I’m sure a lot of you have been searching for a way to squander your family inheritance or otherwise alleviate the burden of having too much money to deal with. If that is the case, I want to congratulate you on your Google search skills. You have found the perfect place to gather more information on how to get rid of that cash!
You may find it hard to believe that what I am telling you is true: that you can stop searching; your search has ended – but if you can take the information I give you and really apply it, you will finally find a way to lose money. If you so desire, you might even be able to file bankruptcy or even better – die a pauper.
A good place to start is with Lesson 1: Losing Money With The Second Bid
I know your heart’s thumping so let’s dive right in.
First you have to be in the property preservation business to take advantage of this real loser. Well maybe you don’t have to really be in the property preservation business but you have got to find a way to let the national mortgage servicing companies know that you are seeking second bid opportunities. You see, HUD requires second bids on a lot of services. Sometimes it’s sort of like the job notice on the company bulletin board: the lucky employee has already been picked but the notice has to go up on the board anyway just so everything looks like its on the up-and-up.
This is so simple I’m almost ashamed to even post it but since you was searching Google for it anyway! It’s really hard to fail to lose money no matter what you do concerning a second bid but there are ways to guarantee success. What you are looking for is to get a request for a second bid from a company that you have never worked for before. That’s right; the very first opportunity they send your way is a second bid request. I don’t know the acutal mechanics of how it works but I’m pretty sure it goes something like this:
You see, their primary contractor in your area has already sent in their bid and it was forwarded to HUD; but somehow somewhere along the way it was noticed that a second bid was required. It’s probably based on a percentage thing – if all work requires two bids, then an alarm probably goes off somewhere when the percentage falls below, say 18%.
Now panic sets in. The national has already figured their profit on the other contractor’s bid and now someone at HUD wants to gum up the works. No problem, look on the list to see what contractors are in the area. What list? The “Dummies Standing In Line To Lose Money” list. Oh wonders of wonders, it’s your time. You’ve finally floated to the top of the list.
Now a moment you need to cherish: you get a call from a very polite and soft-spoken contractor co-ordinator or someone with something of a title like that. They ask if you would please do a second bid for them; or they ask rather meekly if you would possibly have the time to run by this address and just give your professional and experienced opinion in the form of a bid. No kidding! You need to burn this moment into your consciousness because it is the very last time you will hear the word “please”, the word “professional” or the word “experienced”. And, to boot, it’s the very last time anyone at the company will be polite and speak softly to you. In fact, it is probably the very last time you even talk to this “co-ordinator”. Proof once again that life’s most cherished moments are indeed no more than fleeting snapshots of time.
Okay. You’ve got the assignment. Now what? Well, first let me point out that you are already losing money on this second bid assignment. A lot of contractors do not take into account the little things like the ten minutes on the phone, the monthly payment for the phone, the computer and the internet connection that allowed e-mailing of the assignment, the cost of the chair they are sitting in, the cost of the conditioned air in the building they are in, the cost of the building, insurance on the building, insurance on the vehicle you use to go to the property and so on. You know – the little things. However, just trust me on this: you are already losing money and at a rather quick rate. Oh by the way, you accepted the going rate of $25.00 for a second bid.
Now this is the secret! You could just stop right here and do no more at all. Yep, that’s right. Even if you don’t do anything else you probably have already lost a great deal of money. However, I hope you don’t change the way you do things just because you’re trying to get rid of those dollars. Please don’t lower your standards.
Here it is in a nice, tidy little two sentence paragraph: The more professional you are in performing this second bid the more money you will lose. The more professional you are in performing this second bid, the quicker you will lose money.
It’s a time and materials thing. You see, the unprofessional contractor will scream out to the property and take the minimum amount of pictures and go home to email them; say four pics total. The unprofessional contractor will jot down a bid on a piece of paper and fax it in or maybe send a quick note by email. Done! Boom! Twenty-Five bucks and all pure profit. Right?
However, you, the professional, are going to take your time and look at the property as if you was buying it yourself or at least as if you was going to hire someone to come in and do the work. Each picture is worth a thousand words. Think they would like to know about that torn carpet and the holes in the wall? Three pictures. What about the rotting food dripping out of the hot refrigerator? One picture. Uh, oh! Is that dog feces in the closet? Two more pictures. Think the company might say I’m liable since I didn’t tell them about the broken hinges on the door? Two more pictures.
When you get home or to your office, you write a narrative of what you saw and you may even include a couple of hand-drawn diagrams. Your standard comprehensive form is completed and you file copies of everything for future court cases. Now it’s time to name and organize the pictures and get everything transmitted to the company.
Let’s take a look at how we’re doing on the money:
What are your fixed expenses? Add up your yearly total for all insurance needed, all utilities, all mortgage or rent payments, all property taxes, vehicle payments and maintenance and all those other “little things”. Take that total and divide it by 365 to see what amount of money goes out everyday just so you can set in that chair and wait on that phone call. You’re going to be surprised. I suspect that for even the smallest mom and pop outfit you’re going to get a figure of about $41.00.
See I told you you’re in the right business if you want to lose money. If this second bid assignment is the only thing you get today, you’ve already lost $16.00 just by being in business. However, you can lose even more. That is your objective isn’t it? Go crank up that V8 and drive thirty miles to the site and back – there’s another 5 bucks down the tubes.
I think you can see what I’m saying here. There are tremendous opportunities to lose money here. Heck, some of the national mortgage service companies have even found ways to help you lose. They came up with neat ideas like saying they went through your invoices for the last three years and looked at the associated pictures. From the pictures of 2121 Main Street that you serviced two years ago, they determined that your invoice for removal of 7 cubic yards of debris must be wrong. The pictures look like it was only 5 cubic yards. So, to help you out, they are going to deduct two times your state’s rate from the payment they are sending today – the payment for the work you did 66 days ago. Jeez, what a business partner. Where else can you develop that kind of relationship where one is willing to go back one-by-one and take the time to verify the pictures even! What a business!
Alright, I’m going to stop here. There is more. Much more but let’s let this session soak in for a while. I’m probably going to write a series of articles on the subject of how to lose money in the mortgage field services business with emphasis on the property preservation side of things.
Try to catch my next article “How To Lose Money On Grass Cuts”. Stay with me a while and I promise that following just a handful of the suggestions in these articles will absolutely guarantee that you can wipe out that bank account in no time.