Property Management by Scott Bolinger

Copyright in 2011

by

Scott Bolinger of Alliance Nebraska

All rights reserved. No part of this book, doc, or CD may be reproduced in any way, shape, or form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system without permission in writing from the author Scott Bolinger. If bought as an ebook, you may make one hard copy. The forms and tax forms may be copied as many times as needed for the person that bought this book for personal or business.

Disclaimer

The publisher and author of this book are not responsible in any manner whatsoever for any income loss. What is stated are several ideas that have worked in creating income. Sometimes it takes money to make money.

Published by:

Scott Bolinger

Address: 507 Niobrara

Alliance, NE 69301

Phone: 308-760-7346 Email: [email protected]

Website: www.LarryBolinger.com

Website: www.WarriorRage.com

Revised December 2013

Revised April 2014

Revised 2018

Revised 2020

Revised 2022

About the Author

Scott Bolinger has been a business owner for over 15 years, and has been investing in investment properties for over 10 years, and started in preservation work and field inspections in 2006. He has a background in Carpentry, locksmith, and masonry that started in the AirForce in 1987. The property investment went from starting from scratch to over $500,000 worth of investment property.  Is the author of several books, business books, martial arts books, self-defense books, and history and 2018 Congressional candidate from Nebraska.

Introduction

I’d guess since you decided to buy a copy of this book that you’re a business-minded person that wants to get straight to the point and create an additional cash flow. There are several ways to create income in property management. The business I’ll be going through is as a Contract Inspector and there are many aspects of a contract inspector that covers field inspections, property verifications, merchant site inspections, and preservation which consists of contract work with asset companies to bring the foreclosed property up to FHA/HUD regulations, and some standard tidbits of property management. You don’t have to do everything, but I find it best to diversify your income. The companies you would be working with are contracting companies that work with mortgage companies or realty brokers, asset companies, and banks and in some cases, you might work directly with the mortgage company.  Primarily what a field inspector would do is perform property verifications. This would have you going out to a property and verifying that someone still lives at the property in which you would take one picture of the front of the house, maybe a picture of the address and down the street, or to do interior and exterior property inspection of a property that isn’t occupied and you would take pictures on all sides of the outside of the building and two pictures per room and place bids on anything that makes the building non-compliant (not up to FHA code). For the preservation work, you would make sure that the building is secured and complies with FHA guidelines. For the Preservation work you would take pictures of all sides of the house, then 2 pictures per room in the interior.  You’re usually given a list of tasks and you would take before, during, and after pictures of work that was approved to be completed. For preservation work you would be primarily doing winterizations, securing a property, yard work, maid service, disposal of hazardous material...etc. Sometimes the preservation work isn’t just limited to FHA guidelines, sometimes the mortgage companies, realtors, or asset companies may have general remodeling that they want to be done, or maybe the city building inspector may have written up work that’s needed doing, which would get approved through an asset company.

Content

Chapter 1

Intro To Property Preservation

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In property preservation, there are 3 primary areas for work.  Inspections, Property Preservation, REO.  The inspector or field inspector will do a general inspection of the property. Either just an outside inspection to do a property verification or occupancy verification to see if someone still lives at the property or if it’s been abandoned. Along with the field inspector side of that business is the interior/exterior inspection. When you do an interior/exterior inspection you are mainly looking to see if the place is still secured and in compliance. You would check to see if there are any safety hazards, roof leaks, or water leaks that could cause more harm to the property, and you point out any issues of vandalism. Some inspections could be insurance loss inspections. That type of inspection is when a homeowner received damages to their home from a storm. You would do the inspection and verify the completed work. Some inspections may be to inspect a business. Most business inspections are to verify its existence to help that business get approved for a credit card reader.  And then there is the maintenance part of the preservation which would be to secure a property, winterize, yard maintenance, maid service, and bring a house up to FHA code. On the first interior / exterior inspections you want to do a very thorough inspection of the property. If you’re not approved to do the work, then you make bids to do the work. Some prices are pretty standard. Like lock changes, installing a lockbox, installing hasp and lock, dry winterization. But some things may have some flexibility like debris removal, initial yard maintenance, and maid service. So in certain circumstances, you might consider one bid set out with separate prices with the total, then a total bid as a bundle package with a discount for the packaged deal. I do have a standard list price in this book, I wouldn’t go much out of that range. I would not recommend bidding lower than the prices I provide.  Things you’ll have to consider when doing your bid, are travel, material expense, and room and board if you have to stay out of town for 2 or 3 days and the percentage the asset company is going to take. So if they are taking 20%, then add an extra 20% to your bid. If they are going to take 50%, then double your bid price.  There are two areas of the foreclosure process. One is the pre-foreclosure. In a pre-foreclosure, a contractor can only sure one door, do limited work, and do a report. In a pre-foreclosure, a mortgagor can reclaim that property. This property is assumed abandoned before any work is completed. The property is verified abandoned by the inspectors. After the property is sold or acquired by the bank, then it is considered foreclosed. The bank has all rights to the property. Then they will make the order for a full cleanout with a list of allowable jobs that could be done to the property to bring it up to FHA code.

