A fertile client base for new foreclosure cleanup businesses can be the large property preservation company -- specifically those companies that handle several states. These businesses will be larger companies that already have the business.
You will be contacting them in an effort to seek subcontracting work. Many perform a host of property preservation activities such as the following:
--Trash Removal
--Yard Work and Tree Service
--Re-Keying
--Painting
--House Cleaning
--Debris Removal and Trashouts (Interior and Exterior)
--Pool Service
--Hazardous Material Removal and Pest Control Services
--Mold Removal and Inspection Services
--General Inspection Services
--Carpet Repair and Installation
--Flooring/Tile, Repair and Installation
--General Contractor, Drywall and Stucco Repair
--Cabinetry Services
--Electrical and Plumbing Services
--Roofing, Masonry and Concrete Work
--Window and Door Repair/Installation
--Heating, Ventilation and Air Conditioning
--Winterization
--Etc.
Services for Which You Should Sign Up: As a smaller foreclosure cleanup company, you may only offer some of the services for which the larger companies seek contractors. For example, you might not offer winterization or lock changing, but you may specialize in debris removal and lawn care. That's okay; you can still apply to become a vendor offering only the services for which you are set up to perform.
Many of the foreclosure cleanup online applications have checklists where you can simply indicate which services you are interested in handling for the larger company.
What's in a ZIP Code? Most of the larger, formal companies will ask you to specify which areas you service based on zip codes in your area. It may be tempting to list all of the zip codes in your surrounding counties. But don't. Only list the zip codes you know you can comfortably service, or you may get overwhelmed.
Go to the United States Postal Service's website and click on ZIP Code Lookup (by City) to find all the ZIP codes in your city and narrow down those areas you want to service. Once you have your ZIP code service list, you will need to refer to it often, so keep it in a file on your computer for easy access when filling out foreclosure cleanup applications.
License and Tax ID? Are you all set up to target the larger companies for foreclosure cleanup work? You will need to be properly licensed as a business and will have to submit tax ID information to the larger company to be considered as a vendor.
Business Insurance: Also, there are often strict insurance guidelines when you are seeking to become a subcontractor for a larger property preservation company, so pay close attention to the individual requirements.
Liability Coverage: At the outset, here are some basic liability insurance limits to consider, at minimum:
Each Occurrence: ,000,000
General Aggregate: ,000,000
Product/Completed Operations Aggregate: ,000,000
Workmen's Compensation: Many of these larger companies will also require workmen's compensation insurance, which can be expensive for a new business owner, but many will not require proof of workmen's compensation until they are considering sending you work.
How to Find Larger Property Preservation Companies: Below are some key phrases to research in Internet search engines that will help you find larger contractors who specialize in foreclosure cleanup work. Go to search engines like Google, Yahoo, Dogpile, AltaVista, etc. Start out searching these keyword phrases:
--property management companies
--property preservation companies
--asset management companies
--mortgage field services companies
--real estate management companies
--property management companies
--maintenance and management companies
--REO management companies
--field services companies
--private mortgage insurance companies
--bank REO departments
--asset management departments
--mortgage servicers
--REO departments
--asset management branch
--property disposition companies
As you search, you will have to sift through a lot of non-relative websites, but you will eventually come across some viable companies to target.
It's a Numbers Game: Don't stop at one or two foreclosure cleanup vendor applications. Sign up with as many larger companies as you can find so you are greasing the pipes for future business.
Good luck with your foreclosure cleanup business!
Frequently Asked Questions
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QUESTION:
Starting a new business cleaning foreclosures and can not afford full- time employees until I make money.?
Can I hire but issue a 1099? Do I still need workers comp.?-
ANSWER:
You can 1099. You do not need workers comp, the bank or lien holder on the foreclosed property is responsible to have insurance.Keep in mind that when you 1099 a worker, that you have employed them to perform a particular function and may only place a time limit on job completion.
You can't assign their hours. In other words, you can tell them "This painting needs to be done by Friday". If you were to tell them "You must be here by 9am daily and paint until 4pm." then they would no longer qualify as private contractors.
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QUESTION:
How do you start a business repairing and cleaning foreclosure homes?-
ANSWER:
Find out what the requirements are to start a business in your area. Most likely, you will need a business license and you need to check and see what the local tax requirements are. A business plan would also help. I suggest you consult with a free adviser at SCORE, the Small Business Administration service.You will have to bid for services against other contractors doing the same thing, so have a good idea of what it will cost to clean out a house. The houses are usually sold "as-is," so repairs aren't done unless required by law.
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QUESTION:
What to charge for cleaning foreclosed properties?
My wife & I own a cleaning business. We offer residential & office cleaning. I recently came across the "Foreclosure Cleaning" business idea and want to know, how much should we charge? I know I need to do a walk thru before I give an estimate, but, well I want to be fair to the client and to us. All input is welcome, especially if you have done this in another area of the country.-
ANSWER:
What is your hourly rate?
Just charge what your hourly rate is. At least, that is a good place to start. If the place is a real dump, it is going to take longer (more hours) to clean up and prep to sell.
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QUESTION:
Does anyone know how to start a foreclosure cleaning business?
Cleaning forecosures and new construction-
ANSWER:
I have no experience in the area, but have idea's on steps you might take to do it.1. Get DBA
2. Get Insurance
3. Get supplies
4. Call banks, Mortgage Companies and get your name out there .. Call Local Contracting companies and drive around looking for condo's ect and find out who the builder is to contract with. You might also want to call Realty places, since many can handle weekly rentals too.
5. Join a BNI or local networking place and have a ton of business cards ready to hand out.While this is only in a nut shell .. I think it would be what I would do to start...
Good Luck!
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QUESTION:
is there good money in cleaning out foreclosure homes?
I have cleaned houses for 5 years, And now looking to get into cleaning foreclosed houses. Is there good money in it? does anyone know who to contact? or how it all works?-
ANSWER:
I know ocwen agents choose there own contractors. So go to the ocwen real estate site and find out how the listing agents are you your area. Give then a call, make a resume, start marketing.
Also sign up with companies Safeguard its a property preservation and reo company.
Takes a long to get to a point were you have lots of work. But if you sign all the preservation companies and keep hitting up the local reo agents you'll get there.
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