Foreclosure Cleanup Businesses

Due to the massive increase in foreclosures across the US in the last couple of years, the economic crisis has opened some incredible opportunities for those wishing to earn a healthy sized income. Opportunities within the foreclosure industry range from foreclosure cleanups, to high-end financial transactions involving the buying and selling of foreclosed properties.

If you're wishing to start a profitable business within the foreclosure industry, there are a few tips you need to know. Firstly - and contrary to popular opinion, banks take little enjoyment from foreclosing on peoples homes and evicting tenants. If not from an ethical perspective then from a monetary standpoint, since it costs the banks a lot of money to handle foreclosed properties.

In the event that the bank has to foreclose on a property, an opportunity is created for cleanup and property preservation companies to get the houses ready for sale. Most foreclosed properties are not always left in the cleanest of conditions - which obviously makes it difficult for banks to try and sell them. If you're looking into starting a Foreclosure Cleanup Business, click the link for my other article.

Foreclosure Cleanup Businesses - Are They Businesses That Last?

A common worry among people “kind of thinking about” starting up a Foreclosure Cleanup Business, is that there will only be huge profits to be made during an economic crisis - since foreclosure rates are always highest during a recession. Undoubtedly, there’s more work to be had by foreclosure cleanup businesses during a recession, however, the companies that follow the principles laid out by Les Tyler for example, thrive successfully regardless of the economic situation. If you start a Foreclosure Cleanup Business hoping to make a quick buck - you may very well make money in the short term, however, it’s unlikely that you'll thrive once the recession passes. If you don't build a business on principles of great customer service, a strong work ethic and establishing stong business relationships with clients, your company will simply fizzle out when the economy stabilises. If you want to start up a Foreclosure Cleanup Business, then NOW is the time to do it. Also, If you wish to start up a foreclosure company that lasts beyond a recession and easy money, then I highly recommend reading this.

Having Patience In The Foreclosure Cleanup Business

One final point is regarding patience. Many people get into the Foreclosure Cleanup Business with an instant gratification mindset. Although there’s few costs involved in starting a Foreclosure Cleanup Business (see Foreclosure Clean up Business Costs here), it's not a get rich quick scheme! There's plenty of money to be made, but it still takes time to build a the business up. Those that come into the Foreclosure Cleanup Business with patience and a long-term perspective, always come out on top of those that want easy money and become frustrated if they’re not millionaires within a month. This holds true in the achievement of just about any endeavour. Just think if you come into this industry with a patient attitude, the hordes of competition that jump on the bandwagon and quit in frustration will leave more work for your company to take up.

Foreclosure Cleanup Jobs - How To Get Paid On Time

Foreclosure cleanup jobs can be relatively easy to secure, given the current economic crisis and the virtually untapped nature of the foreclosure cleanup business. Foreclosure cleanup jobs can involve general tidying, maintenance of properties (grass cutting, weeding and clearing gutters), removing waste, minor to major repairs, changing locks and other specific requests made by clients.

Often-times when a foreclosure cleanup business is in its infancy, a lot of jobs can be provided in the form of subcontracts from larger property preservation firms (since they receive the bulk of larger contracts). Larger companies may outsource jobs to smaller foreclosure cleanup companies to compete services on properties. The problem for smaller foreclosure cleanup companies, however, is that the larger property preservation firms can withhold money until they get paid from the client (banks, lenders etc) for the jobs completed. Obviously, this can present a massive problem in regards to cashflow for the smaller cleanup companies, since the money is passing through two hands instead of directly from the client.

If you're starting a foreclosure cleanup business and are looking for foreclosure cleanup jobs, I've put together a few tips that can help safeguard you against late or non-payment of any subcontracted cleanup job.

Negotiate Foreclosure Cleanup Job Payment Terms

Discuss and agree on payment terms with any company prior to starting any jobs. Typically, payment terms can be anywhere between 15 to 90 days from date of invoice (depending on the nature of the jobs). Most large property preservation firms will state their payment terms are company policy and nonnegotiable. So you’ve got a choice, you can argue your case for shorter payment terms or you can walk away from the cleanup job. However, you’d be surprised how often a little arm-twisting can help change these “nonnegotiable” terms when you stick to your guns. This is really your call, however, you're not a charity and no small foreclosure cleanup business can afford to do jobs for free - for very long at least. If you take on too many subcontracted cleanup jobs from companies that don't pay on time, you'll find yourself out of business before you've even got started.

Get your Foreclosure Cleanup Jobs In Writing

A subcontract works agreement or a contract signed by both parties is essential. You need the specifics of the jobs to be completed and also the payment terms in writing. If you carry out jobs via a verbal agreement, you're taking an enormous risk! You need to document your terms in writing and have their company sign it. If the organisation that is contracting your company asks you to sign their own agreement, read it thoroughly and do not be afraid to dispute any terms you don't agree with.

Add Late Fees as Part of the Foreclosure Cleanup Contract

If you stipulate late payment fees as a term in your signed contract with the company. You are within your rights to employ those fees should the company fail to pay within the agreed terms. Obviously charging late fees or involving solicitors can damage company relationships, however, if there’s no reasonable explanation for a late payment then it's something you will need to consider. Before getting to that stage, become a pest - this means picking up the phone and phoning every day until you get an update on payment. You can hire a credit controller to do this also, although for a new foreclosure cleanup business that may be a bit of a luxury. You can send payment reminders to the companies that owe you money, if that doesn’t move things along, have your solicitors send standard 7 – 30 days until legal proceedings letters.

