If you tell someone you’re in the property preservation business, most people will ask, "What’s that? Do you preserve historic homes or something?". If you say you’re in the mortgage field service business, they’ll think, "ok they must do something with mortgages?".
I think a lot of the boots on the ground type of people, as myself, came across this business, maybe cutting grass, and was approached by someone to cut some vacant properties. "Sure, I can take some pictures and cut some grass for you, right?". While this is an important part of the business, you quickly learn it is so much more complex.
Then this company may have asked you to do some other work, remove some debris or clean a toilet. You were probably shaking your head, "what?". Then they ask you to break into a house and change a lock. You’re thinking, "what, are you for real?". If you’ve made it to this part already, you are most likely learning the hard way.
It’s important for you and your company to fully understand the complete foreclosure process and figure out where you fit in. This business can bring great rewards but there’s also much liability involved and sadly a lot of fraud. From the time a mortgage note is in default, to the property becoming vacant, you will run across some of these terms: National, Regional, Initial secure, Convey, Cash for Keys, Evictions, REO, HUD, FHA, Mortgage Servicer, GSE’s, Asset Managers, Realtors, Redemption Periods, Bankruptcy Laws, Local Laws and Regulations, just to name a few. Some of these terms hopefully scare you, as they should. There’s a lot of information, laws and rules that are involved in this business and a lot of it falls onto you, the contractor, to know.
So, what is Property Preservation?
A Property Preservation company is one that offers their services to aid in the foreclosure process from initial property inspections and possible contact with occupants, to maintaining the property, conveying, rehab, and finally selling to a new owner and anything in between. Minimizing the investors risk and protecting their interest. I highly advise anyone in this industry to join some groups associated with it and never be scared to ask questions. Read, read and read some more, HUD, FHA, FNMA, FHLMC, your local state statutes and more guidelines are available for free online with just a simple Google search. Organizations like NAMFS offer online training classes full of valuable information for a small fee.
As with any industry, the more you know about it the better you will be able to see where you fit in. Finding out where you fit in, is such an important decision in this business. I believe maybe one of the biggest mistakes for new companies, is that they let someone else dictate their actions, pricing, etc. and then become totally dependent on one company for all their income. Know your trade, your strong points, your weaknesses, your cost, and your limitations. Some pricing may work for one company and not another. You may not feel comfortable doing one service but another may. Finally, learn to work with your competition and not against them.
You alone make the yes and no decisions on where and how you best fit in this industry….
The more information you have, the easier it is to find the niche that works for you