Need some advice for new startup company - REO Property Preservation Forum
 
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Old 10-01-2013, 12:07 PM Thread Starter
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Need some advice for new startup company

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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Old 10-01-2013, 02:09 PM
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yep..it's all over this industry..
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Old 10-01-2013, 02:23 PM
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Quit. Now.
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Old 10-01-2013, 03:23 PM
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DO NOT START A COMPANY IN THIS INDUSTRY!!!!

If you want to own a small preservation company buy a LARGE one and wait!!!!
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Old 10-01-2013, 05:59 PM
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Originally Posted by Craigslist Hack View Post
DO NOT START A COMPANY IN THIS INDUSTRY!!!!

If you want to own a small preservation company buy a LARGE one and wait!!!!
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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Old 10-01-2013, 06:58 PM
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Originally Posted by bigdaddy View Post
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
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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Old 10-01-2013, 09:11 PM
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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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Old 10-01-2013, 09:17 PM
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Originally Posted by Craigslist Hack View Post
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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Old 10-01-2013, 09:28 PM
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Originally Posted by bigdaddy View Post
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
Do you have the website info so that we can check this out
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Old 10-01-2013, 10:28 PM
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Quote:
Originally Posted by bigdaddy View Post
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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