Separating the Signal From The Noise

One of the hardest things to do in forecasting Industry data is to Separate the Signal From The Noise.  This is an intelligence term which means to fine tune the wavelength.  The same is true within the Property Preservation Industry (PPI).  We have been spending weeks pouring through data issued by domestic and multi national firms pertaining to the housing market.  Above and beyond the rhetoric, we tracking trends of the housing markets creeping up.  So, what does that mean for you, the Contractor?

Well, let’s take a look at JPMorgan.  The are pretty bullish on the fact that housing prices are going to rise.  As a matter of fact, JPMorgan was quoted that housing prices could climb “…9.7% in 2013… .”  Now, for a down economy facing a fiscal showdown in March, that’s downright impressive.

That’s well and good that Equity Firms are going to make money.  How do I make money in the Industry?!

Glad you asked!  Foreclosurepedia is predicting that you are going to see a tremendous uptick in private investment firms purchasing bulk real estate with specificity to the foreclosure markets.  Accurate information married with human judgment is the best ally for the prognosticator.  Now, what the prognosticator (that’s me and folks whom do what I do) does with that information is the determining factor as to whether or not it is a viable end user product.

At the end of that day what are you recommending we do?  I believe that it will behoove the Contractor to enter into a subsidiary market, for want of better language.  Currently, the average Contractor has a basic set up to accomplish property preservation.  For the Contractor whom is going to come out of the downswing in pricing, they are going to have to shift gears into the rehab market.  So, depending on jurisdiction and Client, this is going to require that you either obtain a General Contractor’s License or pair up with one.  Second, they are going to have to line up subcontractors in all facets of Trades whom are willing to meet specific deadlines.

Personally, I would suggest that Contractors work a deal with a licensed General Contractor and simply move a percentage of the Contract to them for use of the License.

Over the next several days, we are going to put together a series profiling the Game Changers in this field.  We are also going to reach out to the Nationals and NAMFS and get their take on this and schedule some interviews for Broadcast.

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