HUD And REO Property Preservation

WarnerConstInc.

I go through local raltors that deal directly with the banks. Some of those they could not pay me enough money to clean out.

green envy

i have been working with safeguard for the past couple of weeks. so far so good, i haven't received my first check yet but i knew that there was a 4-6 week wait due to office politics and making sure u didn't screw up to bad. my friend and mentor said they are good companies to start and learn with. so good luck.

__________________
Chris Parham
Green Envy

CaliJoe

Having worked for SafeGuard before I can tell you they are one of the most tedious and low paying companies to work for. Get familiar with the HUD allowables, and take 30% off of that. Safeguard's "fee" is between 20-30% of the allowable. See if that is worth your time and effort.

Honestly, the only reason it worked for us was because we treated that type of work as a loss leader to get the construction work from them.

Expect long hours of driving giving free bids, 2nd bids, updating lots and lots of pictures and lots and lots of phone calls.

Similar process with First American or any of the other nationals.

a1propertyclean

CaliJoe ~

I agree with you regarding Safeguard to some degree. You won't work at a total loss with Safeguard but you will be busting your butt for less than you will until you get the bigger jobs.

I terminated my relationship with Safeguard last March due to Chris' line about "office politics". I give an awful lot to the properties we service but I refuse to bend over and walk backwards for anyone, which is the way the relationship ended with Safeguard.

It is, however, an excellent company to start with and, if you can work with Safeguard, you'll find out you can work with anyone after that.

They're a great company to get your feet wet with and you'll find out soon enough whether or not you're cut out to be in the industry.

Just so it's clear to everyone............. I'm not bad-mouthing Safeguard. There are some wonderful people working there but, like any other company, they have their strong points and they have their weak ones.

My post about Safeguard is based on MY experience and has more to do with management changes than anything else. I have no regrets about terminating them and I have far too much work now to be looking backward and wondering if I made a mistake. I didn't and I'm far happier with what I have going on now.

I have subcontractors in several other states and have a hands-on training program set up here in California that many have participated in. It seems to be working so far and no one leaves here without understanding the guidelines and client requirements. The subcontractors who train with me are also included in my marketing program and I send referrals and work their way when agents, brokers, and asset management companies contact me.

Linda

__________________
Linda @ All REO Preservation
http://allreopreservation.com
allreo.vendor.review@gmail.com [experienced vendors only - please list state and counties if you're looking for work]

CaliJoe

Thanks Linda. I didn't mean at all to make safeguard sound horrible, I too got started with them and worked for many many years, and worked well with Vince and Michael over there. Just making sure that people that are looking to get involved with them know what to expect.

I had actually left the preservation business completely to start buying and remodeling, but with the economic downturn I am working on rekindling some of those relationships. I am going the Realtor office and small bank route this time around though, trying to minimize the work that I rely on from the big nationals. Any tips that worked for you?

a1propertyclean

CaliJoe ~

I didn't mean to imply you were saying anything bad. Sorry if there was a misunderstanding.

The only thing I can really tell you is to just get out and make contacts. Pop a business card under the door of each house that appears to be vacant and in need of cleaning up.

I'm very fortunate that there's a lot of work in California. [Unfortunate for the previous homeowners, though, I'm afraid. So I hope no one took that wrong.]

Most agents and brokers don't know who to contact when they get their first REO property. Make yourself known and keep a supply of business cards with you all the time.

When I started my business, I never intended to go nationwide. All I wanted was enough work to stay busy and pay the bills, then have a little left over to set aside for whatever.

Now I'm swamped with contacts and requests from both sides of the industry. Agents & brokers on one side and subcontractors on the other.

I've been putting in 7 days a week, 14 to 18 hours per day for months. I now have 7 employees, just over a dozen subcontractors between all the states I cover, and a new sub flying in for training Sunday night.

