# Why are you still in Property Preservation?



## AaronMcKeehan (May 8, 2015)

After 7 years of Property Preservation work, and getting out due to growing compliance laws, increasing entry costs, decreasing compensation, increased competition, and increasing payment timelines, I was curious to know what reasons people may have for staying in the industry?

There are certainly market cycles in every industry, this industry in particular has a market cycle that is opposite to the standard Macro-Market Cycle. As the economy improves, this industry will destabilize. We are currently in a destabilized period, and if people can make it through this cycle, they may certainly profit from it.

Though, for those that are not diversified companies, and have their meat and potatoes in property preservation, out of curiosity, what has kept you primarily focused on this industry?


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## GTX63 (Apr 12, 2012)

We only do preservation work direct with the client or thru the broker. That is the most effective way to run your own company, using your own structure and guidelines and determining for yourself what you need to bill in order to make a profit and live comfortably.


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## Craigslist Hack (Jun 14, 2012)

GTX63 said:


> We only do preservation work direct with the client or thru the broker. That is the most effective way to run your own company, using your own structure and guidelines and determining for yourself what you need to bill in order to make a profit and live comfortably.


I thought I had something to add but this sums it up. We are focused on inspection repairs and handy man work. This works for private customers, realtors, and direct bank work.


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## SANTYY30 (May 1, 2015)

*so question*

i been trying to deal directly with the banks, but it seems you have to be huge to be able for the bank to even considered you to work directly with them, how come some of you work directly with the bank, i would love to cut the 25% the middle company keeps. we have an normal office 10 employees, about 8 (3 men crew) is it too small for the banks? and we have been in business for 15 years, i mean what else do we need?? thank you.


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## NLPPS (Jan 23, 2013)

*Industry Explanation*

If banks had the model to deal with you, they would then have to deal with and manage 10,000 local contractors.

What I find most interesting, is the most people fail to understand that this industry operates just like most industries. The supply chain is as follows:

Manufacturer - Bank
Distributor - National
Wholesaler - Regional
Retailer - Local Contractor (BOTG)

This is how the vast majority of American industry works whether you're selling shoes, cabinets, hot dogs, or widgets.

If you want in with a large bank, then cover all 50 states (incl. Alaska & Hawaii) and Porto Rico. Best of luck with that one. Small local banks or credit unions might be an option, but they are going to want a one stop shop just like the larger banks, not just a guy that only covers 20 miles from his shop.

Know who you are, crunch the numbers to see if it works with your business model, and establish good healthy long term relationships.

The banks want at most a half dozen distributors and the nationals want a few dozen regional wholesalers (and will accept local retailers when no regionals are available).


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## GTX63 (Apr 12, 2012)

I'll explain why the above description of the preservation industry is flawed.

Property preservation is not similar to the vast portion of American business and the tier analogy above does not apply in this situation. Why?
Because in the real world, even a wholesaler/distributor create and/or supply something. There is a need for what they do, and in most cases they are legally tied in some way to the parent company.
A "national" was designed to be an indepentent entity, in the beginning, that processed bank owned property. They quickly morphed into a distorted and twisted version that neither serves its clients intended purpose not improves the product before it is passed along.
The regional, moreso, is not even close to a wholesaler. Rather, they are little more than a parasite; they create nothing, they produce nothing, they improve nothing and yet they bill for their service and bleed those above and below them in the chain. A regional exists for no other reason than to drink at the trough.
The BOTG, are forced in many ways to run their companies by the dictates of these "middle man" clients and are little more than puppets for hire.
In a capitalistic system, each rung of the ladder is there to succeed. If they cannot then they disappear. Here, the endless supply of contractors continue to sign up to be chewed up and spit out.


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## GTX63 (Apr 12, 2012)

A contractor doesn't need to have contacts with Chase or BOA to do direct work. Gaining work thru local brokers and lenders, insurance agents, property managers is no different than any other contractor trying to build up his base.
Nationals and regionals are NOT the industry; they are little more than carpet baggers.

