How To Start A Property Preservation Company
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Some have already cashed in on the bad luck of the others that are loosing their properties. What is property preservation? “Property Preservation” is the preservation of REO properties or “Bank Owned Properties” These properties are vacant and need to be either cleaned and marketed or maintained after, during, or between sales. There’s millions of properties and billions in dollars.
Want some? I’ll shoot you straight and tell you what you need to know, where to find it and how to get to it. USE OUR SPONORS PLEASE! Plus you’re probably going to take business from me
The first thing you need is customers, not equipment! Most think they need to run out and spend a bunch of money. You don’t have to invest until you have customers. Now, that’s not to say you won’t have to have insurance. We’ll cover that a little later in the how to. At the bottom of this article you’ll find links that will help you in the start of your new property preservation business. These are real links to real companies that you really need to try and work for. Sign up through their systems and talk to as many folks at those companies as you can. Book mark them and study all of their notes and memos. Learn how each company works, what they do and how they expect you to get things done and most importantly how you will bill and get paid! This is extremely important!!!!! Make sure you understand who and when you will get paid. Also understand why you may not be paid for a job, very important and could save you a big hassle and a lot of work missed. Don’t let bad communication ruin good relationships!
I’ll COVER CUSTOMERS FARTHER DOWN
The second thing you need and much more important than any equipment or office space is NSURANCE! Get more than you need and as much as you can afford, right off the bat. In the property preservation world insurance is king and there are several reasons for this. First off is insurance ever bad, no. Is having too much bad, no. Get as much as you can afford right from the get go. Consider it your start up cost. You’ll need to types of insurance (Aside from the workman’s comp and various insurances you’ll need as you grow) E&O and General liability. General liability is something that anyone doing business anywhere should have in some way or another. General liability insurance is very simple to get and any insurance agent can and would probably more than helpful in setting you up with a policy. Shop around and ask for at least three different quotes. You can expect to pay about 0.00 to 0.00 a year for general liability. You’ll have to pay 20%-30% up front and the rest can be spread over 12 months. This is easy to do and should be done right away before you step foot on any property.
Now we’ll cover E&O insurance. E&O insurance is different then general liability insurance. E&O coverage is your golden key to building a great property preservation company. Here’s why and why you should get it as soon as possible. E&O coverage is designed to cover a contractor in the event that something happens to the property due to the contractors fault or no fault. TO make it simple lets say that you get a work order to go to a property and do a “condition report” You do your work, take your photos and file your finding when you publish your report and bill for your work order. A few cold winter months go by and the pipes break, the roof leaks and the house gets mold. E&O saves your, you know what. This is exactly what the insurance is designed to cover. General liability will not cover this; please don’t learn the hard way! This insurance also covers your crews and anything they may mix. Now, E&O coverage is a bit more expensive and will more than likely have to be paid in full for your first year. This is going to run about 00.00 a year if you shop around. There’s one thing to remember to tell your agent. You will be working on bank foreclosed homes. It makes a difference. Some companies wont cover a “Property Preservation Company” After all it is risky and if you’re not willing to accept that and cover yourself
The next thing you’ll need to think about is how to get things done and when to get equipment. You have insurance and can work a job if it comes in. You have a customer to service properties for and you’re ready to go work hard and make some money. Or you would be if you had things to do the job with anyways. So it’s time to get some “tools” Use your first work order to buy what you’ll need to work your first job. Another words let the job pay for the equipment. There’s no reason to buy what you don’t need and there’s no reason to buy something until you have a work order that calls for it. If your first order calls to board a house buy a hammer. If it calls to mow the lawn buy a lawn mower. AND DON’T BUY NEW!!! Why would you ever buy new equipment if not only do you not have to but you don’t know if you’ll still be doing this in a month. How hard is it to sell something that other people are buying rather than trying to sell something that is new but used for new prices…Right? Yea..used.
One thing that’s well in your favor is that for the most part, “property preservation companies” supply labor. Sometimes you’ll need to buy ply wood or board a pool but for the most it’s labor and hauling and dump fees, which are paid back, so in all not an expense either. You will need a generator and not everyone has a generator. Again, used and small, you won’t need to run anything but a vacuum and a fan so a large generator isn’t needed and in all will drag you, your crews and your gas savings down. If you have the know how and can afford it an inverter is the key. With an inverter it can be run on any vehicle and anyone can use it as it doesn’t have to be “started” An inverter requires vehicle modification but works well and save in the long run.
