An open Letter to the Newbie's - REO Property Preservation Forum
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post #1 of 66 (permalink) Old 12-05-2015, 11:16 AM Thread Starter
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An open Letter to the Newbie's

Maybe we should start a stickie on this subject?

Each year many of us veterans get hit with PM's from new guys asking the same questions we have responded to a million times in the open forum. The answers given are not what the poster wants to hear so he just keeps asking.

Here is some logic for you guys that should answer every question about every company because it all boils down to math.

Hud, Fannie Mae, Freddie Mac, VA, FHA, Whoever sets their standard pricing.

The national or servicer should take 20-25% of that.

The regional will then usually split what is left with the BOTG contractor somewhere in the 60/40 range give or take 10-15% depending on the regional.

So for example a 100.00 grass cut
-25% for National

This Leaves $75.00 For the Regional to work with

The regional then takes 40% and gives the contractor 60%

Leaving BOTG making $45.00 on a grass cut.

If you are making only $15.00 or some other absurdly low amount most likely you are the sub of a sub of a sub.

Are there bad companies out there? YES absolutely!

Are there good companies out there? That's debatable because they are all subject to the same pricing and the same QC rules. Each and every company out there will send you back for a missing meter pic or some other such nonsense because these are the rules. Each one of them will call you one day out of the blue and say we now need these additional 5 pics on every property. The Cost Estimator will become more and more standard as time goes by. Until someone takes them to court and wins the cost estimators will be the norm. Regionals will get tired of doing the CE's and soon will pass that cost on to the $15.00 a yard guy.

So many of you guys think we are trying to keep you out of the industry to line our own pockets with all this work. THe truth is we only tell what is going to happen to protect you.

Since the start of this forum and even back in the contractor talk days we have been asked about this company or that only to see a new thread a month or two down the road screaming "they suck they don't pay!" etc. etc. I often wonder to myself is the company or did the contractor not complete the work properly? The rules of this are such that if you don't do EVERYTHING the way the national wants it NOBODY gets paid. So why would a regional pay a guy who half way did a wint or missed pics on a property condition?

If you are new you are going to make mistakes it's just that simple. You were not born with the knowledge of what makes a property in Conveyance Condition.

If you are having trouble finding work the only work you are going to stumble across is work no one else wants. LEARN from that! Ask yourself why they are calling YOU! Every market in the US has experienced contractors. Why would they be offering such a SWEET deal to a new guy with ZERO experience?

If you were going to hire a plumber would you call a school teacher? or a guy with ZERO experience?

In closing USE commons sense people. If you can make that companies price sheet work then give it a go but be careful. The vets around here got in back when things were better they became established and most are diversifying and trying to get out.
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post #2 of 66 (permalink) Old 12-07-2015, 08:12 AM
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Quote:
Originally Posted by Craigslist Hack View Post
Maybe we should start a stickie on this subject?

Each year many of us veterans get hit with PM's from new guys asking the same questions we have responded to a million times in the open forum. The answers given are not what the poster wants to hear so he just keeps asking.

Here is some logic for you guys that should answer every question about every company because it all boils down to math.

Hud, Fannie Mae, Freddie Mac, VA, FHA, Whoever sets their standard pricing.

The national or servicer should take 20-25% of that.

The regional will then usually split what is left with the BOTG contractor somewhere in the 60/40 range give or take 10-15% depending on the regional.

So for example a 100.00 grass cut
-25% for National

This Leaves $75.00 For the Regional to work with

The regional then takes 40% and gives the contractor 60%

Leaving BOTG making $45.00 on a grass cut.

If you are making only $15.00 or some other absurdly low amount most likely you are the sub of a sub of a sub.

Are there bad companies out there? YES absolutely!

Are there good companies out there? That's debatable because they are all subject to the same pricing and the same QC rules. Each and every company out there will send you back for a missing meter pic or some other such nonsense because these are the rules. Each one of them will call you one day out of the blue and say we now need these additional 5 pics on every property. The Cost Estimator will become more and more standard as time goes by. Until someone takes them to court and wins the cost estimators will be the norm. Regionals will get tired of doing the CE's and soon will pass that cost on to the $15.00 a yard guy.

