When you are a field inspector, the importance of having a road hazard kit in your car cannot be stressed enough. We all ignore suggestions to keep road hazard items in our car for emergencies, but when you are in this business and traveling all day long, you should not underestimate the need for safety on the road.
QUESTION: How much money can I make working as a property preservation contractor?
ANSWER: Your success as a property preservation contractor is directly related to your dedication to continually educating yourself about REO construction issues as well as how to properly manage cash flow. From our own experience, the sky is truly the limit. Our business has grown at a rate of 100% each year since we first started working in this specialty over 5 years ago. This is definitely a great opportunity to ride the wave of a current trend. But you must understand that property preservation is a business and just like any other business, there are many different working parts involved, all of which you are going to have to learn and master. So before you get too excited, you must understand that even though there is a ton of work available in this niche construction business, it takes hard work and the willingness to educate yourself on a continuous basis. And don’t forget the statistics about how more than 90% of new construction businesses go out of business within the first 5 years.
I’ve been meaning to write this article for some time now because of how the Property Preservation forums always seem so congested with people complaining about how some national property preservation company did that and this other national company did this. Most industry forums are a place where newbies can go to get their questions answered by the industry veterans. Unfortunately, that is not the case when it comes to the Property Preservation industry.
In the last few years more and more of my income was generated because I figured out how to profit from properties with mold damages.
Originally I set up this website as a resource for my subcontractors so they could keep up to date on all the complex situations and constant changes in the Property Preservation industry. At the time, I couldn’t find any decent quality informational sites for Property Preservation contractors and the few sites that did exist were not very helpful since they were created for the large national servicing companies. Even though I was a complete novice at building websites, I made the decision to figure out a way to make it happen with the resources that were available.
One of my pet peeves are all the websites who write about this industry and give advice without actually knowing what they’re talking about.
Here’s how you need to go about getting Property Preservation repair work from the large companies who control most of the industry’s work.
As business owners, it is our job to do whatever we have to do in order to make our client company’s employee’s job easier. Give your client(s) the services they are paying you for, every single time. Do this and you will be instantly doing better than 90% of your competitors. Most of your competitors change the quality of their service based on unrelated problems in their life — problems that their clients should never even be hearing about.
If you work as a Property Preservation vendor then you should already know how important it is to take good photos to document your work orders, if you want to get paid by your clients. And after you take the photos, you have to store them somewhere for at least a couple years in case you have one of your work orders get audited later on down the road. It’s also nice to be able to access the photos from any of your computers and/or smart phones. And lastly, you need a way to transfer photos back and forth to your crew members because emailing zip folders is way too time consuming.
Property Preservation is a term used to refer to the mortgage field service industry. Some people will tell you that it also refers to foreclosure cleaning but those of us actively working in this industry know that there’s so much more involved than cleaning.
We’ve all been hearing about how much money everyone can make by starting a Property Preservation business and all we need is a broom and some cleaning supplies and that’s it.
Well folks, I have been self-employed for 20+ years and the last 10 years I have been running a Property Preservation and REO Rehab company. And I have to say that I have made more money in the past 2-3 years than I did in the previous 12-13 years combined.
Separating Facts From Opinions
During your research, you will surely encounter negative comments about most if not all of these companies. It is not wise to believe every single negative comment that you hear about a particular National Property Preservation Company. Educate yourself with factual information and not opinions. You will be able to form your own educated opinion after you conduct factual research. Think about it. There’s absolutely no way for you to know what is true or not based on another person’s opinion without making assumptions;… unless, of course, you live by the concept of “accurate thinking” and you also refuse to ever make or accept excuses. Those qualities only come along after several years of business ownership experience.
Pressure testing plumbing supply lines is one of the most difficult property preservation repairs to verify. Unless, of course, you redo every single pressure test right after your crew or subcontractor gets finished. It amazes me that most licensed plumbers either don’t know how to conduct a pressure test to the plumbing supply lines using an air compressor or will do it wrong. Well a few years ago out of sheer frustration, I designed a quick little set of instructions with a checklist that that has been working ever since. What’s even better is that these instructions are so very straight and to the point that I can now send someone who doesn’t normally do plumbing work for me to conduct a pressure test and I will have all the correct photos and end result that I was looking for, every single time.
An effective Property Preservation Business Website should be good-looking and it must also show up when and where their potential clients are looking for this type of business in their coverage area. Most of the Property Preservation business owners currently operating right now either do not have a website or the website they have looks like it was “slapped” together without any thought or strategy. Building a functional website for your Property Preservation Company is not something that most small business owners should be attempting to do themselves. I mean, would you hire a doctor to fix a plumbing leak? Of course you wouldn’t. it is a good idea to know some of the common web design mistakes many small business owners make.
The Law Of Income: You Get Paid In Direct Proportion To The Amount Of VALUE You Deliver To Your Marketplace Your financial success is directly related to the size of the problem you solve for other people (solve BIG problems and you’ll make BIG money). You will …
- “Your financial success is directly related to the size of the problem you solve for other people (solve BIG problems and you’ll make BIG money).” -Brian Tracy
- “Most people give up just when they’re about to achieve success. They quit on the one yard line. They give up at the last minute of the game, one foot from a winning touchdown.” -Ross Perot, billionaire
- “Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don’t quit.” -Conrad Hilton
- “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” -Bill Gates
The Elite Vendor
An elite vendor identifies his weaknesses and works his ass off, twice as hard, until he improves in those areas. He realizes that it will be difficult to improve these areas at the beginning. But he also knows that if he keeps working on bettering his weaknesses, eventually he will.
