The property preservation business

Let's dive into the world of property preservation with this tactical checklist of what you need to learn in order to start a business in this competitive industry.

What is Property Preservation?

Alright, let's start with the basics. Property preservation is all about taking care of foreclosed properties, whether they're empty or still occupied. Think of it as being a property's guardian angel during tough times. You'll work with banks and asset management companies, handling everything from repairs and inspections to insurance claims and regular maintenance.

Some folks in the industry call it "mortgage field services," which sounds pretty fancy, right? But don't let that intimidate you. At its core, it's about keeping properties in good shape and protecting their value.

If you can get involved with REO (that's "real estate owned") rehabs and repairs for national servicing companies, you'll be setting yourself up for success. Another great option is to work as a subcontractor for a company that already has connections with these national servicing companies.

Getting Your Foot in the Door

Most people start out in this business as a Property Preservation Vendor (or PP Vendor for short). It's a great way to learn the ropes and build connections. Once you've got some experience under your belt, you might decide to start your own company and hire other vendors. It's a fantastic way to grow in the industry while helping others get their start too.

Now, you might be wondering about qualifications. The good news is, you don't need a fancy degree to get started in property preservation. A high school diploma is usually enough to get your foot in the door. But here's a pro tip: consider getting some industry-specific certifications. They can really give you an edge over the competition.

One place to look into is the National Association of Mortgage Field Services (NAMFS). They've been around for over 25 years and offer training in all sorts of areas like inspections, property preservation, and general industry knowledge. Plus, once you complete their courses, you'll be listed in their Membership Directory. It's a great way to get noticed by potential clients.

The Three Pillars of Property Preservation

In this business, there are three main areas you can focus on. Think of them as the three pillars of property preservation:

1. Inspection Services: This is all about keeping a close eye on foreclosed properties. You'll be doing regular check-ups, maybe weekly or monthly, to see what shape the property is in. You'll report on things like whether anyone's living there, if there's any new damage, and how repairs are coming along if any are being done.
2. Repair Contractor: This is where you get to roll up your sleeves and get your hands dirty. You'll be giving repair estimates and, if your bid is accepted, either doing the repairs yourself or managing a team to get them done. This could be anything from fixing a leaky roof to completely renovating a property.
3. Maintenance Contractor: This pillar is all about the smaller, regular jobs that keep a property in good shape. Think boarding up windows, winterizing properties, clearing out trash, basic cleaning, and lawn care. It's less about major repairs and more about consistent upkeep.

Each of these areas has its own set of skills and challenges, so you can choose the one that best fits your experience and interests. Or, if you're feeling ambitious, why not try all three?

Getting Your Property Preservation Business Off the Ground

Alright, so you're excited about property preservation and ready to jump in. Fantastic! Let's talk about how to turn that enthusiasm into a thriving business.

First Things First: Business Basics

Starting a property preservation business isn't too different from starting any other kind of business. Here's a quick checklist to get you started:

1. Choose your business structure: Will you be a sole proprietorship, an LLC, or a corporation? Each has its pros and cons, so do your homework.
2. Write a business plan: I know, I know, it sounds boring. But trust me, it's crucial. It'll help you stay focused and organized as you get started.
3. Get insured: This industry involves a fair bit of risk, so make sure you're covered. Don't skimp on insurance!
4. Get licensed: Check what licenses you need in your state. Every state has different requirements.
5. Get equipped: You'll need a reliable vehicle (think van or truck) to haul your tools and equipment.
6. Build your team: Decide if you'll need employees or if you'll work with independent contractors.

Remember, banks are serious businesses. They want to work with companies that look professional and reliable. So make sure you've got all your ducks in a row before you start reaching out to potential clients.

Becoming a Property Preservation Vendor

Now, let's talk about becoming a Property Preservation Vendor. This is how most people get their start in the industry. Here's what you need to do:

1. Sign up with national property preservation companies: There are quite a few out there. Some of the big players include A2Z Field Services, Assurant, Cyprexx Services, and Mortgage Contracting Services. But don't stop there - do some research and find others in your area.
2. Apply as a Repair Vendor, not a Maintenance Vendor: This is important! These are two different positions, and you want to be on the repair side of things.
3. Get certified: Remember what we said about certifications giving you an edge? Now's the time to look into those NAMFS courses we mentioned earlier.
4. Brush up on your skills: If you've got experience in things like changing locks, boarding up windows, landscape maintenance, or general handyman work, you're already ahead of the game.