I got way more than I ever dreamed of, or bargained for, in this industry. I'm certainly not rich, however, because the money keeps going out for newer and better equipment. And payroll gets paid before the money comes in so there's still something of a deficit in some areas. But, for the most part, it's working. I've been able to put 7 unemployed people to work and my bills are paid so I'm happy.

Now I just need to find a way to get some time off.

Linda


[As a side note, my daughter informed me just a moment ago that we can't hire anymore employees because she just used the last 2 folders.]

__________________
Linda @ All REO Preservation
http://allreopreservation.com
allreo.vendor.review@gmail.com [experienced vendors only - please list state and counties if you're looking for work]

a1propertyclean

Just wanted to give everyone an update here. I've had such an overwhelming response to my posts regarding preservation services that I can't even find time to answer all the e-mails. I apologize to those of you who I haven't contacted.

I'm going on vacation [finally!] the last week of August. I have a great office staff and my field crews can't be beat. But I'll still have a lot to catch up on when I get back so it will be the second week in September when I'll start concentrating on your responses.

In addition to my current preservation company, I just went into a partnership with another well-established subcontractor. Our client base is going to be enormous and we're going ALL nationwide.

If anyone wants to be a part of the subcontractor crew for the partnership, please send me a legible e-mail with your STATE ONLY in the subject line. Nothing else, just the state.

These are the things I'm going to need from anyone who's interested:

• Counties you're willing to service, including a list of zip codes with cities;
• List of services you can perform;
• Photos of 2 projects you've done, including all before & after photos [resized, please, and in a zip file format];
• Name, address, company e-mail address, and 2 contact phone numbers for you;
• Your availability for 5 days of preservation, photo, and guideline training at your expense in either San Diego or Riverside, California;
• Lastly, a website address [if you have one] and how long you've been doing preservation work. [BTW ~ it's okay if you're new]

I can't promise we'll be able to get back with everyone right away because the interview process can take awhile. We'll be interviewing new clients and reviewing their fee schedules at the same time.

There is also no guarantee that there will be work available in your area, no matter how much we market our collective services. We've only come across dry areas a couple of time, though.

Due to the time I have to be away from the office for the training and away from my other crews, we are currently revamping my current training program, and it will no longer be free. It will be offered at a flat rate [including motel, meals, and materials] . Until it's in place, however, the only cost to you will be your own expenses.

So let me know if you're interested and I'll start contacting people the 2nd week of September. You can contact the partnership at a.plus.propertypreservation@gmail.com

Thanks!

Linda

__________________
Linda @ All REO Preservation
http://allreopreservation.com
allreo.vendor.review@gmail.com [experienced vendors only - please list state and counties if you're looking for work]

CompleteClean

Hi Linda,

I recently started a Trash Out Preservation company myself, and yes, for those of you considering starting the business, the out of pocket is important at first while waiting for the banks to process payments. I am still learning, and hoping I will be able to make this business as lucrative as yours. It is growing and I am encouraged to receive inquiries almost daily, after advertising for just over three months now.

A tip for those starting out.. check out the HUD website, which has some tips on pricing limits and boarding procedures!

Good luck to you and your companies! Cheers!

Lea

We Fix Houses

I couldn't quite find the information you refer too through the hud.gov website. Can you provide a link or example ?

Thanks
Steve

CompleteClean

I wanted to thank Linda for the encouragement on this post and accidentally put it on another post.

I recently started a Trash-Out Property Preservation company a few months ago. It is hard work as Linda described, and payments do come in slowly. I am working out the kinks, and focusing on the Los Angeles metro and beach vicinities. If you venture out too far, the time and gas adds up and becomes much too costly unless you have a local crew in that area.

I hope to one day expand the business as Linda has, as I am an engineer and would love to do some future construction design for some of these realtors who would like to see a higher return on their listings. But, many of these REO's are being turned over pretty quickly just to get them off the market, as-is. Hopefully as the real estate market improves, so will the condition in which these homes are sold..