The elite vendor understands that he doesn’t have to be superman to keep his clients happy. All he has to do is his job, every single time. And when he makes a mistake or something goes awry, his clients are willing to forgive him, because they have been watching him and they know that he gave it his best, just like he has been doing for them since the first day he started.
The elite vendor’s clients treat him with respect and pay him well, because they know that he is a valuable asset to their company who constantly comes through for them. They know they can call him and ask for his expertise about the difficult scenarios that arise on a daily basis. And he welcomes each and every call as it strengthens his position as the client’s “go to guy”.
I just stumbled onto a rant I posted to an online property preservation forum a few years ago. It’s a little rough around the edges and I’m sure some will find it quite controversial.
One of my new year’s resolutions for 2014 is to not censor myself so much when deciding what content to add to my websites. This has been a real problem for me. In fact, I have over 20 blog posts that I previously wrote but have not yet published on this blog because I felt they were too controversial and I didn’t want to ruffle anyone’s feathers.
I finally decided to publish this old forum rant for all the real entrepreneurs who are curious to hear a different perspective on the property preservation industry, from someone who has actually achieved a certain level of success.
This is the very first Vendor Chargeback Case Study and I must admit it’s a little “rough around the edges”. My plan is to add a new one to this blog once every week or two, with each one analyzing a different aspect of the Vendor Chargeback. I recently decided to create this series as an educational resource for all serious-minded REO Vendors who are smart enough to know that most of the forum threads about this subject are angry opinions that were posted by ex-Property Preservation Contractors who refuse to consider the idea that they may have actually been deserving of the chargeback.
The Vendor Chargeback Case Study series of articles will provide an un-biased “inside look” into the details of actual chargebacks to learn the reality of why they happen (it’s rarely what the ex-vendor says it is), how to minimize the chances of being charged-back and what can a contractor do if/ when they receive a chargeback. It’s simply a way of learning from the mistakes of others.
For a property to be considered to be “In Convey Condition” in the Property Preservation Industry, there cannot be any roof leaks.
Locating the cause of an active roof leak is not as difficult as some people make it out to be. Most leaks that are not caused by some type of storm damage (like missing shingles), usually occur because of deteriorated, missing or incorrectly installed roofing materials and/or flashing.
Before you can diagnose a roof leak, you must know what kind of evidence you are looking for. Typically, a leaking roof starts off without anyone even noticing. But over time, the ceiling or wall located directly below the leak will start to appear discolored. The discoloration from active water intrusion will look different from the general discoloration you might have seen in older houses or in homes where a heavy smoker lived. Left unattended, this minor discoloration will quickly turn into an entire section of drywall or plaster that will begin sagging, flaking off or even falling onto the ground.
I once hired a roofer, whom I had never met before, to complete an out of town roof replacement job I received from one of my Property Preservation clients. The work order was for a property on Knox Street, which was approximately 4 hours away. You’ll see the importance of the street name after the next couple paragraphs.
I found this person on the internet and eventually chose him because his advertisement was very well written (much more so than any of the other ones I had reviewed that day). Plus, he was adamant about using his 8 page contractor agreement (to protect both of us, he said) which was also written very well and after reading it I could see that it did not favor either party. Lastly, when I asked him about his “preferred payment schedule”, like I do with all potential subcontractors, he replied that he prefers 50% deposit with the 50% balance to be payed upon completion, which I feel is a fair arrangement for 2 people who have never worked together before.
What I’m about to share with you is one of the best kept secrets for measuring residential roofing jobs without your feet leaving the ground. If you are not the owner of a residential roofing company then you most likely haven’t heard of this before. This was taught to me, several years ago, by one of my roofing subcontractors. It is a super-simple way to quickly and safely measure the size of just about any style of asphalt shingle roof. Did I mention that it is highly accurate, as well?
The first technique is referred to as the “Shingle Count” Method, which is used for estimating the measurements of all rectangular-shaped sections of a roof.
“I have been working with the XYZ Property Preservation Company for 3 months and they currently owe me $1,300. Does anyone have any ideas how I can get paid?”
I do not spend very much time perusing Property Preservation industry forums. There is far too much negative talk drowning out the few tidbits of helpful information that may or may not exist. Many of the “client bashing” threads would not exist if the vendors who feed into them understood one of the cardinal rules of running a Property Preservation business. Knowing and understanding this rule is one of the most important differences between the REO vendors who are finding success and the ones who don’t.
“He Who Holds The Gold Makes The Rules”
Let me start by saying that this rule has absolutely nothing to do with the amount of “gold” or the industry involved. This lesson is much more simple than that.
There are currently 3 different types of vendors who are actively being recruited to complete work within the Property Preservation Industry.
- Inspection Vendor
- Maintenance Vendor
- Repair Vendor
Here is a brief overview of what is expected from each of these 3 types of vendors.
As some of you may know, I have been running a fast growing Property Preservation repair business since 2007 that does approx $2 million dollars worth of Property Preservation repair work per year. Our office/ management work is efficiently taken care of by 1 full time and 2 part time employees and then we outsource 100% of all the actual repair work to our network of subcontractors.
This is not the management system I initially started out with. Like most small construction businesses, I was wearing several hats – hell, when I first started I wore ALL the hats: owner-operator/ accountant/ inspector/ estimator/ contractor/ subcontractor liaison/ babysitter/ etc.