What should I do? How would you run it? - REO Property Preservation Forum
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post #1 of 24 (permalink) Old 09-18-2012, 12:59 PM Thread Starter
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What should I do? How would you run it?

A little background on me. I used to be a sales manager for a large window company and ran several offices salesman and crews. Then I took a job as a project manager for a large tank company that built water and oil tanks. While in the tank industry I moved to Chattanooga, TN then on to Birmingham, AL then back here to Evansville. I wasn't making crap for money and working almost as much. After a dispute with my boss at the tank company over him asking me to falsify documents I left. He later committed suicide while facing 18 federal indictments.

I was burnt out on life but my kids still had to eat. I hopped in a truck with a buddy and thought screw the corporate world I am going to go swing a hammer. After a few months in a truck with my buddy we figured out there may actually be money in this. We were working for a regional and they were keeping us buried in work. When they owed us $20,000.00 we said that is enough. We then worked for a series of smaller companies and my buddy decided to go a different direction. For the last 2 years we have been working for a couple of nationals and some regionals and not really content with most of them.

We finally got in with a big National and now I don't want to become a bottom feeding regional like you guys speak of.

Let's make a few things clear.

There is more work than anyone can do out of a truck with a crew.

The nationals will NOT do business with you if you can't cover the entire state.

I don't want to drive all over the world or run an office. I simply want the local work here in our city and not to have anyone owing me 20k.

So how do you take the whole state coverage without hiring contractors?

When we hire contractors we have to process their photo's and upload to the client. This means processors, computers, building, and overhead.

To pay for that over head I have to take a percentage of what the client pays me.

How would you guys fix this problem.

We don't want to be unfair we want our employees to be treated fairly. I also want to make a decent living without taking a thousand phone calls a day. I HATE having office people asking me questions all day.

I want to enjoy life raise my kids and make some money.

We will NOT work for realtors because they are pickier than home owners but pay less.

We already stay away from sales cleans and refresh type orders. We really don't care for REO work. It doesn't fit our business model well. We love P&P.
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post #2 of 24 (permalink) Old 09-18-2012, 05:20 PM
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My opinions:
- Try and get a decent amount of capital to avoid the "paid when we get paid" mentality. Example: US Best doesn't always pay the best prices, but always pay FAST. That's worth something to me, and I'm willing to accept slightly lower margins because of it.
- P&P model makes sense when you, or employees are going to do the work. Subbing it out scares the hell out of me. They didn't report that roof leak? YOU get charged back. REO, from my experience, if you do get any sort of chargeback they pale in comparison to P&P chargebacks.
- You will have contractors not like you, even if you do everything perfectly. If you get a non-preservation contractor, they are not used to the picture requirements, and will not understand why they can't get paid for not taking the right pictures. They will get pissed.


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Originally Posted by Doberman Properties View Post
A little background on me. I used to be a sales manager for a large window company and ran several offices salesman and crews. Then I took a job as a project manager for a large tank company that built water and oil tanks. While in the tank industry I moved to Chattanooga, TN then on to Birmingham, AL then back here to Evansville. I wasn't making crap for money and working almost as much. After a dispute with my boss at the tank company over him asking me to falsify documents I left. He later committed suicide while facing 18 federal indictments.

I was burnt out on life but my kids still had to eat. I hopped in a truck with a buddy and thought screw the corporate world I am going to go swing a hammer. After a few months in a truck with my buddy we figured out there may actually be money in this. We were working for a regional and they were keeping us buried in work. When they owed us $20,000.00 we said that is enough. We then worked for a series of smaller companies and my buddy decided to go a different direction. For the last 2 years we have been working for a couple of nationals and some regionals and not really content with most of them.

We finally got in with a big National and now I don't want to become a bottom feeding regional like you guys speak of.

Let's make a few things clear.

There is more work than anyone can do out of a truck with a crew.

The nationals will NOT do business with you if you can't cover the entire state.

I don't want to drive all over the world or run an office. I simply want the local work here in our city and not to have anyone owing me 20k.

So how do you take the whole state coverage without hiring contractors?

When we hire contractors we have to process their photo's and upload to the client. This means processors, computers, building, and overhead.

