I need help in starting a foreclosure cleanout company

Asked by Deborah Mitchell, Keystone Heights, FL Wed Jun 4, 2008

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35
Heather Paul, Agent, Santa Monica, CA
Thu Oct 21, 2010
This is a good business and definitely needed in the current real estate market, we work with many vendors daily. One standard you will need is to make sure you have a business license and general liability insurance, $1,000,000 is the standard policy in the industry. I would recommend contacting the local real estate agents "Reo agents" in your area, they are very easy to spot and they have the bulk of the listings in majority of areas currently. Then, create a flyer and email it to them or stop by there office, do know they are very busy and try to be brief. Offer them a discount and a lot of times they will try you out. Also, register your company with the Mortgage Lenders "Banks" and Asset Management Companies, they also use Reo vendors.

I would recommend finding as much free information about this business before you get started, try the foreclosure cleanup network. You will also need to learn how to price your jobs accurately as not to over-price or under-price your bids. Remember, this business involves hard work, but generally they pay very well for these services.

Good luck in your new business enterprise.
3 votes
Alex & Carlos…, Agent, San Diego, CA
Mon Feb 22, 2010
Deborah,

I wrote an article about this a while back and put a list together of vendors.

I refer the contractors who come to us looking for work to the article because we really don't have any control on who the bank uses. Please click on the link below for additional information.

Thank you and good luck.
3 votes
Anabelmeo, Home Buyer, Atlanta, GA
Tue Aug 18, 2015
While we do have local agents as clients you may want to try and get approval from a company called
"Field Asset Services" They contract with the bank and sub to you for foreclosure cleanup work.

Having the right pricing strategy is an area that cleaning business owners struggle with the most. One on hand, you will want to make sure prices for your services are competitive. On the other hand, you need to make sure you generate profit so that your business continues to grow. For residential foreclosure cleaning services, the pricing method used is usually by the hour.
Reference: http://ForeclosureIQ.com
2 votes
ron parker, Other Pro, chicago,, IL
Tue Dec 8, 2009
Well, it is not as hard as you might think! I actually have a very successful foreclosure clean out business and I learned all that I needed to know from the website below! Just make sure that it is something that you really want to do! it can be a very nasty job!
Web Reference:  http://tinyurl.com/yhococ8
2 votes
Tommy, , California
Fri Dec 4, 2009
it took me a while to find the right course for starting my own business cleaning foreclosed homes. I usually don't trust any course, but i like the idea of cleaning foreclosed homes...I tried 2 websites training guide, but i was disappointed.
But i found a good training course on this website http://www.foreclosurecleanup4cash.com is the one that finally helped me...what is good about this website is that in addition to the large raining guide they have over 16 step by step videos teaching everything needed about this business. I already landed 16 jobs in 2 moths.. I usually don't recommend anything for any one, but since i wasted money on worthless training courses for foreclosure cleaning business, this is the only course i would recommend
2 votes
Debra LaPlan…, Agent, Freehold, NJ
Tue Jan 19, 2010
Put together a brochure, business card or flyer to hand out and then visit every real estate office in your area. Helpful business solutions are always welcome! Offering a first-time Special Rate to get your foot in the door doesn't hurt either.
The Best of Luck to You!
1 vote
Robert Newton, , Scottsdale, AZ
Fri Jan 15, 2010
pick up the phone and call every realtor that you can find. if you do quality work people will talk and the business will find you
1 vote
Tommy, , California
Wed Oct 21, 2009
the one my brother found was called http://www.foreclosurecleanup4cash.com
he already got 3 contract... i think i'm going to be helping him... i think it is a good business... he got videos and bood of how to do it also his advertising was handled by the that website.. i am jealous
1 vote
Researchanal…, , California
Fri Sep 11, 2009
Deborah you can start by setting up a website, listing the services your company offers, place ads in classifieds, get bonded and insured, get a business license and determine if you will work locally or nationally, join the The National Association of Mortgage Field Services, Inc (NAMFS), Mortgage Bankers Association of America (MBAA), and U.S. Foreclosure Network (USFN) to keep up with what is going on in the mortgage field service industry.

Search on the web for similar type companies and see how they have set up their websites, also read the descriptions because they usually list the types of contacts they want to work for such as: REO real estate agents, asset managers and property managers and HUD investors.

