity.
“We have 350 vets in the pipeline. We have nine prequalified to buy property. And we have six actively shopping, and we’re in 35 states.”
Editor’s note: Some of the figures in this article have been updated since the video interview took place.
(Published March 2017)
Class of MBA 1991, Section C