The other things you’ll need include buckets, mops, brooms, trash cans and bags, cleaning supplies and various general clean up tools. Think about when you’ve moved. We’ve all done it. Now imagine not being happy about it. Being put out and can’t take your things with you. The properties are “in distress” and need cleaned. You have to be able to clean and lock any property. Most of the cleaning supplies you need you already have and clean your house with or your garage with everyday. Chances are you wont need to spend a lot on this either.
Now let’s talk supplies. I know you thought cleaning “supplies” where supplies but they have become “equipment” now. Supplies are the things you’ll need in order to “secure a property” 99% of the business a property preservation company does is property securing. To secure a property you’ll need to relock the door and dead bolts to preset key codes and hang lock boxes with preset codes so that agents and contactors have access to the property and so that others don’t. For this you’ll need door knobs, dead bolts, dead bolt covers, master locks, hasps, sliding door locks, and some key safes or lock boxes to put the new keys in. All these supplies and everything else you may ever need can be bought and shipped online. Roper Locks, MFS Locks and many more.
Another main stay of any property preservation company is to perform a winterization. It’s not that hard and it doesn’t take more than a few bucks so don’t be afraid of doing them. Besides you have E&O coverage just in case, right? At any rate you’ll need to be ready to winterize. Most service companies provide the vendors with the “preferred steps” on how to winterize a property. Use the world wide web and study the different systems and ways to winterize them. Once you do one or two it’s like riding a bike. You will have to get some equipment and again I would like to stress, used and small. You’ll need to pressurize the system to check for broken pipes. For this you’ll need a small air compressor in order to fill the lines to 35psi and check the system for breaks. You can find information on this and many other things right here on eHow.
And last but not least and probably not really last but anyway you need to build a pool cover or board a window from time to time. Make sure you know how your company likes it done. Some prefer this way while others prefer another. Make sure you know which they prefer. Pool covers involve framing, and covering with chicken wire and plastic to where it could support 50 pounds in the center.
Other than that common sense, labor, hauling, cleaning, and a bunch of gas!
Customers, remember when we started I said we would talk more about customers. Well here we go. The very first thing to keep in mind is that it’s a very busy business that’s never the same from day to day or from work order to work order for that matter. Sometimes information is lost, not transmitted correctly or just not done. It happens and you’ll need to deal with it as it arises. Sometimes it’ll be free. There’s nothing you can do about it. Sometimes it’ll need to be done for a discount, nothing you can do about it except get it done and bill it. If you’re busy how busy is your representative. If you’re representative is busy guess how busy the bank representative is. So on and so forth. You’ll be asked to bid things free and worse sometimes you’ll be asked to bid something twice for free because it was lost or done wrong. The point is, make sure you’ve done it right, sent and saved all photos and records. You’ll cut down on free and discounted along with second trips. Most problems between contractors and vendors can be avoided if communications are at the highest level.
Know how you’re supposed to bill and what your supposed to bill for. Knowing this is key to a smooth relationship with your vendors. Knowing what and how, you can avoid mistakes on your part and theirs. If you know you’re getting for a winterization and you do a winterization you can bill and know that nothing can be disputed.
You’ll need to be able to float all your labor and supplies for at least 30 days. Most companies pay on a 30 day period and you won’t be getting paid for that term. If you understand that it’ll be at least 30 days and you prepare for a 30 day pay out, you wont have to be looking in the mail box everyday and bugging your rep about “where’s my check, why won’t you pay me” This is the best way to rock the boat and lose an account. Understanding how you get paid, how they get paid and how everything works is important. Make sure you understand that Pictures are the ruler of the market. If you have pictures your covered their covered and everyone is happy and paid. Don’t be surprised or hurt if you don’t have pictures and no one will pay out!
I’ll add to this edit this and I’ll have plenty more to post on how to do things in the field.
Find the companies to work for below and the companies to get some supplies from
Also see www.FirstCallPropertyPreservation.com
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