Most firms who are already doing this type of work state that business comes from Realtors who specialize in foreclosures.
1 vote
Ken Peterson, , Tampa, FL
Tue Mar 10, 2009
Iam in the process of starting a cleanout company on the westcoast of Florida. I have the $$ and the knowledge of contracts also have a large list of contractors for the big jobs. Insurance adjuster looking for another way to make a living http://www.petersonadjust@yahoo.com
1 vote
Cleanoutcuts, Home Buyer, New York, NY
Fri Sep 18, 2015
when't start my foreclosure cleanout company
0 votes
swollfitness, , Baltimore, MD
Sun Nov 25, 2012
I had my cleaning business for 4 months now and had no luck. How do I get a foreclosure clean out job. What is need for that?
0 votes
janewyatt, Renter, Germantown, TN
Sun Nov 25, 2012
Maybe people contact the realtors who sell foreclosures to get the work.
You can find these realtors on sites such as foreclosuresus .com

Good luck
0 votes
Smallbizguid…, , North Carolina
Fri Apr 8, 2011
This is a tough business to start because the companies managing the foreclosed properties typically use cleanout companies that they have used in the pass. But please, if you have the desire, don't let anyone stop you. Be ready to sell yourself and your business. After you get you foot in the door it can be an extremely lucrative business. Have you thought about supplementing your business with junk removal like 1-800-GOT-Junk. This a growing business also. With the junk business you can target residental and commercial customers. Hope this helps.
0 votes
jo, , Hollywood Hills, Los Angeles, CA
Wed Dec 22, 2010
its been about 8 months Deborah, how are things going ?
0 votes
Jim Rideout…, Agent, Gardiner, ME
Wed Dec 22, 2010
Make sure you have your insurance policies in place. That is the first question the large asset management companies will want to see.
0 votes
Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Fri Dec 3, 2010
I love when people discover Trulia And they find it necessary to pull up every single old question on their topic of choice to advertise themselves.
0 votes
Brian Persons, Other Pro, Greeley, CO
Wed Nov 10, 2010
altisource.com has job to get you started and some training material.
Web Reference:  http://altisource.com
0 votes
Monir Mamoun, Agent, Denville, NJ
Sun Oct 17, 2010
I think there are a lot of great links below.

Be careful of scammers though. Basically this is a networking business. Just call your local realtors and get insured and incorporated and offer to do a few early jobs cheaply to get a reputation.
0 votes
Cassandra Bl…, , Atlanta, GA
Tue Oct 12, 2010
Hi Deborah, tons of FREE info and startup advice at the blog below to guide you in the right direction. Read everything so you're sure foreclosure cleanup is the business for you before spending any money on start-up.

Good luck!

Cassandra, Foreclosure Cleanup, LLC, Atlanta, GA
0 votes
Reoverhaul, , Tampa, FL
Mon Jun 14, 2010
I have been establish for several months and I have found success by marketing to the realtors who handle the listings directly. Your job is to prove your ability to delivery quality work for less.

http://www.foreclosuretrashout.info
http://www.foreclosurecleanout.info
http://www.REOtrashout.info
Web Reference:  http://www.REOtrashout.info
0 votes
Russell Bens…, Agent, Oklahoma City, OK
Wed Mar 24, 2010
Start by contacting some of the top selling REO agents and see if you can get contacts thru them. I know here in Oklahoma the real estate companies will sometimes handle the clean up, etc but they only use bonded and insured companies so check into that as well.
0 votes
Sean LaSalle, Agent, Macungie, PA
Tue Feb 16, 2010
Deborah,

You need to find out from the state what licensing you will need as well as insurance. Then I would make up some brochures and contact every bank you can think of. They will be another resource besides just Realtors.
0 votes
Marvin Von R…, Agent, Tigard, OR
Wed Jan 27, 2010
Becoming a HUD contractor is not easy at all. I see one or two of you made it but that was luck. In my state the entire top half containing almost all the population is handled by one large acct. I went through months of torture to finally be HUD approved only to be told I would never get jobs until the other place quir and that would only be if I were next in line.
I paid $750 for insurance and after a year of nothing they wanted me to re-up the Ins to stay on the waiting list so I withdrew.

Marvin Von Renchler
0 votes
Johnathan Mu…, Agent, Flagstaff, AZ
Fri Jan 8, 2010
Asset managers and all the local Realtors too.
0 votes
John Stimson, Agent, Oklahoma City, OK
Tue Dec 8, 2009
I have just recently begun a cleanout business and I didn't learn any of it from any website. I contacted the management company that handles all the HUD properties in the area and became a contractor for them. It took about 3 months for a spot to open up but they can keep you as busy as you want to be.
0 votes
Don Tepper, Agent, Burke, VA
Fri Nov 13, 2009
There are lots of previous threads on your question. Here's what I've answered:

Ignore any advice to "charge $x [often around $1] per square foot." Bad, bad advice. Terrible advice. Your price depends on two primary factors: (1) your hourly rate, and (2) how long it'll take to do the job.

First element: Hourly rate. What is your time worth? $10 an hour? $20? $30? $40? Don't sell yourself short. Plumbers, electricians, auto mechanics, and others aren't afraid to charge what they think they're worth. You shouldn't be, either.

Second element: Number of hours required. First, you may work faster or slower than your competitors. That's OK. Second, some jobs will be easier. Some will be more difficult. You've got to factor in the length of time for each job.