So many of you guys think we are trying to keep you out of the industry to line our own pockets with all this work. THe truth is we only tell what is going to happen to protect you.

Since the start of this forum and even back in the contractor talk days we have been asked about this company or that only to see a new thread a month or two down the road screaming "they suck they don't pay!" etc. etc. I often wonder to myself is the company or did the contractor not complete the work properly? The rules of this are such that if you don't do EVERYTHING the way the national wants it NOBODY gets paid. So why would a regional pay a guy who half way did a wint or missed pics on a property condition?

If you are new you are going to make mistakes it's just that simple. You were not born with the knowledge of what makes a property in Conveyance Condition.

If you are having trouble finding work the only work you are going to stumble across is work no one else wants. LEARN from that! Ask yourself why they are calling YOU! Every market in the US has experienced contractors. Why would they be offering such a SWEET deal to a new guy with ZERO experience?

If you were going to hire a plumber would you call a school teacher? or a guy with ZERO experience?

In closing USE commons sense people. If you can make that companies price sheet work then give it a go but be careful. The vets around here got in back when things were better they became established and most are diversifying and trying to get out.
I agree with 99% of what you are saying here, being on the other side of the coin. The only thing that I somewhat dispute is that most of the nationals/regionals do not even acknowledge the fact that there are professionals in this industry, TBH. I have worked for three different companies in this industry, and the largest one I worked for had that mentality. This is one of the biggest things to look out for when considering a regional/national, respect. Even if a national shows that respect, you need to make sure that it is not only from the rep you are speaking with. Ask any of the people on here that have worked with me previously! I (hope) that I have/had a great relationship with these contractors, I consider a lot of them friends I have never met, but that does not stop the higher ups at a company from screwing anyone over, whether purposefully, or not. This may not be the easiest thing to assess, but if you receive respect from your point of contact, and you are not getting what you really want/need, I would not consider that a good business relationship. I am definitely not saying that all of the nationals and regionals are not going to respect anyone, but I think that is one of the biggest problems that is overlooked in this industry. Hope I didn't repeat myself too much there, and hope everyone has a happy and healthy holiday!
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post #3 of 66 (permalink) Old 12-07-2015, 08:31 AM Thread Starter
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I agree with 99% of what you are saying here, being on the other side of the coin. The only thing that I somewhat dispute is that most of the nationals/regionals do not even acknowledge the fact that there are professionals in this industry, TBH. I have worked for three different companies in this industry, and the largest one I worked for had that mentality. This is one of the biggest things to look out for when considering a regional/national, respect. Even if a national shows that respect, you need to make sure that it is not only from the rep you are speaking with. Ask any of the people on here that have worked with me previously! I (hope) that I have/had a great relationship with these contractors, I consider a lot of them friends I have never met, but that does not stop the higher ups at a company from screwing anyone over, whether purposefully, or not. This may not be the easiest thing to assess, but if you receive respect from your point of contact, and you are not getting what you really want/need, I would not consider that a good business relationship. I am definitely not saying that all of the nationals and regionals are not going to respect anyone, but I think that is one of the biggest problems that is overlooked in this industry. Hope I didn't repeat myself too much there, and hope everyone has a happy and healthy holiday!
I'm not sure if I ever worked with you at your previous company or not. I have a great relationship with a few people there and that has helped. They know when they call me what they are going to get. That doesn't change the fact that they are in business for themselves and I am replaceable. Look at the thread on here from the recruiter. Guys are all over him wanting work. It's sickening how thirsty some of these guys are. That thirst works against them in the end. They get themselves in trouble by doing work they shouldn't just to be working.

Working direct with the banks or even the asset manager is so so much easier than any national. No cost estimators, not nearly as many pictures, you just tell them what is going on at the property and send them a bid. They always do something maybe not your entire scope or every line item but they always do some of it. We lose the occasional bid to our competition and that's ok they have bills to pay just like we do.

