Hi,

I'm new to property management and doing some research into property preservation. Can someone with experience take a minute to answer the following 2 questions?

1. Regarding REO's, do banks only work with property perservation companies who also offer to handle selling the REO for them?

2. In starting a business in this narrow niche, would I be in over my head anyway? Here's my background and idea: I am considering starting a preservation service but I don't want to handle selling, even though I recently received my real estate license, because I figure it is better to start by focusing on a niche like helping banks avoid municipal fines for their REO's 'going to seed'. I have some construction and landscape experience, but no property management experience (that's why I don't want to initially deal with sales or tenants; also, this is why in my first question I'm wondering if the banks could be my customers, or would I likely be able to subcontract to bigger property management companies).

Thank you so much!
Mario Amodeo
Lasker5@yahoo.com

Most of the time when you are starting out you really need to sub for the national companies. Though still try to find agents who deal with REOs. If you could get connected with agents, the profits are much better. The nationals will give you work but the prices are low.
Also don't forget to check your area for what licenses are needed. You will also need business insurance.
Hopes this helps and good luck.

richb,

Thank you for sharing. However, I'm a little unclear about what you mean by 'agents'. Are 'agents'

1.asset managers at a bank,
2.asset managers at a property management company, or
3.real estate agents/brokers already managing the property and trying to sell the REO?

The reason I ask is that I'm still trying to find out if banks only deal with PM's who can also sell the REO. I imagine my confusion shows my ignorance!

Thanks,
Mario Amodeo
Lasker5@yahoo.com

Mario,

Few if any Property Preservation contractors sell homes. I think I'd be correct in saying that none do. The following is a brief explaination of how this industry works:

1. Home enters forclosure
2. Banks deligate work orders for inspection and property preservation to national brokers (the "Nationals")
3. The Nationals deligate work orders to either regional brokers, local brokers, or local contractors.
4. The local contractors actually perform the work order and submit results to the local, regional, or national brokers.
5. The brokers submit the results to the banks.

To confuse matters, the banks also deligate work orders to real estate agents (Realtors), but from a contractor's aspect, they're less reliable on payment and a greater risk. There also seems to be a trend of the banks moving away from deligating work orders to agents directly.

Right now you're looking at a giant tree with no understanding of how the roots deliver water to the leaves. The only way to firgure it out is to climb the tree and go out on a limb.

Good Luck.

Ahhhhhh...the teacher appears! Thank you, New Leaf PPS!

Taking the time to spell it out for me (how this industry works) was very considerate of you. I'll have to pass it on someday.

Come to think of it, Real Estate/Property Management brokers avoiding (or outsourcing) preservation responsibilities to concentrate on renting/selling of REO's makes sense.

So Safeguard would be a typical example of a national broker I guess. And Premiere, who I understand sells Wells Fargo REO's, is not a 'National Broker' because they actually sell REO's? Perhaps there is some overlap and Premiere is sort of a 'in house' hybrid. As you pointed out, 'jumping in' will clarify all this in my head.

Hmmm, decision time. Seems like it's always decision time!

as a startup, there's no way you'll get PP contracts directly with the banks.

The tree analogy is the best quote I've ever heard!

I have years of experience preparing properties/apartments for rental/leasing
Have all the trade tools necessary for Property Preservation along with the experience - Interior Rehab,
Janitorial – Make ready for showing and/or occupancy and Landscape & Restoration

I am in the VA/DC Metro area
I would like the opportunity to do the work for properties preservation projects.
Thanks