The National Association of Responsible Home Rebuilders and Investors (NARHRI) was originally the vision of Ken D’Angelo, founder of HomeVestors of America. This vision sprang from D’Angelo’s concerns about both upcoming legislation that would affect the real estate industry and dishonest investors creating problems for responsible investors. NARHRI aims to solve these problems and make the industry friendlier to investors and their clients.
One of the problems facing the real estate investment industry today is that, in an effort to squeeze unscrupulous investors out of the market, new legislation often hurts honest investors as well.
“We want to do everything we can to isolate the bad guys and get them out of the industry,” John Grant, executive director of NARHRI, said. “And good investors do need a voice, because…we’ve started to see regulatory and legislative proposals that I think are well-intended, but go too far in that they hurt honest professionals who are going about their daily business.”
NARHRI focuses on “big ticket” items, Grant said. Examples include attempts to ban specific transaction types, foreclosure consultant regulations and other similar bills.
In its efforts, NARHRI employs an approach known as regional lobbying. “It’s very simple,” Grant said. “We hire a big firm—a big lobbying shop—to handle several states for us. These are firms that have offices in multiple states, and it’s a lot easier for them.”
Regional lobbying is more cost-effective than a state-by-state approach, Grant said. He said he estimates the cost of a regional lobbyist to NARHRI to be around $120,000 per year. In contrast, he said he estimates that the cost of state-by-state lobbying is anywhere from $300,000 to $600,000 per year.
NARHRI has used the regional lobbying approach to fight several bills. Its efforts have included lobbying against the banning of subject-to transactions in North Carolina since the organization’s inception three years ago and fighting against a bill passed in Texas that banned lease options. Grant said he believes these bills are too harsh, and that NARHRI hopes to find an appropriate and legal way to allow these transactions to be used again.
However, NARHRI does not only lobby against proposed legislation. It also promotes favorable bills and pushes for changes to legislation that is good in principle but stands to harm investors.
“We were in Colorado and worked on [a foreclosure consultant bill], and got a nice handful of amendments to make a better bill that is still very consumer-friendly, but still workable for the industry,” Grant said. “I think [that was] a nice win for the industry. You can see that when you compare it to other foreclosure consultant bills. It’s clearly a better bill.”
Although he keeps an eye on federal legislation as well, Grant said he believes that the states are where NARHRI needs to focus its attention for the time being. He said he believes it is particularly important in light of the way legislation in one state can ultimately affect legislation in the rest of the country.
“It’s a multi-state fight. It’s not just about protecting one particular state,” Grant said. “Take Ohio. They’ve got a great state association with very effective lobbying. But…if the 40 other states have a piece of legislation detrimental to this industry, Ohio will fall and it will become a national bill. And that’s what we’re trying to stop.”
As part of its efforts to advocate for investors, the association has put together the Community Appreciation and Rehabilitation Services program, also known as NARHRI CARES. The program organizes visits to areas that have been revitalized by investors, bringing along key lawmakers, attorneys general and media. The goal of the program is to showcase the positive effect that investment can have on communities and offer new perspectives to legislators who may have negative opinions of the industry.
Though it is still a relatively young organization, Grant said he has high expectations for NARHRI. He said he hopes someday NARHRI will be the “gold standard” for conscientious investors in this country and that he has plans for expansion in the near future.
“We’re going to be active in at least 12 states [in 2008]. We’re hoping to get that up to about 15 or 16 before we head into the new year,” Grant said. “Right now we have a regional lobbyist in the South and in the Midwest. We’re hoping to get a Northern firm on board soon. And one other important item is that we’re hoping to get a liaison to the attorneys general on board as well.”
Grant said he believes there are also benefits for members located in states outside of NARHRI’s range.
NARHRI tracks legislation in all 50 states, regardless of whether the organization has a lobbyist in the region. All members have access to the information contained in tracking reports. And the more support that NARHRI receives from investors across the country, the faster it will be able to expand into more regions.
“If everyone had the attitude, ‘Well, they’re not in our state yet with a lobbyist, so I’m not going to support them,’ this thing never would have taken off in the first place. So, part of building this is to get more and more people involved. And as that happens, we’ll be able to be in a lot more states,” Grant said.
Grant said he knows that some investors may be skeptical about joining an organization that does not yet lobby in their state, but he said NARHRI can be valuable to them, too.
“This is your industry,” he said. “And if you’re serious about it you’ll back an association that has gotten results for this industry and that is dedicated to…defending the rights of investors around the country.”