I'm just not a fan of any National and Regionals don't even make sense to me. As you know there is only so much money that will be paid for a service. When that money is split 2, 3, sometimes even 4 times there isn't anything left for the guy in the field. This is what causes all the poor quality work in the field.
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post #4 of 66 (permalink) Old 12-07-2015, 09:29 AM
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...That doesn't change the fact that they are in business for themselves and I am replaceable. Look at the thread on here from the recruiter. Guys are all over him wanting work. It's sickening how thirsty some of these guys are. That thirst works against them in the end. They get themselves in trouble by doing work they shouldn't just to be working.

Working direct with the banks or even the asset manager is so so much easier than any national. No cost estimators, not nearly as many pictures, you just tell them what is going on at the property and send them a bid. They always do something maybe not your entire scope or every line item but they always do some of it. We lose the occasional bid to our competition and that's ok they have bills to pay just like we do.

I'm just not a fan of any National and Regionals don't even make sense to me. As you know there is only so much money that will be paid for a service. When that money is split 2, 3, sometimes even 4 times there isn't anything left for the guy in the field. This is what causes all the poor quality work in the field.
I absolutely agree. I am sure that most, if not everyone, on here knows I am a recruiter for a national company, but I completely understand where you are coming from. Even for me, I have areas where I need coverage, where I do not know the big players, and have nothing to go on other than what I read on here and other social media. Even if I were to know these great contractors, many of them are scared to work with a company with very little information out there (such as the one I work for), so it is extremely hard not to rely on social media and the evil forms of recruiting (CL and such). I do not blame a single one of them though, because they have every reason to doubt, there has been so much shadiness and despicable behavior in this industry it is, frankly, alarming. To sum it up, I completely agree that people need to do their research, and only take the opportunities that are right for them, but not all of the nationals are evil lol.
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post #5 of 66 (permalink) Old 12-07-2015, 09:35 AM Thread Starter
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I absolutely agree. I am sure that most, if not everyone, on here knows I am a recruiter for a national company, but I completely understand where you are coming from. Even for me, I have areas where I need coverage, where I do not know the big players, and have nothing to go on other than what I read on here and other social media. Even if I were to know these great contractors, many of them are scared to work with a company with very little information out there (such as the one I work for), so it is extremely hard not to rely on social media and the evil forms of recruiting (CL and such). I do not blame a single one of them though, because they have every reason to doubt, there has been so much shadiness and despicable behavior in this industry it is, frankly, alarming. To sum it up, I completely agree that people need to do their research, and only take the opportunities that are right for them, but not all of the nationals are evil lol.
Based on what I know of your program it's unique and nothing like a Safeguard, MCS, Cyprexx, or VRM type of program.
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post #6 of 66 (permalink) Old 12-07-2015, 09:53 AM
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I just signed on with MCS and from what they pay it is not adding up to them taking 25%. So Craigslist Hack let me ask you this. In your opinion Regionals should be taking 40%? I always thought they would take another 20-25% like the nationals.
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post #7 of 66 (permalink) Old 12-07-2015, 10:02 AM Thread Starter
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I just signed on with MCS and from what they pay it is not adding up to them taking 25%. So Craigslist Hack let me ask you this. In your opinion Regionals should be taking 40%? I always thought they would take another 20-25% like the nationals.
Let me clarify that was not my opinion of what they "SHOULD" be taking it was more of a breakout of what the pricing typically reflects. If you look at what they usually pay for a service rate you find it's generally around 60% of what's left after the national takes their cut. It varies some but let's be honest 5-10% on a 30.00 service is not going to make or break a contractor.

MCS's pricing doesn't make much sense at all does it?

Their QC is equally as confusing and inconsistent. If you signed with them you are a brave soul!

I hope it goes better for you than it does for most.
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post #8 of 66 (permalink) Old 12-07-2015, 10:07 AM
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Yeah, I am slowly starting to regret. They told me 25% off National and they even list the national pricing and then once you spend hours signing up you see they are not really clear on what they are paying. The line items they make themselves clear on are pretty low.