Foreclosure Cleanup Jobs - Doing Your Homework

It’s perfectly acceptable to request references from any property preservation companies that wish to hire your company for job. You can always state that it's part of your company policy. Ask for three or more references for companies they've subcontracted jobs out to in the last six months. You can check with those subcontractors to see if they were paid a timely manner.

Using Factoring Companies for Foreclosure Cleanup Jobs

In this day and age, many smaller foreclosure cleanup businesses are starting to use factoring companies. Factoring companies essentially purchase your invoices for a percentage of the overall value due. This way you can get money straight away and it becomes the factoring companies responsibility to chase the invoices for payment. For example, you do jobs for a client and invoice them for $5,000. Instead of waiting 30 to 90+ days for payment, the factoring company will buy the invoice from you (minus their fee) which may be 5% for instance. So the factoring company purchases your invoice for $4,750 and you get the money within days of completing a job, as opposed to potentially waiting for months. Obviously this is your call again, since you’d lose out on $250 to get paid sooner rather than later. This really depends on how much cash-flow will be an issue for you, the type of clients you do jobs for and your relationships with them.

I highly recommend to anybody that's actually serious about starting a successful foreclosure cleanup business to read this

Starting a Foreclosure Cleanup Business

5 Tips You Need To Know When Starting a Foreclosure Cleanup Business

The foreclosure cleanup business has been praised as one of the greatest industries to start out in as per the USA Today article, "Trash-out firms clean up in foreclosure biz."

If you're thinking about starting a foreclosure cleanup business, I've listed five things to consider before heading in.

When Starting A Foreclosure Cleanup Business Get Licensed

Become Licensed, bonded and covered with Insurance. Clients will expect any company they contract for foreclosure cleanup jobs to be licensed and insured. If you fail to get your cleanup company licensed and insured, it's likely you'll fail to receive any jobs.

Many banks and companies require a "1 million dollar liability insurance plan". A good insurance firm will be able to advise you on exactly what you'll need.

Foreclosure Cleanup Business Contractors

When starting a foreclosure cleanup business, you will need the expert services of numerous skilled tradesmen, e.g. electricians, painters, plumbers and so forth. Before you start up your business, line some up within each trade. If have any reliable tradesmen as friends, employing their services may be beneficial depending on your relationship. 

Even if you're qualified within any of these specific trades, things can and will become  hectic. Due to stringent client demands, you will need to outsource work at times.

Who To Hire

If you need to Subcontract work out, do so to skilled tradesmen who are also licensed and insured. If you seek the services of a plumber for instance, the client may well require the plumbers official certifications to assure all work has been completed by a licensed tradesman.

Expect the Unexpected When Starting a Foreclosure Cleanup Business

In the foreclosure cleanup business, you never know what to expect when you enter a property. There may be fecal matter on the walls, wildlife, pets left behind, needles on the floor or even angry tenants that have refused to leave.

Safety Comes First In The Foreclosure Cleanup Business

• Under no circumstances enter a home for the first time on your own.
• Wear gloves in “less than pleasant foreclosure cleanup jobs”. knock on doors and even shake fences before entering a property (there might be aggressive dogs left behind, or owners for that matter!).
• Remain vigilant at all times - you need to be alert and on guard. You don't know what you may come across in one foreclosure job to the next, so don't become complacent and assume you "know it all" after your first couple of jobs.

Estimating Foreclosure Cleanup Jobs

Banks and financial agencies count on speedy results. Often, they will want you to get started as soon as possible after a proposal is accepted. That is why when you're preparing a estimation, keep some of the following things in mind.

•     Your own personal schedule
•     The number of contractors you'll need to complete the job
•     The schedules and workloads of the subcontractors you intend to hire

Logistics can be a headache in the foreclosure cleanup business - especially when using subcontractors. You need to try and do business with the same subcontractors frequently. The more work your company provides the same subcontractors, the greater the chance they'll give your jobs precedence over others.

When Starting a Foreclosure Cleanup Business Hire a Good Receptionist

Many people underestimate the importance of a good receptionist. However, the person answering the phone can make the difference between landing a $5,000+ contract, and nothing at all.

When banks and financial institutions phone companies for foreclosure cleanup jobs, there’s rarely a second chance given. The banks may be looking through a phone book or searching websites for foreclosure cleanup businesses. If your business fails to answer the call or conveys a poor attitude, you will fail to get work – it’s that simple.

Therefore, if you decide to hire a receptionist get somebody that's pleasant, trustworthy and professional. In addition, pay him or her well and let them know how important they are to the company. They are the first point of contact for your cleanup business.

Are you serious About Starting A Foreclosure Cleanup Business?

Succeeding in the foreclosure cleanup business can take hard work to start with, as does any business. However, the rewards can be phenomenal. Also once you get to the point in which you’re contracting most of your work out – it becomes almost effortless. It's an industry that requires relatively little start-up money and no degree etc. It’s just a straightforward way to make money and that’s why I love it.

If you’re serious about starting a foreclosure cleanup business, then you need to get serious about where you learn how to become successful. To do that, i highly recommend listening to industry expert Les Tyler - more info here.