Then you multiply hourly rate times number of hours. Let's say you figure it'll take you (or you and someone else, if you're going to be using some help) 20 hours to do the job. And you think you're worth $30 an hour. 20 times $30 is $600.

Then you add on your overhead. That's the time you spend on your business that isn't revenue-producing. It includes marketing, recordkeeping, driving around to provide estimates, etc. A good ballpark figure for overhead is 30%, but once you get rolling, you should adjust that figure up or (more likely) down. So, in our example, you boost $600 by 30%, and come up with $780. Also, factor in any special or unusual expenses--let's say the rental of a piece of equipment for a special task.

If you need to use a subcontractor to do some of the work (let's say flooring repair), find several companies that perform that service--wholesale, not retail. You don't want to go into your local retail flooring center and get a quote from them on repairing a 3' x 3' area on an oak floor. Find some suppliers up front. Generally understand what they'll charge, and make sure they can give you quick quotes when you need it. Let's say that a floor repair person quotes $150 for work. You'd take that figure and mark it up to cover your expenses and the services you'd be providing (a one-stop shop). A 30%-50% markup might be considered reasonable; it's up to you. So when you present your bid on cleaning and repairs, you present one number. You'll know what you're doing yourself and what you're contracting out for. The primary thing your customer wants to know is: What will it cost? And: When can it get done.

Then stick to your numbers. If someone else bids cheaper, let them. If you try to be the cheapest, there's always going to be some dummy who'll do it for less. Always. You want to be known for offering a good, dependable value. Or even (eventually) for offering an excellent high-quality service with a price to match. But start off offering excellent value at a fair price.

You might contact Building Service Contractors Association International. They're at http://www.bscai.org They have books and manuals and getting started in the janitorial/custodial business, how to do bidding and estimating, and how to expand into niche markets. (I used to work for them, and wrote a number of books on bidding and estimating.)

And here are a couple of other resources that might help:

http://bit.ly/Cleanout1
http://bit.ly/Cleanout2
0 votes
Terri Hinks, Agent, Ormond Beach, FL
Sat Oct 17, 2009
I would most definitely find out who the Real Estate Agents are in your area that are listing all the foreclosures. Agents who take these listings often hire the people to do the work, pay them, and then get reimbursed when the homes sell. If you can get in with four or five of the top agents listings the foreclosures, you'll be sure to keep busy! Good Luck!
0 votes
Terry McDowe…, Agent, San Antonio, TX
Tue Jul 28, 2009
First of all, what part of starting a company do you need help with? Startup funds, choosing personnel, company legal issues, pricing? T.J.
0 votes
Mark Laycock, , Alpharetta, GA
Mon Jul 27, 2009
Serious help is available at http://www.sba.gov. You will be shown how to plan, manage, and grow your business. As a woman or a minority you will be directed to contact SCORE where you will get as much help as you need. Be prepared to do your homework if you want to be successful!
0 votes
Eric, , Atlanta, GA
Thu Jul 9, 2009
You need to build a relation with the banks in your area. Find which bank has the most FCs in your area and begin with them. Also if you grow to the point of contracting beyond your ability to perform we have funding available to assist. You must already be working the contract and billing for your work and you ONLY want to use the funding to grow, NOT any other reason.
Web Reference:  http://www.1stCS.com
0 votes
Jody Baker, , Suwanee, GA
Wed Jul 8, 2009
Find networking groups n your area to get your company some exposure. You will find that there are many Real Estate Professionals that are members.
0 votes
Joel Youngs, , Jacksonville, FL
Tue Jul 7, 2009
If you can contact REO agents in your area,They will tell you they have somebody,so you may have to do the first one free. But also join your local REIA (Real Astate Investor) These guys know whats happening. You can also join National Quick Sale.com as a buyer. Put in my promo code jy09 and get 2 yrs for $99. They have tousands of leads. Or call me 800 918 3008 joel youngs
0 votes
Martin Macis…, Agent, South Portland, ME
Mon Jul 6, 2009
You best bet is to contact a REO Realtor who lists for Fannie Mae and Freddie Mac. They are always required to bid out contract jobs for clean outs and rehab work.

Search the MLS or the other papers to find Realtors who list properties as either bank owned, REO or in the other remarks in MLS you will find "sold as is, separate addendum" and this indicates a REO property.
0 votes
Michelle Dru…, , Maryland
Sun Jun 22, 2008
I work for a company that does this. What area are you in? Have you tried to look at other companies that are doing this to see what specific types of services are being offered?

I feel that my boss is being way too picky in the services he does offer and he is being stubborn concerning on how to advertise his company. So far he is refusing to use the internet as a medium.

Frankly I wish I could start my own company as well, however lack of funds is my first issue, then lack of experience with contracts is my second issue. Otherwise I feel I know the rest of the business and how to deal with it in a professional manner.
0 votes
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