Definitions

Drive-by inspections (property verification or Occupancy Inspection): this type of inspection is done to see if someone is still living at the property. And you take one picture of the front of the house, one of the address, and a picture showing down the street and street sign. A lot of companies want you to take double pictures, which is good practice. It decreases the chance of a blurry photo. The form you get for this type of inspection will generally ask for a description of the house which would cover type and color of siding, type of covering on the roof, estimate value of the property, visible personal property, any broken or boarded up windows or doors.  If the property is vacant then you would usually do a full exterior set of photos (all 4 sides of the house, down the street, street sign, address, gas meter, electric meter), and sometimes the inspection would require to check with a neighbor to confirm that it's occupied or not. In some cases, if it's vacant then you would post a vacancy sticker on the window.

Interior/Exterior inspection:  Take pictures of the outside and all for sides of the house, down the street, pic of the gas meter and electric meter, roof pics, and then take two pictures of every room, and picture of the ceiling and floor of each room, pic of the water heater, furnace, and water meter.  Jot down any issue that would be needed to bring the property up to compliance (securing property, boarding windows or doors,  removal of hazardous materials, property inspections,  any safety hazards, trip hazards, rails needed on the stairway, yard maintenance)

Merchant site inspections: this would be an inspection on a business to make sure it’s legitimate.  This is usually a by appointment inspection. Usually consist of 5 exteriors and 5 interior pictures, making sure you take a picture of all 4 sides of the exterior of the building and pictures of the sign. In the interior, you’ll usually need to take pictures of the general business area, main office, picture of where secured documents are kept (usually a file cabinet),  and inventory. A lot of times you’re there to qualify a company to use or continue the use of credit cards readers, so you’ll take pictures of the credit card machine.  The inspection is to check to make sure the business is legitimate. I’ve had several for auto sales to qualify them to be able to contract with a company that does background checks so that they can set up the loans themselves.

Inventory inspections: inspection of inventory, taking pictures, and writing down serial numbers to confirm the correct item. Inventory inspections would be done on stores or restaurants. It is usually about a $300 job.

Insurance Loss Inspections: inspection of a building that has had weather damage. Usually take an average of 30 pictures.  Collateral inspections, rush inspections, construction site inspections, occupancy inspections, commercial inspections, and delinquency inspections.  Out in Nebraska, I get a lot of inspections for hail damage, and the most common is roof repair, siding, gutters, and down spouts. You’ll take pictures of completed work and work that still needs to be done and whether or not there satisfied with the work that has been completed.

Collateral inspections: this would usually be for construction equipment that someone has rented. The last one I did was an excavator. You’ll need to take several pictures at a  distance and several up-close pictures of all sides of the equipment and the serial number.

Rush inspections: a rush inspection could be any of these types of inspections but you’ll generally have 48 hours to complete. But you’ll charge a higher price for the limited time frame

Construction site inspection: This may be a few different things, maybe a percentage of completion on a job, or an equipment inventory.

Occupancy inspections: same as a drive-by inspection. This is just to verify occupancy

Commercial inspections: this could be to verify the legitimacy of the business just like the merchant site inspection or inventory inspection

Delinquency inspections: these are usually on vehicles and you would generally take pictures of all sides of the vehicle and the VIN number and do an interview

Preservation and REO: generally when called on this type of inspection, it may be assigned as a preservation work order. This could be on an abandoned house that went back to the mortgage company, reversed mortgage, or foreclosed property, or a property that a broker bought and contracted you to do an initial. An initial would be a first-time clean, yard maintenance, secure, debris removal, winterization if in season. So you would go in and secure the house. Change the locks to a specific key code and secure any