Marketing Your Property Preservation Business

Once you're set up, it's time to get the word out about your awesome new business. Here's how:

1. Create marketing materials: Business cards, brochures, the works. Make them look professional!
2. Build a website: It doesn't have to be fancy. A simple site with your services and contact info will do.
3. Get social: Set up business accounts on LinkedIn, Facebook, and Angie's List. These can be great for networking and finding new clients.
4. Network, network, network: Don't be shy about reaching out to banks and property preservation companies in your area. Sometimes, good old-fashioned face-to-face networking can be your best bet.
5. Start small and build your reputation: When you're just starting out, focus on doing a great job on smaller projects. As you build a reputation for quality work, you can start bidding on bigger jobs.

Working with Banks

Now, here's where the real money is in property preservation - working directly with banks. Banks need people to take care of foreclosed properties, and that's where you come in. But how do you get these lucrative contracts? Here are some tips:

1. Build your skills and get licensed: The more services you can offer, and the more qualifications you have, the more attractive you'll be to banks.
2. Research local needs: Google property preservation in your area and see what services are most in demand. Tailor your business to meet those needs.
3. Master the art of bidding: When you're bidding on a job, always visit the property first. Take photos, make detailed notes, and then use that info to create a thorough, competitive bid.
4. Focus on curb appeal: Remember, part of your job is making these properties look attractive to potential buyers. Banks will love you if you can make their properties stand out.

Understanding HUD Guidelines

When you're in the property preservation business, you'll hear a lot about HUD - that's the Department of Housing and Urban Development. They've got some specific guidelines you'll need to follow, especially if you're working on foreclosed properties. Let's break it down:

1. Property "Accessories": HUD guidelines cover more than just the main building. You'll need to take care of things like swimming pools, spas, and outbuildings like garages and sheds.
2. Registration Fees: There's usually a fee to register each property you work on. But here's a pro tip: you can often get this fee reimbursed if you fill out the right forms and submit them to HUD.
3. Weather Preparation: A big part of property preservation is getting properties ready for harsh weather. Think about things like blizzards, hurricanes, thunderstorms, and high winds. You'll need to know how to protect properties from all of these.
4. Documentation: HUD is big on documentation. You'll need to take before and after photos, keep copies of all invoices and receipts, and maintain a detailed list of everything you do at each property.
5. Maximum Allowance: Generally, HUD has a Maximum Property Preservation Allowance of $5,000. Keep this in mind when you're bidding on jobs.

Navigating Challenges in Property Preservation

Let's be real - no business is without its challenges, and property preservation is no exception. Here are some common hurdles you might face and how to overcome them:

1. Regulatory Compliance: Laws and regulations in this industry can change pretty frequently. Stay on top of these changes to avoid penalties and maintain your reputation.
2. Market Fluctuations: The demand for property preservation can go up and down with the housing market. Diversifying your services can help you weather these fluctuations.
3. Quality Control: When you're managing multiple properties, maintaining consistent quality can be tough. Implement strong quality control procedures to keep your standards high.
4. Resource Management: Efficiently managing your time, personnel, and materials is crucial. Consider investing in project management software to help streamline your operations.

Final Words of Wisdom

As we wrap up, I want to share some final thoughts that I've picked up over my years in this business:

1. Treat Your Business Like Your Lifeline: This isn't just a side gig. If you want to succeed, you need to give it your all.
2. Provide Exceptional Service: Always do your absolute best work. Your reputation is everything in this business.
3. Document Everything: Take photos, keep records, write down any issues you encounter. This can save you a lot of headaches down the line.
4. Stay Educated: The property preservation industry is always evolving. Keep learning and staying up-to-date on industry trends and best practices.
5. Build Relationships: Whether it's with banks, other contractors, or your clients, strong relationships can make or break your business.
6. Be Patient: Success in this industry doesn't happen overnight. It takes time to build a reputation and a solid client base. Don't get discouraged if things start slow.
7. Adapt and Overcome: You'll face challenges, that's a given. But it's how you handle these challenges that will define your success.

Remember, your clients need you. Properties need care, and banks need reliable partners to provide that care. By running your business with integrity, professionalism, and a commitment to quality, you can build a stable, profitable career in property preservation.

I hope this quick guide has given you a solid foundation to start your journey in the property preservation industry. With hard work, dedication, and the right approach, you can build a thriving business in this field. Good luck, and here's to your success!