If I ever have to sub out work I just take my 20-25%. For me my company does not deserve more then that. All we are doing essentially is pushing paper work. With pricing that MCS is giving it is impossible to sub out and feel right about what you are paying out.
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post #9 of 66 (permalink) Old 12-07-2015, 05:43 PM
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If I ever have to sub out work I just take my 20-25%. For me my company does not deserve more then that. All we are doing essentially is pushing paper work. With pricing that MCS is giving it is impossible to sub out and feel right about what you are paying out.
See, that right there would make you just another part of the problem. You want to sub out work so you would take the ALREADY low pay and take ANOTHER 20-25% and pass on the PRE DETERMINED pay to someone else.

Before you start jumping all over me, let me just say that I am NOT TALKING ABOUT YOU! I said it "would" make you (or anyone else) part of the problem. You seem to agree that it would be impossible to do and not feel right about it, but you did bring up a good point and sooooo many other contractors and middlemen companies do this.

That's the number one problem in this industry and as long as people continue to accept work at a price that is determined by someone else and that work gets chopped 2,3,4 times or more then the regionals and subs of regoinals will always be around. People need to just say no!

A little background on me and my company.

I have been around for a long time and started with preservation and maintenance work with the sole intention of working up to where I am at now which is a repair/rehab contractor and I ONLY do bank work. And I ONLY work direct.

I started out many moons ago with Safeguard and MCS and that was when you could work direct with them, I think now a days you need to cover an entire state to get work? Back then there were zones and I only covered 1 and had all the work I could ever want. Once I got my feet wet I made sure EVERY broker/agent in my coverage area knew who I was and what I did. I walked away from Safeguard and MCS within 6 months.

OMG, I JUST REVEALED THE COVETED SECRET HOLY GRAIL FORMULA EVERY NEWBIE COMES TO THIS SITE FOR!!!

SORRY EVERYONE ELSE, THE NEWBIES NOW KNOW THE SECRET AND ARE GOING TO TAKE ALL OF OUT WORK AWAY!!

PLEASE DON'T BE MAD AT ME!!

Of course that was sarcasm! But I am so sick and tired of hearing all the newbies cry that we won't give them the secret because we are soooo afraid of new competition. The fact is there is no secret! It takes hard work but what I posted above is all you need to know. Just like CL said, if they are contacting YOU, instead of ME, there's a problem. I just recently posted my story about a company called AIM to shed some light to the newbies, I suggest you read that if you are new to the game and some random company calls you to offer you work.

Earlier I said I contacted EVERY, AND I MEAN EVERY local agent. Why?

If your work is professional and you are in an area that has some decent populated areas, you will get direct work! You also can't just talk to one person and come back and say" Nope, there is no direct work in my area"
It's there, you just haven't found it! Or, they already have one of us veterans who they are very loyal to! If that's the case just seek out NEW agents, they pop up every day and it's a perfect chance to work with a new agent who doesn't have a go to guy!

Also, I work for many different brokers and they all have very different clients, some are large, some are small. I also work directly for Wells Fargo who is my main client and we have a 50 work order capacity. These aren't lawn cuts, these are average $25,000+ jobs.

Back to the first paragraph and what got me started
(sorry for the rant but since this is a newbie thread and sticky I wanted to get some good info in here)

I am a general contractor, I can't possibly do 50 jobs at a time by myself. I sub out 95% of the work and do the other 5% myself, no employees all 1099 contractors.

I don't get my prices from some client and just take my 20-25% cut and call it a day. I get BIDS from my contractors, then I charge the bank WHATEVER THE HELL I WANT! Sometimes I make 10% sometimes I make 200%!! And I fell just fine about it, do you know why?? Because that contractor GAVE ME HIS PRICE! That's what he needed to do the job and make a profit! I don't blow thru contractors, most have been with me for 6+ years and I have never have one turn down work or not answer my calls, why? Because they make damn good money and I treat them fair.

So please get that thinking out of you head that everyone must take 20% of the set price and pass it along. It's unfortunate that is how this industry works but real contractors set their own prices!

If everyone would turn down the middlemen the agents would get even more control and more work for everyone. But, that will NEVER happen. So your only real option is to go find direct work or DO SOMETHING ELSE!

