Chapter 1: Overview Of The Field Service Business

A Little History About The Field Service Industry

James was a pretty good handy man and was doing quite well for himself. In fact, he had managed to save a little money and remodel his cottage.

On July 4th, of 111 BC James had an interesting conversation with a gentleman named Benjamin. Benjamin asked James to loan him some money in order for him to build a summer beach house at Dauphin Island Alabama. After several meetings and a lot of talk and two and one-half tons of paperwork, James agreed to loan the money to Benjamin. The paperwork spelled out that Benjamin would repay the loan on a timely basis, with interest of course. It was also agreed that James could consider himself as having an interest in the beach house on Dauphin Island since he would be investing money in it.

As soon as Benjamin had paid back the loan, James would no longer have any interest in the beach house but until that time he had the right to have some say-so about the house so he could protect his investment. James knew about hurricanes around the Gulf Coast not to mention beach erosion! After all, Dauphin Island is an island sticking out in the Gulf of Mexico! James was not going to let his investment go down the Gulf of Mexico drain!

Time marched on and James began to wonder if he had been smart investing in this beach front property. James lived in an area far removed from Dauphin Island. In fact, he lived in what would later become the state of Washington very near what would later become the Boeing Aircraft plant. Since he was so far from Dauphin Island, Alabama, he decided that it might be smart to find someone to go by the beach house on Dauphin Island and give him a report on the house and the neighborhood.

James found an independent contractor, a field services type of person that did this type of work. In fact, he lived on Dauphin Island. The inspector drove over to the house, found it occupied and in very good shape and reported all of this to James.

This is the origin of the field inspection business. At least this is the story I was told, and I have little reason to doubt its authenticity. By the way, Benjamin’s house is still on the island! You will not believe how much it has appreciated in value! Of course you can fast-forward through the years and see how the field inspection business has grown over the years. Lots of people saw the wisdom in what James had done. They too loaned money, began insuring boats, homes, businesses, motorcycles, and so on and so forth.

The next thing you know there were hundreds of independent field inspectors out checking on all kinds of things.

Anticipated Increasing Need For Field Service Firms

Field inspectors are needed in all areas of the United States. There is no central location that gathers and distributes information about the Mortgage Field Services business. However, you may want to visit one of our other web sites where we try to keep everyone informed. We gather and distribute some information about the mortgage field services business. The site is at www.Field Inspectors.com. One can not just get the figures off the internet, out of the newspaper or any other place. You will have to do your own research to determine how likely it is that your area could use another field inspector. Let me help you with that research just a bit. Let’s investigate the lowest paid, but most consistent type of field service you may perform: residential mortgage inspections. For now we will forget about construction inspections, merchant site inspections, loss control inspections and all the others.

1. First let’s see how many people live in our town. If you do not have a rough idea of the population of your town or county, try going to US Census Bureau. I looked up Mobile County Alabama and found that there are 401,427 people in the county.
2. Let’s find out what the current house payment delinquency rate is. How do we find out? I went to Google and typed in “mortgage delinquency” and got back a bunch of sites talking about mortgage delinquency rates. Hmmmm, seems the present delinquency rate is 4.70%. Check behind me on this now, 4.70% is the same as .0470.
3. OK so far. Now, take the 401,427 people and divide that by the average number of people in a household. Ya’ sweatin’ yet? Again, the census bureau told me that the average family size is 3.14 people. Divide 401,427 people by 3.14 in the average household and you wind up with 127,842 family residences. Now, some of these households will be renters but I am trying to keep things simple.
4. Of these 127,842 family residences, 4.70% are delinquent on their mortgage. 4.70% of 127,842 is 6,008.
5. Just so you’re comfortable with this, let’s say that not every lending institution will issue a delinquency inspection and no lending institution will request delinquency inspections on every mortgage. Let’s make it more than feasible and take only 25% of the 6,008. The 6,008, by the way, is a very real number; look at the facts and the figures. 25% of 6,008 is 1,502.
6. I don’t think there is any way you are going to get all 1,502 delinquency inspections right off the bat. In fact, I’ll bet there are at least two other mortgage field service reps in your town now. What’s realistic? Well, if the companies are very happy with the present reps, you may get zero percent. More than likely, they will like the idea of having you as a backup rep (see tier system), or you quote a lower fee and they are willing to try you out. Let’s go with 33%. If you get 33% of 1,502 mortgage delinquency inspection requests, you will be assigned 495 inspections. (If the company takes a total of 33% from two other reps, which is 16.5% apiece. In the future when you see your work fall off 16.5% you may have a clue as to why.)

Don’t work too cheap. $4.00 is too low, but 495 x $4.00 = $1980

How about $5.00 ? 495 x 5 = $2475.

Let’s get our inspection rate up where it’s kind’a interesting; $7.50 x 495 = $3712.50. Not a great amount of money but not bad for a couple of days work. It would take me 4 or 5 days to do these. It would take my daughter only 2 or 3 days. She is young, she is experienced and she is fast. She paid for six years of college tuition doing mortgage field inspections. Hey, I’ll even give you a bit more slack. Let’s say it takes me 10 days to do all this. That gives me about 20 more days in the month to do some insurance loss inspections, merchant site inspections, do a little mystery shopping. I may even venture out and do a specialty loss control inspection like a pig farm, cattle ranch or horse ranch.

Yes, I would say it appears the services provided by an independent field inspector will always be needed and I feel there will be an increasing need because:

• People build houses: construction loan inspection
• People insure houses: insurance inspection
• People finance boats: boat inspection.

Okay, see what I mean? I guess the main reason I decided to start a field inspection business years ago is because someone told me “when the economy is good the field inspection business is good; when the economy is bad, the field inspection business is great“! As our economy fluctuates, certain things take place along the way:

• There will always be buyers and sellers, new business owners and those going out of business.
• People will always need insurance or need to change insurance coverage. All of these activities and changes create an opportunity of some type for field service organizations.
• If the economy goes sour there will be more delinquencies on residential mortgages, vehicle loans and other consumer loans. More delinquencies means there will be more field interviews and inspections.
• When mortgage rates fall, there will be more re-financing and that will create more mortgage and insurance inspections.
• When there are accidents and disasters there will be a need for insurance loss inspections and damage inspections.

There is always a need for some type of inspection both in good times and bad. Some inspection needs go up in bad times while other inspection needs decrease. There is continuous up and down fluctuation in the economy and in the inspection business.