# Need some advice for new startup company



## propresmd (Sep 19, 2013)

I need some advice with my company I just started. I've been doing pre and reo working for another company for about a year and decided to go out on my own. Applied to Cyprexx and it seems like I'm getting the bait and switch with pricing. They promised good money through the application process not to mention they are taking 9% off for not having workman's comp. They then offered me $15 a cuy for trash-outs I was getting $20 a cuy when I worked for my previous employer. When I explained that to them they bumped me up to $18. I see on the Fannie Mae matrix it pays $40. I realize that they need to make money too but in all honesty what is a fair price. Is everything in this business like this.

I am working in the Maryland area. Anyone have any advice on other company's to do work for?


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## LAND (Mar 4, 2013)

yep..it's all over this industry..


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## probog (Oct 2, 2012)

Quit. Now.


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## Craigslist Hack (Jun 14, 2012)

DO NOT START A COMPANY IN THIS INDUSTRY!!!!

If you want to own a small preservation company buy a LARGE one and wait!!!!:whistling2::whistling2::whistling2:


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## bigdaddy (Mar 3, 2013)

Craigslist Hack said:


> DO NOT START A COMPANY IN THIS INDUSTRY!!!!
> 
> If you want to own a small preservation company buy a LARGE one and wait!!!!:whistling2::whistling2::whistling2:


NOT TRUE!!

Why is everyone always so negative around here??
Instead of saying "Do not start a company in this industry!!!" 
why not say "Don't sign up with a national company, contact local agents instead!!!"

Propresmd, if you have already been working for someone else then you at least know something about this industry. Freddie Mac and Wells Fargo both do ALL of thier REO via local agents. Go to their websites and put in the counties that you cover and find every local agent and contact them. You may not get work right away but even if it only trickles in for a while you will still be WAY better off then if you worked for cypress, safeguard, etc...

I just got my winterization list today, 142 properties total and I charge $275 for Freddie Mac and $250 for Wells Fargo! 

If you are an actual contractor that knows how to make repairs and not just cut grass and haul trash, there is even more money to be made as a repair contractor. We are working on 4 jobs right now for $29K, $28K, $45K and $182K, all major repair jobs. Freddie and Wells are always looking for repair contractors. 

So please stop saying quit, its over, don't do it!

There is PLENTY of money to be made in this industry if you actually apply yourself instead of signing up for every new middleman that pops up!

GO DIRECT


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## Craigslist Hack (Jun 14, 2012)

bigdaddy said:


> NOT TRUE!!
> 
> Why is everyone always so negative around here??
> Instead of saying "Do not start a company in this industry!!!"
> ...


This is not the case here! We do Wells Fargo REO through LPS and Freddie Mac is done through a company called Webfair. I agree with your overall concept but i am telling you that our area is different. You have obviously found a sweet spot. I was offered an opportunity to do Freddie rehabs in Illinois and when I looked at the program it honestly sucked. I was going to have to pay for everything and wait to be reimbursed but do it their way. We would have thousands in the float at all times and they would control when we were paid and what we did.

The reason i advise to stay out of this industry is you can take the exact same skillset to the private sector buy your own property for less than you would have in the float and control your destiny.

You and I have hashed this out before and there is NO DOUBT that you have a sweet gig. My area is way to rural and you can buy properties in my town for nothing all day long. I got 3 from last years tax sale this week. One the city tore down so now I will be trying to recover my money from them. The other two I paid 14,000 total for both. When I rehab them I will put in about 7 and sell for 25k-32k not bad and i dont have to send a pic to anyone or wait on a pay check or talk to a broker.


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## bigdaddy (Mar 3, 2013)

See I just don't get that, I speak with asset managers from Freddie and Wells all the time and every now and then I bring up the topic of getting work from the agents and I am always told that the brokers handle it nationwide. Anyway, the OP is from MD and I know for a FACT that the brokers handle MD for both Freddie and Wells.

No doubt that flipping your own properties is a great business, that's how I started my business and still always have 1 or 2 going at any given time.

However, the topic was about the property preservation business not being profitable. I'm just saying that it can be very profitable if you avoid the middle men.


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## bigdaddy (Mar 3, 2013)

Craigslist Hack said:


> I got 3 from last years tax sale this week. One the city tore down so now I will be trying to recover my money from them. The other two I paid 14,000 total for both. When I rehab them I will put in about 7 and sell for 25k-32k not bad and i dont have to send a pic to anyone or wait on a pay check or talk to a broker.


I have never bought from a tax sale before, never really researched it thoroughly. However I remember reading something about the previous owner has a year to reclaim the property and pay the back tax? Is this correct? Is that why you can get them so cheap? That's awesome that the city tore it down, lol I would charge them full ARV on that one!


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## browneyedgirl (May 17, 2013)

bigdaddy said:


> NOT TRUE!!
> 
> Why is everyone always so negative around here??
> Instead of saying "Do not start a company in this industry!!!"
> ...