To pay for that over head I have to take a percentage of what the client pays me.

How would you guys fix this problem.

We don't want to be unfair we want our employees to be treated fairly. I also want to make a decent living without taking a thousand phone calls a day. I HATE having office people asking me questions all day.

I want to enjoy life raise my kids and make some money.

We will NOT work for realtors because they are pickier than home owners but pay less.

We already stay away from sales cleans and refresh type orders. We really don't care for REO work. It doesn't fit our business model well. We love P&P.
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post #3 of 24 (permalink) Old 09-18-2012, 07:04 PM Thread Starter
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Quote:
Originally Posted by SwiftRes View Post
My opinions:
- Try and get a decent amount of capital to avoid the "paid when we get paid" mentality. Example: US Best doesn't always pay the best prices, but always pay FAST. That's worth something to me, and I'm willing to accept slightly lower margins because of it.
- P&P model makes sense when you, or employees are going to do the work. Subbing it out scares the hell out of me. They didn't report that roof leak? YOU get charged back. REO, from my experience, if you do get any sort of chargeback they pale in comparison to P&P chargebacks.
- You will have contractors not like you, even if you do everything perfectly. If you get a non-preservation contractor, they are not used to the picture requirements, and will not understand why they can't get paid for not taking the right pictures. They will get pissed.
My attorney has advised me to keep the pay as paid agreement in place due to subcontractor agreement. I am not interested in paying ahead then absorbing the charge back all alone. We tried that model for over a year and it was a constant struggle with guys that turned in work late and we had paid them the full amount then the client charges us back etc. Pay as paid will be our only method of payment as long as I am still in the business.

I did manage to work out a pay plan that allows me to pay my crews every week. This helps them with cash flow.

We have to sub out work because we cover areas that are 7 or 8 hours from the office.

I try to go out in the field and work with new guys and train them the best I can. The problem is if I drive 3 hours from home then the guy washes up I not only lost a day or two of my life I am back at the beginning.

I am not trying to make excuses just pointing out some of the problems we face on this side of things.

I asked an open ended question because we truly are looking for an outside the box solution. We want to do things differently.
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post #4 of 24 (permalink) Old 09-22-2012, 09:54 AM
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As a supplier I am more of a neutral party. I try to help where I can for the most part. I started out in the REO field and have worked in P&P and for brokers and investors. The way this use to be an individual could work directly for HUD or a bank and handle a city or an area. It's not like that anymore. Now you have to work for either a national or regional and even that is starting to change since most national are starting to only deal with regionalís. I think itís time that people started working together to meet a common goal and look forward towards helping each other rather than pointing fingers. Some people don't like regionals but they do carry a lot of burden. The way this industry is turning you are going to have to work for a regional if you only want to handle a small area because the big guys now only want to call one person versus 100 people. Their motto ďitís easier to catch up with one person with a late order versus trying to call 100 people with late ordersĒ. The industry is changing.
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post #5 of 24 (permalink) Old 09-22-2012, 07:51 PM
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vendor1-Although true and poignant are the things you state, there is one thing that must be taken into account. Pretty much every "national" started as a regional in one form or fashion. They started covering a particular region of the country and saw an opportunity to grow that endeavor and expand the burden. Take AMS for example. They started out as a NE regional that got most all of it's work from a handful of various nationals that had longevity on their side, they quickly grew and outpaced the national they were getting their work from and decided to actively pursue contracts on their own.
Is this problematic? Nope, not in the least. What is problematic is the fact that pricing schedules have already detrimentally deteriorated to the point that even direct work from the national is barely a survivable income, add to that the work will now be coming from another tier down the totem pole and your reward gets even less. So, at some point somebody has to be willing to absorb the risk vs. reward. Should it be the lowest ranking officer? That is a good question, regardless a business decision has to be made by the business owners and determine if the relationship will be beneficial to EACH. The "banding together" for the greater good simply does NOT work.
For example (and no offense to you, as you are likely a good person), YOU do not have MY business' best interest in mind, and conversely I certainly do not have yours in mind. Does that mean I would not help/assist/aid you if the situation were to arise....I certainly would. But matter of factly, I have one priority....my own survival.
The true advantage is we all have the option of free will! Dobe is just looking for insight as to creating a smoother running operation, but unfortunately what may work wonderfully for one operation could be a complete disaster for another. There are too many variables at play, staff, resources, volume, workload, coverage area, and the list goes on.
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post #6 of 24 (permalink) Old 09-23-2012, 11:52 AM Thread Starter
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Quote:
Originally Posted by P3+ View Post
vendor1-Although true and poignant are the things you state, there is one thing that must be taken into account. Pretty much every "national" started as a regional in one form or fashion. They started covering a particular region of the country and saw an opportunity to grow that endeavor and expand the burden. Take AMS for example. They started out as a NE regional that got most all of it's work from a handful of various nationals that had longevity on their side, they quickly grew and outpaced the national they were getting their work from and decided to actively pursue contracts on their own.
Is this problematic? Nope, not in the least. What is problematic is the fact that pricing schedules have already detrimentally deteriorated to the point that even direct work from the national is barely a survivable income, add to that the work will now be coming from another tier down the totem pole and your reward gets even less. So, at some point somebody has to be willing to absorb the risk vs. reward. Should it be the lowest ranking officer? That is a good question, regardless a business decision has to be made by the business owners and determine if the relationship will be beneficial to EACH. The "banding together" for the greater good simply does NOT work.
For example (and no offense to you, as you are likely a good person), YOU do not have MY business' best interest in mind, and conversely I certainly do not have yours in mind. Does that mean I would not help/assist/aid you if the situation were to arise....I certainly would. But matter of factly, I have one priority....my own survival.
The true advantage is we all have the option of free will! Dobe is just looking for insight as to creating a smoother running operation, but unfortunately what may work wonderfully for one operation could be a complete disaster for another. There are too many variables at play, staff, resources, volume, workload, coverage area, and the list goes on.
Great post!