We do work in 4 states. We don't advertise any coverage areas. We determine the jobs we accept the same as if you called a plumber who had an office 75 miles from you. We make no promises and never agree to take "the bad work to get the good". We have either family, subs that relocated but still do work for us, or satellite offices. It isn't rocket science, but for contractors that have only known the world of safeguard and MCS, it might be hard to grasp. Those that already were contractors before getting into preservation probably know what I am trying to say.
My experience is, based on small towns, that 3 or 4 brokers, a couple lenders, an apartment complex or two and a dribble of private customers should be enough to keep the average four man crew in the black and out of the claws of the scammers/paper contractors working in Ohio, Fl, and their office suites.


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## BRADSConst (Oct 2, 2012)

NLPPS said:


> The banks want at most a half dozen distributors and the nationals want a few dozen regional wholesalers (and will accept local retailers when no regionals are available).


You haven't worked direct have you? The small local banks want the work done, done correctly and most importantly when they need it done. Like the large national chains, they don't have the resources to manage the few properties that they end up with. Find out who they list with and let them know how you will deliver excellence and then follow through.


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## Wannabe (Oct 1, 2012)

Gtx and Brad hit it spot on. My brother-in-law is a bank VP for a small 7 branch bank and he asked 2 weeks ago if I still did cleanouts since they needed help on a few properties. I referred him to a local BROKE P&P guy who he called and did hire. 

I would have done if I still had my CASE skid "helper"..... Hmm


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## BRADSConst (Oct 2, 2012)

Wannabe said:


> I would have done if I still had my CASE skid "helper"..... Hmm


 I'll be thinking of you next week when your CASE skid "helper" removes two concrete patios for me :thumbup:


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## Zuse (Nov 17, 2012)

GTX63 said:


> I'll explain why the above description of the preservation industry is flawed.
> 
> Property preservation is not similar to the vast portion of American business and the tier analogy above does not apply in this situation. Why?
> Because in the real world, even a wholesaler/distributor create and/or supply something. There is a need for what they do, and in most cases they are legally tied in some way to the parent company.
> ...


As usual for the most part GTX nailed it.:thumbup: see the red.

Why am i still doing P&P? Ive started as a 1 man show an morphed into 3 state player, ive got more work than i can do, been working with the 2 same clients for more than 12 yrs or less with. I love what i do, im good at games, I dominate my areas servilely...i work direct and have made some vary close ties with Nationals upper management, i market myself as service provider and fallow through. I love being middle man that stands up to the National for my people, the volume in my states are off the chain and i take advantage of it. Our motto is the competition makes us look good, my people are well trained and stay with me. If a contractor need help, i help. its not unusual for me to be up until late disusing bids or how to do this or that with a contractor. I pick my fights very carefully. 

I do it because i can make money at it, and Ive seen it all too, company's come and go, regionals, nationals, locals and for the most part they all fail for the same reasons. They let the company run them instead of them running the company, that and greed, money makes people lose sight of what they hold most dear. In other word money and greed make people stupid. for the most part a successful company's pass on the wealth to those around them, which in-turns breeds loyalty and honesty and a willingness to go the extra mile. Duh..

Its called reciprocity. 

*"on a serious note" this pic best describes my adventures in the P&P industry. I'm still standing.
*

*







 
*


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## AaronMcKeehan (May 8, 2015)

Zuse said:


> I do it because i can make money at it, and Ive seen it all too, company's come and go, regionals, nationals, locals and for the most part they all fail for the same reasons. They let the company run them instead of them running the company, that and greed, money makes people lose sight of what they hold most dear.


This is a great point. One of keys to any business seems to be the owners ability to operate the company, rather than be enslaved to the company. What often makes a business successful is keeping the entrepreneurial spirit alive that originally started the company. 

On another note, do local lenders, brokers, and banks seem to be reducing their payment for work performed, or have pay rates mostly remained the same?


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## GTX63 (Apr 12, 2012)

No client we currently have sets any prices. All work is invoice off our own rates. For jobslike mowing and wints, we have bumped rates approx 5-10 per cent per year. Worst case is if we had, for example, 12 customers and lost 2, we still make the same money and do less work, the opposite of working for a national.


