The recent real estate crisis has left cities, towns and neighborhoods with real potential as well as real problems. Alan Jaffa and Safeguard Properties see both the potential and problems as growing business opportunities.
Founded in 1990 by Robert Klein, Safeguard Properties has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest to the largest mortgage field services company in the country today.
“I’m not going to dismiss the fact that the housing crisis had an increase in our volume,” says Jaffa, who became Safeguard’s CEO in May 2010. “Some have said, ‘Wow, Safeguard. You got into this business at the right time.’ We’ve been in this business 24 years and we’ve seen growth every year. We’ve seen growth over the last handful of years due to new clients, an acquisition and an increase in volume because default rates have gone up.”
Providing services in all 50 states, the Virgin Islands and Puerto Rico, Safeguard employs 1,700 people and is supported by a nationwide vendor network trained and qualified to perform a full range of inspections, property preservation services, maintenance work, and repair and rehab services.
The more than $1 billion company sits atop its industry, and Jaffa is continuing to find ways to keep the company in the No. 1 spot.
“The timing of the shift of me becoming CEO was an interesting time in our industry,” Jaffa says. “Safeguard has always had phenomenal growth, but during the mortgage crisis our growth certainly spiked. A year ago we did an acquisition that gave us substantial growth as a company that continues what this business was really built on, staying true to the core of what it is that we do.”
Now Jaffa is building off that momentum and looking toward the future.
Find new opportunities
While Safeguard was anything but lacking growth, Jaffa knew there were chances to grow the company in new ways. In 2012, Bank of America offered Safeguard that chance.
“Bank of America, through its Countrywide Financial Corp. acquisition in 2008, acquired a field service company that conducted similar processes to what we do, but strictly for Bank of America,” Jaffa says. “BOA has been divesting itself of many of those acquired affiliates, and we purchased their field service company, Bank of America Field Services, in September 2012.”
Bank of America needed to ensure that it was partnering with the right buyer, since the deal would be a long-term relationship.
“BOA viewed us, as others do, as the industry leader,” he says. “When it came to protecting and preserving their assets, they wanted a partner, and hence sold their field service company to the industry leader.”
From a volume perspective, gaining Bank of America as a client has almost doubled the size of Safeguard.
“The acquisition created a buzz and energy in this company that was different than what our typical growth has created before,” Jaffa says. “Now that we’ve done this acquisition, and it has doubled our business, we can’t lose focus of Safeguard Properties and what it is that we do here.”
The Bank of America acquisition was the first that Safeguard has done. The company has built its growth through customer service, relationships and organic growth.
“Our growth has been through the reputation that we have built for ourselves and gaining additional clients,” he says. “That is how we have continued to see growth. Of course, we have expanded our services. Twenty-four years ago, the services may have been a lot smaller in scope of what we do today for our clients, but we are still very focused on the property and preserving and taking care of that property.”
Like anything else, the needs of Safeguard’s clients and of this country when it comes to housing have grown. The company continues to support those needs while determining what it needs to do next.
“It comes down to surrounding yourself with the right people, and people who are smarter than you are,” Jaffa says. “This company would not have had the growth that it has had without having the right people in place.”
Jaffa says another key is staying true to your core values. Despite how much Safeguard has grown, Jaffa isn’t straying from those values.
“We’ve become a large company,” he says. “Walking in here every morning and leaving at night, I never let it get to my head that we’ve become so large. I know I am the same person walking in here every morning, and I’m the same type of person walking out as I was 19 years ago. Sometimes you see too many executives who let that get to their head, and you can’t let that happen.”
Despite Safeguard’s ability to grow each year and work its way to the top of its industry, the company has still faced challenges. With so many of its employees out in the field, technology has been one of its biggest.
“Technology for us has been phenomenal,” Jaffa says. “However, every six months technology becomes outdated, and keeping up is a challenge. As a company we have been extremely aggressive in our budgeting and spending to be in front of technology, because it is a huge driver for us in order to continue on the path we are on.”