I am pleased that there is a niche for the preservation specialist, but I am concerned that there are so many of them, meaning many people are losing their homes. In creating a new business, I'm hoping to also create new opportunities for people who need jobs and eventually want to purchase their own homes. There are so many things I'd like to accomplish with this new venture, that will help others as well.

Thank you Linda!

Lea

CompleteClean

[quote=We Fix Houses;480894]I couldn't quite find the information you refer too through the hud.gov website. Can you provide a link or example ?

Hi Steve,

I haven't made 15 posts yet to be able provide a link on this forum. Please email me, and I will email you those links.. info@completecleaningsystem.biz

a1propertyclean

Lea ~

You are SO very welcome for the encouragement.

I wanted to address your comment about there being so many of them.

While I know you were talking about foreclosures, I'd like to add that the industry is actually becoming saturated with preservation contractors in major metropolitan areas.

If anyone is considering a startup [or already has], you may find a severe shortage of work coming your way due to those who established their presence in the market before you.

Also, one of the things we're ALL coming up against in the field are the inexperienced guys without any type of organized format in which they can legally do business, have no general liability insurance, and hire illegal labor to put more money in their pockets.

Not only do they cut their pricing and take work away from legitimate businesses, they end up [in a lot of cases] doing substandard work with no legal recourse for the banks and brokers when they have to hire another preservation company to do the work.

Eventually, those that are working "under the table" will be caught by the IRS, who routinely audits bank accounts in order to locate people that are doing this.

Banks and brokers ALL require a W-9 and/or a business license, which is helping to stem the flow of work to those who operate "under the table". The SSA gets a copy of their 1099 at the end of the year and, while they may be backed up now, they won't be shortly. From what I understand, they have many more people working on this very problem right now, thanks to this new industry and its rapid growth.

These are just a couple of things to be aware of anyway. We all need to stay informed the best we can so everyone can run a nice, clean operation.

Good luck to all.

Linda

__________________
Linda @ All REO Preservation
http://allreopreservation.com
allreo.vendor.review@gmail.com [experienced vendors only - please list state and counties if you're looking for work]

boman47k

http://www.cubicyard.us/state-guide-1/

CompleteClean

Thank you Linda- I'm so glad you addressed the oversaturation. After going through all the avenues I needed to become properly insured (I didn't want to do anything until I knew insurance was in place), and putting in my first few bids, which were quite low to obtain the business, I found that I was still being outbid. Banks are now giving outrageously small limits on the reimbursement amounts.

For example, a home with dry branches and leaves throughout the backyard needed a thorough yard cleanup.. The bank would only approve $45 for this. What does that cover? Gas, and half an hour of work? They forget there are dumping fees, more than 1/2 hour of labor costs, and materials, such as trash bags, that are used.

Many times realtors will request a trash out without having inspected the property themselves, so, my question is, as I'd like to be prepared for this since I've been getting requests in areas that may be questionable- what if you arrive at a clean out and find that it was being used for illegal activity, such as drug production and you find parafinalia throughout. How would you handle this in a legal and safe manner? I can't seem to find any information about this.

Thank you!

a1propertyclean

Lea ~

The banks are willing to pay what the vendor is willing to accept. If there's someone who is willing to do it for 1/2 the price, the banks will go with that vendor, regardless of how good the job is.

We take a great deal of pride in our work and make sure that no detail is overlooked. There are areas where we routinely take care of certain items without charging for them. For instance, unless the shrubs are way overgrown, we just include it in the grass cut so that the yard looks like it's being maintained by a professional.

The other guys will just zip in, cut the grass, then leave. If you stick to your pricing and only bend when you feel it's in your best interest in order to do so, then you'll eventually give your reputation as a professional the boost it needs and make the kind of money you should.

I have certain clients that give me a lot of work so I bend and flex as needed. So far, not a single one of them has taken advantage of me and I'm still making a profit.

Every once in a while I get a loser job but it's usually when the photos from the crew or the subcontractors don't show everything I need to bid. In that case, I stick to my estimate and get the job done, then go on to the next one without giving it another thought. Honoring a contract is a big thing to me.