Our issue as a company is we love the industry and we realized very quickly that we need to work direct for the national. NOT through a regional. It took 2 years to get a decent national and they wouldn't play ball with us until we agreed to take 3 states. They don't want to deal with small guys.

I would prefer to work in a 90 mile radius of our office and have a small operation. If you know of a decent national that would keep us consistently busy let me know. Until then I have some major headaches to contend with.

We currently have 190 open orders in Illinois, 60 in Indiana, and 56 in Kentucky. I am going to have to make some calls tomorrow and see if I can't get them to stop sending work and let us catch up?
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post #7 of 24 (permalink) Old 09-23-2012, 01:07 PM
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Is it purely a matter of your current crews simply not understanding the importance of deadlines?
If that is the case then I would start incorporating some harsh penalties or completely halt any further work that is being funneled to them until they get a grip on the importance of turning the work in on time.
Or is it a matter of not having enough crews to handle the current workload?
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post #8 of 24 (permalink) Old 09-23-2012, 08:00 PM Thread Starter
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Quote:
Originally Posted by P3+ View Post
Is it purely a matter of your current crews simply not understanding the importance of deadlines?
If that is the case then I would start incorporating some harsh penalties or completely halt any further work that is being funneled to them until they get a grip on the importance of turning the work in on time.
Or is it a matter of not having enough crews to handle the current workload?
It's both really. I never wanted to have this many crews or pay people to babysit and upload for them. This is how guys get in over their head. We have a small office staff and we are getting it done but the nationals are burying us and they pay decent so it's not money.

My guys can only do so much. New guys require alot of babysitting. They are also hard to find.
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post #9 of 24 (permalink) Old 09-23-2012, 09:10 PM
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Originally Posted by Doberman Properties View Post
? . .New guys require alot of babysitting. They are also hard to find.
x2!!!
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post #10 of 24 (permalink) Old 09-24-2012, 05:51 AM
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Quote:
Originally Posted by Doberman Properties View Post
We have a small office staff and we are getting it done but the nationals are burying us and they pay decent so it's not money.
My guys can only do so much. New guys require alot of babysitting. They are also hard to find.
Lots of business.
Not a lot of help in the needed areas.
The owner is also the head cook and bottle washer.
Your spinning too many plates by yourself.
You need to be doing what will benefit your company the most.
Picture yourself in the same position 5 years from now.
It isn't a bad problem to have unless you let it go on.
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