 Do you have the website info so that we can check this out


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## Craigslist Hack (Jun 14, 2012)

bigdaddy said:


> I have never bought from a tax sale before, never really researched it thoroughly. However I remember reading something about the previous owner has a year to reclaim the property and pay the back tax? Is this correct? Is that why you can get them so cheap? That's awesome that the city tore it down, lol I would charge them full ARV on that one!



Actually I am still learning but with the program we have we WANT them to redeem. If they do we get 10% guaranteed ROI and some additional monies as well but it's not much. I can buy regular properties in my area pretty cheap although the market is recovering. The key here is if you want to raise capital it's very easy to attract investors if you guarantee them an 8% ROI backed by the 100% security. Then we never bid more than half of our BPO on the property so if we get stuck with it we can't lose (unless the city tears it down). Then in this case out of the 7 we bought last year 4 redeemed and 3 did not. I can double my money as they sit, flip them, or even keep them as income properties. It's a sweet program thus far but I am by no means an expert. I am green but I think that is why I like it. It's a new challenge and it has me thinking a year out which is foreign to a P&P guy.


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## Craigslist Hack (Jun 14, 2012)

browneyedgirl said:


> Do you have the website info so that we can check this out


two or three of my brokers sent me this.

 
*May 22, 2013 *
*HomeSteps is Seeking High Quality Repair Contractors*
Attention: HomeSteps Listing Brokers and Vendors 
As you know, HomeSteps has increased our focus on repairing Freddie Mac’s REO properties in support of our goal to preserve local property values, support stabilization of communities and sell to owner occupants.
To support this effort and ensure that we are able to complete capital repairs to HomeSteps standards in a timely manner, we are expanding our network of repair contractors. *Vendor Management is asking for your assistance in identifying and recommending repair contractors to work with us. *
Please ask repair contractors interested in working with HomeSteps to follow these steps:


Go to www.HomeSteps.com.
Click on *Working with HomeSteps* on the left menu.
Click on *Prospective Vendors*.
 
Review our minimum requirements and current list of areas where we have immediate opportunities. 
Complete the *General Contractor Application* and send it to [email protected]. 
 We appreciate your assistance in helping us build a high quality team to achieve our mutual goal in Making Home Possible.
Thank you.


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## Zuse (Nov 17, 2012)

Craigslist Hack said:


> two or three of my brokers sent me this.
> 
> 
> *May 22, 2013 *
> ...


I have a buddy that does Homesteps here, he covers 4 county's for them, what he tells me is that their is no pictures involved and pay is pretty quick.
The brokers sign off on all the work done and Homesteps makes all the prices with a sign off by the broker, no bidding at all. he has been doing this for yrs with them.


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## BPWY (Apr 12, 2012)

bigdaddy said:


> However, the topic was about the property preservation business not being profitable. I'm just saying that it can be very profitable if you avoid the middle men.





The strictly P&P model of doing lock changes, wints, grass cuts and trash outs is pretty much the way its been billed is a loosing proposition in many areas. 


How ever what you are doing is a little different and repair contractors are not really P&P contracts. Sure they might cover some of the same stuff but its not the same.


And yes, location, location, location does have some thing to do with it!!!

Not to mention the fact that contractors such as yourself are not in high demand and once a sweet spot is found many contractors do not leave that niche and leave openings on the table.


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## Craigslist Hack (Jun 14, 2012)

bigdaddy said:


> See I just don't get that, I speak with asset managers from Freddie and Wells all the time and every now and then I bring up the topic of getting work from the agents and I am always told that the brokers handle it nationwide. Anyway, the OP is from MD and I know for a FACT that the brokers handle MD for both Freddie and Wells.
> 
> No doubt that flipping your own properties is a great business, that's how I started my business and still always have 1 or 2 going at any given time.
> 
> However, the topic was about the property preservation business not being profitable. I'm just saying that it can be very profitable if you avoid the middle men.


That is the weird part here. A broker does in fact handle the property but they HAVE to go through Webfair on Freddie Mac who then hires a contractor and takes nearly 75% of the money. On Wells I don't always know that a broker is even involved I just see their names on the work orders but there is absolutely ZERO communication between us and them.


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## LAND (Mar 4, 2013)

Anyone know of anything in S FL?


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## GaReops (Aug 7, 2012)

I believe there is still money to be made in this industry (like 5 years ago? no). Keep overhead as low as you can, 0% Q.C's blah blah there is still a little money to be made.


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## bigdaddy (Mar 3, 2013)

BPWY said:


> The strictly P&P model of doing lock changes, wints, grass cuts and trash outs is pretty much the way its been billed is a loosing proposition in many areas.
> 
> 
> How ever what you are doing is a little different and repair contractors are not really P&P contracts. Sure they might cover some of the same stuff but its not the same.
> ...