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## Craigslist Hack (Jun 14, 2012)

GTX63 said:


> No client we currently have sets any prices. All work is invoice off our own rates. For jobslike mowing and wints, we have bumped rates approx 5-10 per cent per year. Worst case is if we had, for example, 12 customers and lost 2, we still make the same money and do less work, the opposite of working for a national.


I agree with this. We are having to get competitive to get work. A Safeguard vendor here has started bidding direct to my realtors and they are used to terrible pricing so I am losing work regularly.


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## newreo (May 30, 2014)

Zuse said:


> As usual for the most part GTX nailed it.:thumbup: see the red.
> 
> Why am i still doing P&P? Ive started as a 1 man show an morphed into 3 state player, ive got more work than i can do, been working with the 2 same clients for more than 12 yrs or less with. I love what i do, im good at games, I dominate my areas servilely...i work direct and have made some vary close ties with Nationals upper management, i market myself as service provider and fallow through. I love being middle man that stands up to the National for my people, the volume in my states are off the chain and i take advantage of it. Our motto is the competition makes us look good, my people are well trained and stay with me. If a contractor need help, i help. its not unusual for me to be up until late disusing bids or how to do this or that with a contractor. I pick my fights very carefully.
> 
> ...


I can't understand why would you do that. Industry (real estate) improved and instead of jumping all these hoops you could make same money working in one state for private customers.


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## Zuse (Nov 17, 2012)

newreo said:


> I can't understand why would you do that. Industry (real estate) improved and instead of jumping all these hoops you could make same money working in one state for private customers.



" These hoops you speak of " can i assume that from my post you have come to the conclusion that's what i do? Jump through the ever changing industry standards that were forced upon me because of lack of regulation and over sight. kinda like what Walmart does to its local suppliers to meet customers price expectations that want and expect low prices when the walk threw the door. Or the local convenience store that sales ciggs and beer, who on average looses 10% profit do to theft or broken products..extra, extra. 

I grew because of i was asked to by the company's i work for, They had a need and i filled it, i new before hand that the profitability was there before i took on more territory. Try to keep in mind that for the P&P industry that not all area are the same, I just happen to be in area that are high growth and have a high demand.

I will use North carolina as an example, do the Nationals have vendors in this state, why yes of course they do, the state is completely saturated with Contractors and more are pouring in everyday. But yet i get asked at least once a month to take over the entire state or can you take on more area or can you do this job or that job for me out of my area. It never ends. Now you have to ask yourself why do they keep asking me? 

Its my model, it works, its my contractor training, its personal, i answer my phone..i spend the time needed to get them up to my speed not the Nationals speed or for that matter their own personal speed. Its mine and mine alone. Period.

Ive hired a total of 4 guys off the this vary website, of those 4 all but 1 has stopped working for their former companies and work solely for me now.

I do what i do because i do make money, i make changes as i see fit and make it work. Has it gotten tougher sense the last housing fall out, why yes it has, does 10% of my profit walk out the door from mistakes, cut bids extra, extra. Cant you name an industry that hasn't had to tighten its belt sense the last housing fallout. 

Their are some here that know me personality and call me quite often as a matter of fact, and can back up what i say. My top earner last year grossed 156k, that's a fact. That's 1 of 18 guys that work for me.

People don't flock to this industry because theirs no money in it like fly's to crap. This industry is vary much an insulated industry of who's who, who you know and what you know. People fail in this industry because of who they choose to work for, and poor planing, and poor execution of those plans. Do you think SAFESCREW would survive if contractors where educated about what and how they treat their contractors.. i think not.


SAFESCREW survives solely do to the fact that the that most that sign up have no clue what their in for, that applies to your average run of the mill Regional to. 

What can i say, I love what i do. The hoops i jump threw are just your normal everyday trials and tribulations all small business owners have to face daily. But its they way i face those trials that differentiate me from the rest.