Technology can be your biggest friend or your biggest challenge. It’s all on how you attack it.
“We can’t get our job done unless the people in the field get the work done,” he says. “The days of paper are long gone. We are in an environment today where we expect responses from people at properties in the field. The mobile technology is tremendous in our space. Real-time data from the properties is what we’re working on, and some of that is in place today.”
Safeguard’s mobile technology enables the company to get quicker responses from the field, quicker responses to its clients and quicker reactions from investors, which ultimately protects and preserves a property.
“It’s a win-win for everybody,” Jaffa says. “The old days of you telling me a condition and it bouncing around to different people could have been a 14-day process. We’re in an environment where neighbors, cities and our clients want real-time resolution, and the only way you’re able to do that is if we’re able to communicate from the field.”
Staying on top
While Safeguard has done the things to make it No. 1, its position in the industry means others are biting at its heels trying to dethrone the company.
“Every industry has competition,” Jaffa says. “You stay No. 1 by staying true to what you set yourself out for. We didn’t become No. 1 because of our looks. We became No. 1 because of our creative thought process, being in front of issues before they became issues and giving our clients the level of service that they required.
“Competition is healthy. It keeps everyone on their toes. We’re in an environment where everybody wants options and we’re going to keep doing what we’re doing and our competitors are going to keep doing what they’re doing. As long as we stay true to what we started this company out as we’ll be fine.”
One of the differentiators is how Safeguard has partnered with and built relationships with local communities where the company works.
“Our competition continues to try to follow that model, but it’s more reactive from their standpoint rather than proactive from our standpoint,” he says. “Some of the largest cities in this country know us and know they can pick up the phone when there is an issue at a property and that we’ll take care of it immediately.
“People think it’s just foreclosures, but we’re really protecting neighborhoods against vacant blight, against unsecured, unsafe properties around this country. If we weren’t around, the country would be in a lot worse shape than it is with the horrible housing crisis that we’ve had.”
According to Safeguard, tens of thousands of dollars in home value, up to 30 percent of the value of the home, can be negatively impacted by a vacant property on the street. When those properties have problems, it can negatively impact the tax valuations and become a bigger burden on the municipalities.
“When these homes are protected, it upholds the value because it doesn’t negatively impact the surrounding properties and cities aren’t sending someone to cut the grass or deal with the code enforcement violation,” Jaffa says. “It lessens the financial burden on municipalities’ budgets.”
As the housing crisis continues to fix itself, Jaffa and his team at Safeguard are once again looking for the next growth opportunity.
“One of the things that we are very aggressively contemplating is doing additional acquisitions,” he says. “Between our people, systems and our network there are a significant amount of opportunities for us to take advantage of and diversify.” ●
- Take advantage of opportunities outside of organic growth.
- Tackle challenges head on and always be looking at what’s next.
- Build your business by staying true to the values it was founded on.
The Jaffa File
Name: Alan Jaffa
Company: Safeguard Properties
Born: Brooklyn, N.Y.
Education: He took college courses but did not earn a degree.
What was your first job and what did you learn from it? I ran a freight elevator at a Wall Street building that my uncle managed. As a 16-year-old kid, I had the fortune to interact with a lot of business people. What struck me was that some of the most powerful people were also the most humble. They took the time to talk and show respect to everyone, regardless of their role or status. That’s always stuck with me.
What is the best business advice you have received? Surround yourself with the best people and trust them to do their jobs. Nobody knows everything, and the more you can rely on smart and talented people, the more successful you’ll be.
What do you see as the most important thing Safeguard does for a property? What happens to one property happens to the neighborhood and community in which it exists. When we protect the value and condition of one home, we protect the value and quality of the neighborhood.
If you weren’t a CEO, what is something you have always wanted to do? What I enjoy is talking to budding entrepreneurs who are looking for guidance to start or grow their companies. We have a lot of talented people in this community with good business ideas. It’s gratifying to offer some perspective, and I find I learn a lot too.