Even though repairs are the majority of my income, I still do ALLOT of the basic P&P work. I probably have close to 20 agents who I do work for, but the majority of the work comes from 5 or 6 who keep me VERY BUSY. We just had a sheriff sale on Tuesday and my mailbox is filling up for work for tomorrow, so far 9 rekeys and bids for initial services already.

So yeah, even without doing repairs I would still be very busy.


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## Craigslist Hack (Jun 14, 2012)

bigdaddy said:


> Even though repairs are the majority of my income, I still do ALLOT of the basic P&P work. I probably have close to 20 agents who I do work for, but the majority of the work comes from 5 or 6 who keep me VERY BUSY. We just had a sheriff sale on Tuesday and my mailbox is filling up for work for tomorrow, so far 9 rekeys and bids for initial services already.
> 
> So yeah, even without doing repairs I would still be very busy.


I'm pretty established in my market and I'm lucky to get one or two decent broker jobs a week. I don't feel we get out bid or that brokers don't know about us. I think the work just isn't there. 

I wish I had your work but NO WAY I could live where you live! 

I have to say I am jealous though. We see things pretty much the same and what you say makes sense. It's just not the same for all of us. It's cheap to live here and I HATE cities but there are definite advantages to METRO areas.


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## bigdaddy (Mar 3, 2013)

Craigslist Hack said:


> I'm pretty established in my market and I'm lucky to get one or two decent broker jobs a week. I don't feel we get out bid or that brokers don't know about us. I think the work just isn't there.
> 
> I wish I had your work but NO WAY I could live where you live!
> 
> I have to say I am jealous though. We see things pretty much the same and what you say makes sense. It's just not the same for all of us. It's cheap to live here and I HATE cities but there are definite advantages to METRO areas.


Actually I live about 40 miles outside the city, it's nowhere near rural but its not the ghetto ass city. I grew up in the ghetto and was piss poor my whole childhood, got a paper route at 11 years old and started buying my own things like sneakers, bikes, etc.. because my mom couldn't afford to.

When I tell people what I do and that I drive to Philly everyday to work they look at me like im crazy!

I usually try to hit the outskirts and work in a big circle back to my house. It takes about an hour to get to and from the first and last jobs but everything in the middle is literally minutes apart.

I will leave tomorrow at 8am and do 9 rekeys and 5 wints and be back home by 4pm.

So yeah, living close to a big city has its advantages, however I am trying to make the MOST $$$ I can and retire in 8 more years, I am 37 now. When Im done, I am moving far far away from the city!!


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## REOmadness (Jun 8, 2013)

to the op, take your money and time to focus on something other than this biz. Late last year I decided to focus on developing a legit landscape maintenance company and have done a ton better than I ever did dealing with bats and regs. I already had the guys and equipment so it was easy. Took time making calls and bidding on commercial lawn maintenance and haven't looked back.


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## Cleanupman (Nov 23, 2012)

I think it's time for a vacation...
http://aladayllc.com/2013/10/03/pro...ctors-the-need-for-a-vacation-and-solidarity/


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## Craigslist Hack (Jun 14, 2012)

bigdaddy said:


> Actually I live about 40 miles outside the city, it's nowhere near rural but its not the ghetto ass city. I grew up in the ghetto and was piss poor my whole childhood, got a paper route at 11 years old and started buying my own things like sneakers, bikes, etc.. because my mom couldn't afford to.
> 
> When I tell people what I do and that I drive to Philly everyday to work they look at me like im crazy!
> 
> ...


I had a guy complaining this morning about his day yesterday. He drove 353 miles and was only able to complete 5 jobs. They were meet 3rd party, grass cuts and property conditions, basically no money. I had to tell him to suck it up! That's the name of the game. 

It's not unusual for me if I am in the field to drive 1250 miles in a week. It's often 45 mins between grass cuts here.


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## BPWY (Apr 12, 2012)

REOmadness said:


> to the op, take your money and time to focus on something other than this biz. Late last year I decided to focus on developing a legit landscape maintenance company and have done a ton better than I ever did dealing with bats and regs. I already had the guys and equipment so it was easy. Took time making calls and bidding on commercial lawn maintenance and haven't looked back.




Thats where its at. 

Same here, plus I work less and make the same if not more money than I ever did doing P&P.


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## BPWY (Apr 12, 2012)

Craigslist Hack said:


> I had a guy complaining this morning about his day yesterday. He drove 353 miles and was only able to complete 5 jobs. They were meet 3rd party, grass cuts and property conditions, basically no money. I had to tell him to suck it up! That's the name of the game.
> 
> It's not unusual for me if I am in the field to drive 1250 miles in a week. It's often 45 mins between grass cuts here.





My busiest P&P year was 40,000 miles on the pickup. 

Now its around 27,000.


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## REOmadness (Jun 8, 2013)

BPWY said:


> Thats where its at.
> 
> Same here, plus I work less and make the same if not more money than I ever did doing P&P.


 I don't work any weekends either. If we do the client understands and pays more.


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