PLEASE, PLEASE, PLEASE, stop working for middlemen and then coming back to cry about being ripped off!!

RANT OVER
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post #10 of 66 (permalink) Old 12-07-2015, 06:21 PM Thread Starter
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See, that right there would make you just another part of the problem. You want to sub out work so you would take the ALREADY low pay and take ANOTHER 20-25% and pass on the PRE DETERMINED pay to someone else.

Before you start jumping all over me, let me just say that I am NOT TALKING ABOUT YOU! I said it "would" make you (or anyone else) part of the problem. You seem to agree that it would be impossible to do and not feel right about it, but you did bring up a good point and sooooo many other contractors and middlemen companies do this.

That's the number one problem in this industry and as long as people continue to accept work at a price that is determined by someone else and that work gets chopped 2,3,4 times or more then the regionals and subs of regoinals will always be around. People need to just say no!

A little background on me and my company.

I have been around for a long time and started with preservation and maintenance work with the sole intention of working up to where I am at now which is a repair/rehab contractor and I ONLY do bank work. And I ONLY work direct.

I started out many moons ago with Safeguard and MCS and that was when you could work direct with them, I think now a days you need to cover an entire state to get work? Back then there were zones and I only covered 1 and had all the work I could ever want. Once I got my feet wet I made sure EVERY broker/agent in my coverage area knew who I was and what I did. I walked away from Safeguard and MCS within 6 months.

OMG, I JUST REVEALED THE COVETED SECRET HOLY GRAIL FORMULA EVERY NEWBIE COMES TO THIS SITE FOR!!!

SORRY EVERYONE ELSE, THE NEWBIES NOW KNOW THE SECRET AND ARE GOING TO TAKE ALL OF OUT WORK AWAY!!

PLEASE DON'T BE MAD AT ME!!

Of course that was sarcasm! But I am so sick and tired of hearing all the newbies cry that we won't give them the secret because we are soooo afraid of new competition. The fact is there is no secret! It takes hard work but what I posted above is all you need to know. Just like CL said, if they are contacting YOU, instead of ME, there's a problem. I just recently posted my story about a company called AIM to shed some light to the newbies, I suggest you read that if you are new to the game and some random company calls you to offer you work.

Earlier I said I contacted EVERY, AND I MEAN EVERY local agent. Why?

If your work is professional and you are in an area that has some decent populated areas, you will get direct work! You also can't just talk to one person and come back and say" Nope, there is no direct work in my area"
It's there, you just haven't found it! Or, they already have one of us veterans who they are very loyal to! If that's the case just seek out NEW agents, they pop up every day and it's a perfect chance to work with a new agent who doesn't have a go to guy!

Also, I work for many different brokers and they all have very different clients, some are large, some are small. I also work directly for Wells Fargo who is my main client and we have a 50 work order capacity. These aren't lawn cuts, these are average $25,000+ jobs.

Back to the first paragraph and what got me started
(sorry for the rant but since this is a newbie thread and sticky I wanted to get some good info in here)

I am a general contractor, I can't possibly do 50 jobs at a time by myself. I sub out 95% of the work and do the other 5% myself, no employees all 1099 contractors.

I don't get my prices from some client and just take my 20-25% cut and call it a day. I get BIDS from my contractors, then I charge the bank WHATEVER THE HELL I WANT! Sometimes I make 10% sometimes I make 200%!! And I fell just fine about it, do you know why?? Because that contractor GAVE ME HIS PRICE! That's what he needed to do the job and make a profit! I don't blow thru contractors, most have been with me for 6+ years and I have never have one turn down work or not answer my calls, why? Because they make damn good money and I treat them fair.

So please get that thinking out of you head that everyone must take 20% of the set price and pass it along. It's unfortunate that is how this industry works but real contractors set their own prices!

If everyone would turn down the middlemen the agents would get even more control and more work for everyone. But, that will NEVER happen. So your only real option is to go find direct work or DO SOMETHING ELSE!

PLEASE, PLEASE, PLEASE, stop working for middlemen and then coming back to cry about being ripped off!!

RANT OVER
It's like we were separated at birth! Great Post!
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