Moving on to your next issue actually brings up 3 issues, the first one is just advice.

1. If you receive a request to estimate a trashout [or any other service, including recurring grass cuts] ALWAYS go to the property and take pictures. Never rely on clients' photos to bid the project. They don't see the same things we do and may not get the photos we need.

2. I have several clients that can't get out to the properties fast enough because they receive a lot of listings. They send me a lock change order and know that they can rely on MY photos to show them everything. Again, they need to see what you see. I always send a courtesy estimate for everything I see that needs taken care of and include notes on broken or missing items.

3. If you go to a property and find evidence of drug activity or other illegal goings-on, contact the client immediately and make them aware. In my case, I get as many photos as I can [as quickly as I can], then get out. There's always the possibility that, even though it's not occupied when you get there, people could be on their way back to the house. I think the police have an anonymous hotline you can call to report what you've seen.

Here's something else for everyone to be aware of. There are MANY new asset management companies who will accept you as a vendor, then find ways to refuse or reduce payments for services you've completed. There are others who will go under as fast as they start up.

And, thanks to the oversaturation, ALL of the asset management companies have plenty of vendors to choose from. So they can hire you, refuse to pay you, then move on to the next "victim" anytime they like. I've already been burned a couple of times and fired one of the asset management companies last March.

So, for those thinking about getting started just be sure you think about what you're getting into very carefully. Not everyone can weather some of the storms that can whip up without warning.

Linda

__________________
Linda @ All REO Preservation
http://allreopreservation.com
allreo.vendor.review@gmail.com [experienced vendors only - please list state and counties if you're looking for work]

We Fix Houses

Be sure you know how to lien the house within the statutory time frame to insure payment. You should be paid prior 90 - 120 days to avoid this.

Steve

a1propertyclean

Excellent advice on knowing how to file prelims in order to protect yourself. The asset management companies, however, will NOT give up the information needed to follow through without a fight.

One thing to consider regarding liens is that your work could be cut way back due to prelims being filed. No one likes to think about the possibility of liens being filed and legitimate companies don't have the time to keep up with them anymore than you do, if you're really busy.

I've got invoices on the books dating back 6 months from an asset management company right now whose system had a breakdown. I've lost my rights to lien but can still cause the AM to have to come all the way to California to go to small claims court if I feel they're jerking me around.

I'm working on the old unpaid invoices right now and, hopefully, won't have to go that route.

Time will tell.

Linda

__________________
Linda @ All REO Preservation
http://allreopreservation.com
allreo.vendor.review@gmail.com [experienced vendors only - please list state and counties if you're looking for work]

Ryan Harter

I do property preservation in california. I just got a property that has a old single wide trailor in the back yard that needs to go, any ideas on how to legaly remove this. The only thing I can come up with is bidding the time and scrapping it on the property and dumping it at the dump and recycling whatever I can out of it, but then im stuck with the frame. Any feed back would be appreciated.

Also anyone know the proper way to remove cars. I lost a bid because the bank wanted someone with lein sale/towing capabilities, I'm somewhat new to this and didnt quite understand. I was going to have a scrap company come and tow the car.
Thanks for your time.

a1propertyclean

Ryan ~

Where in California are you located? Every area and every bank has different ways of doing things. If you want, e-mail me and I'll do my best to help you out.

Linda

__________________
Linda @ All REO Preservation
http://allreopreservation.com
allreo.vendor.review@gmail.com [experienced vendors only - please list state and counties if you're looking for work]

a1propertyclean

BTW ~ I'm currently looking for a reliable preservation company in Placerville, California. Work will include all areas within a 50 mile radius of Placerville as well.

Contact me at allreopreservation@gmail.com and put "Placerville, CA" in the subject line so I can get back with you quicker.

Thanks!

Linda

__________________
Linda @ All REO Preservation
http://allreopreservation.com
allreo.vendor.review@gmail.com [experienced vendors only - please list state and counties if you're looking for work]