And yes Ive dwelt amongst the public, realtors, builders, privet customers and as-far as im concerned you can keep them. Seriously have you talked to the average American lately.

And yes i know i put a happy face on and other wise clown show crazy train ride industry, but it is what it is. 

Also keep in mind the profits Ive have made over these many years has allowed me to invest in commercial and residential properties that Ive paid cash for to keep all options open. Diversification! P&P not REO is just part of my income.

Location, Location, Location. I'm in the south and its growing by leaps and bounds. We are being flooded with northerners, and they need a place to stay. Some will make it and and some will not and those that don't i get to service their poor life style choices. 

I guess by now you can tell this site wasn't exactly made for a guy like me, im the exception not the rule.:innocent:

Sorry about the long rant, im board. So how is your day going ??:whistling2: 

So on a side note, Thursdays is pay day for the office girls, i have to come in and sign checks because they don't want direct deposits like the contractors. And this is what i found when i went into the bathroom today. I think the new girl is trying to send me a message..


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## Craigslist Hack (Jun 14, 2012)

There are a few companies out there making money and when you look into how they are doing it the answer is usually Location, Clients, and Good Contractors.:thumbup:


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## Yeah (Feb 9, 2015)

I'm still in it for the chargebacks!:thumbup:


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## colorado (May 15, 2015)

What company do you guys recommend here in colorado?


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## BPWY (Apr 12, 2012)

BRADSConst said:


> You haven't worked direct have you? The small local banks want the work done, done correctly and most importantly when they need it done. Like the large national chains, they don't have the resources to manage the few properties that they end up with. Find out who they list with and let them know how you will deliver excellence and then follow through.





Wannabe said:


> Gtx and Brad hit it spot on. My brother-in-law is a bank VP for a small 7 branch bank and he asked 2 weeks ago if I still did cleanouts since they needed help on a few properties. I referred him to a local BROKE P&P guy who he called and did hire.
> 
> I would have done if I still had my CASE skid "helper"..... Hmm





Craigslist Hack said:


> There are a few companies out there making money and when you look into how they are doing it the answer is usually Location, Clients, and Good Contractors.:thumbup:





Definitely all about location, location, location.

Over the course of several years going to the local Chamber of Commerce mixers I was introduced to 6 or 8 local bank managers.
To a man they all said the local banks sell their loans before the ink is dry on the paper. Often the loans are presold before they are closed.
They knew of no one in my area that kept their loans in house.

Kudos to the guys that have access to such work in their area where you can meet face to face at a property and work out any problems.


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## newreo (May 30, 2014)

Zuse said:


> " These hoops you speak of " can i assume that from my post you have come to the conclusion that's what i do? Jump through the ever changing industry standards that were forced upon me because of lack of regulation and over sight. kinda like what Walmart does to its local suppliers to meet customers price expectations that want and expect low prices when the walk threw the door. Or the local convenience store that sales ciggs and beer, who on average looses 10% profit do to theft or broken products..extra, extra.
> 
> I grew because of i was asked to by the company's i work for, They had a need and i filled it, i new before hand that the profitability was there before i took on more territory. Try to keep in mind that for the P&P industry that not all area are the same, I just happen to be in area that are high growth and have a high demand.
> 
> ...


Yes, we talk to private customers every day and we talk to national once in a while, so I can compare. We do investments also and we are the builders. Time of P&P had gone and the reason you had been asked to take more as you probably the only person who didn't dump them yet. I am talking about from our own experience. Last year we started to receive more and more orders as vendors started to flee the industry, at first it was - yes lets do it, but it didn't last long. I am not saying that we didn't have profit, we did, but with the reimbursement there is at the moment this industry is a joke


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## Stormin (Mar 8, 2015)

Hello,
I was a contractor in Alaska for many years, and I got a lot of work because I was a warm body with half a brain standing in a state where they couldn't find anyone.

I hear horrorstories from the vendors in big cities; I am in the country in a place where, once again, I am a warm body who can get a job done.

Why do I do this? My wife has MS and I can schedule my work around her medication nights (& associative side affects.)


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