Looking for input on expanding - REO Property Preservation Forum
 
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post #1 of 8 (permalink) Old 06-12-2013, 03:13 PM Thread Starter
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Looking for input on expanding

How has everyone who takes work in entire states branched out? Obviously I don't want to give my work up to subs in my area to keep my cash flow going. I was wondering if the best idea might be to put ads up in all the major counties and look for subs already in the business looking to take on work. And after I have a state covered then expand my coverage with my clients and look for others. Any input is appreciated.
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post #2 of 8 (permalink) Old 06-13-2013, 08:21 AM
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Hard to respond without a little more info. Are you two guys with a truck or are you an established and experienced setup? We cover multiple states but not for Nationals. Tried that once. Imagine grossing $10 and netting $5, then grossing $150 and netting$7.
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post #3 of 8 (permalink) Old 06-14-2013, 04:30 AM Thread Starter
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I would say we are established. We run 2 truck and trailer set ups at the moment and cover a pretty large area in 2 states since we live on the border. We have been in business for over 5 years now and have grown profit wise each year.
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post #4 of 8 (permalink) Old 06-14-2013, 09:02 PM
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Stay small and enjoy it. Just because your operation grows in size and coverage, doesn't mean your profit margins will respectively. Keep your pocket coverage. The hassles and headaches simply aren't worth the 6-8% of revenue growth you will see.
Just my .02

Grew up in the QC area....I sure miss the Mighty Miss!
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post #5 of 8 (permalink) Old 06-15-2013, 10:37 AM
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Expanding coverage= expanding headaches. Not worth the hassle. If your profiting 25% now with 2 trucks you are running herd on, expect to profit10% or less by doubling in size and having to run herd on multiple subs not to mention all the uploading headaches.....
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post #6 of 8 (permalink) Old 06-16-2013, 06:26 AM
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What I notice immediately when a company expands is poor completions. You have to have someone you have trained and trust to be mobile, manage and QC their properties. What I run into all the time is your workers tend to not do as well of a job because you are not there to manage and confirm that completions are in compliance. It's the old cliché (When the cats away......)Don't get me wrong I have seen it work but it takes a lot of extra work QCing properties, reviewing photos, and emphasizing the urgency of time constraints. Good Luck with your choices.
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post #7 of 8 (permalink) Old 06-16-2013, 11:58 AM
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Quote:
Originally Posted by J.J. View Post
What I notice immediately when a company expands is poor completions. You have to have someone you have trained and trust to be mobile, manage and QC their properties. What I run into all the time is your workers tend to not do as well of a job because you are not there to manage and confirm that completions are in compliance. It's the old cliché (When the cats away......)Don't get me wrong I have seen it work but it takes a lot of extra work QCing properties, reviewing photos, and emphasizing the urgency of time constraints. Good Luck with your choices.
I change the areas my guys work in so they know I might be the guy doing the job the next time. It keeps them on their toes to know I will be calling them to ask how far they had their head up their butts the last time they mowed a yard.
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post #8 of 8 (permalink) Old 06-25-2013, 08:09 AM
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If you do plan on expanding, keep in mind the additional QC person you need to hire to stay on top of your subs....the bank has one and so should you to help prevent chargebacks by the client. Also, you are going to need a processor or two, or three. An office to accommodate all of this if you don't have one already, etc. The money doesn't get better because you can take entire states. If anything, it gets worse. Look carefully at the infrastructure required to run an operation like you are talking about, save enough to start up and run for a year and a half. Then and only then should you attempt this. Do not use credit. I have watched a friend of mine do this, and after being in business for 17 years, he made the move. He invested around 85K for initial start up. Operated for almost three years, and then.......doors closed. Many factors involved, but my point is, research it closely. He paid cash for everything all along, so at least no debt remains, but he got so caught up in work, he failed to do proper research. Ultimately, SG caused his demise. He should have seen the writing on the wall a few years ago, and not put all his eggs in that basket......well, he shouldn't have put them all in the Bank of America basket.
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