Economically hard times can be an opportunity of a lifetime for those ready to do what it takes.
A foreclosure cleaning business is one such endeavor.
In this blog, you will find everything you need to know about starting your business to restore foreclosure sites and bring them into saleable condition.
How Does It Work, and How Much Does It Pay?
A prerequisite to starting a foreclosure cleaning business is a flexible schedule because banks require urgent cleaners and want the work done shortly.
In a foreclosure cleaning business, every gig is different.
It usually includes services like trash removal, floor polishing, window washing, lawn maintenance, etc.
You might have to work on weekends, but it pays decently, ranging from $500 to $2,500 per property.
You can also make a little extra money by selling the previous owner’s belongings after verifying that they no longer need them.
A Step-by-Step Guide – How to Start a Foreclosure Cleaning Business
To start this work, you need some cleaning products and a contact number for people to contact you.
1st Step: Cost of Operations
The operating cost of this business includes four to five elements.
The first element is labor.
You will need a waste removal crew, foreclosure cleaners, and construction workers for repairs to bring the home back to a saleable condition.
There will also be accounting and legal work to see the profit and expenses of the business.
You can outsource these services instead of hiring full-time accountants and lawyers.
The second element of your operating cost will be the supplies.
You will need tools to clean off the dust and grime.
The third element of your operating costs will be vehicles.
For some properties, you might have to remove large furniture items.
Small dump trucks can be used to dispose-off trash accumulated in the house.
So the vehicle cost will include repairing minor damages to the vehicle along with the cost of gas.
Your fourth operating expenditure will be the disposal fees.
Much scrap and rubbish will accumulate at a foreclosed home, which must be disposed of according to the country’s local legislation.
The fifth element of your operations costs will be the unexpected or miscellaneous expenses you must prepare for.
These expenses include repairing a broken truck or any unexpected fixes and issues.
2nd Step: Getting a Permit for the Cleaning Work
For cleaning the properties owned by banks, you will need the following;
- a permit,
- a business license
- a federal tax identification number, and lastly
It would also be good to get general support for contractors.
Get your company licensed so you can start your business within your state government’s jurisdiction.
Federal Tax Identification Number
Labor is the first expense; you will need a tax number to recruit people.
It is essential to get your business insured so that insurance can pay for the repairs if anything goes wrong.
When working with banks, minimum insurance coverage may be required.
General Contractor License
Some lenders want to see a general contractor’s license.
Initially, one doesn’t have a license to provide all the services like carpentering, painting, plumbing, etc.
In that case, subcontractors can be used.
However, having in-house staff makes it easier to land more jobs.
Step 3: Pricing your Foreclosed House Cleaning Services
Most lenders are busy people who want a quick turnaround.
Each house cleaning gig is different, so it’s better to quote prices after consulting a professional.
Financial or professional institutions like banks will likely pay a premium for a speedy turnaround.
As you get more experienced, you will start noticing which damages are expected and how much it typically costs to repair them.
Then you can prepare a pricing template to estimate the total repair cost.
Step 4: Hiring Employees and Sourcing Supplies for the Foreclosed Home Cleaning Business
Starting a foreclosure home cleaning business is easy because it doesn’t require much equipment or labor.
You begin with small gigs, and your work increases gradually over time.
Here is a small list of cleaning sources you will need;
- Bathroom cleaners
- Vacuum cleaner
- Extension cord
- Cloth rags
- Window cleaner
- Latex gloves
Step 5: Go Out and Find Gigs
Start your search for a foreclosure cleaning business at foreclosure auctions, with lenders, and with real estate agents.
Finding your first gig might be challenging, but keep looking, and you will get it.
Establish your online presence.
It would be great if you would make a website and advertise your services in nearby areas.
You can also search for work on websites specially made for such work, such as Realtor.com and Zillow.
Network and build connections
Establishing relationships with realtors specializing in foreclosed houses would be great for your business.
It would also be helpful if you contacted the business owners themselves.
Opportunities can be found anywhere.
Drive around nearby areas, and you might find some foreclosed listings where you can get started.
Usually, there are foreclosed house picket signs on the front lawns.
You can call the number on the placards and inquire about cleaning services.
Auctions for Foreclosure
Such auctions can be a great place to start your hunt.
Look for details about such auctions online, and you might find repossessed home buyers there.
There is no better publicity than word of mouth.
Do the job so well that your client becomes your advertiser and recommends it to their friends and family who need foreclosure cleaning services.
This way, you will quickly become your area’s go-to foreclosure cleaning service provider.
Particular bank branches deal with foreclosed homes under the name “Real Estate Owned” (REO).
Dealing with foreclosed homes is routine work for them, and you can land gigs there.
Leave your contact details at the bank and display your portfolio.
The more you spread the word, the better your chances are of getting work.
Step 6: Disposal of Waste
In a foreclosure cleaning business, there will be a lot of trash and debris to deal with.
Some might be heavy and difficult to remove, like large furniture items and electrical appliances.
Removing these items will require human resources to carry them around crooked corners.
You must get rid of these things according to local laws and rules, so you must be aware and ready ahead of time.
For removing waste and scraping at the start, it’s better to rent a vehicle.
There are numerous vehicle-rental services like U-Haul.
One thing to ensure while selecting a vehicle rental service is that they must be dependable.
Most foreclosure gigs need a quick turnaround, and you can’t waste time waiting for your vehicle to arrive.
Once you start getting regular work, purchasing vehicles for your foreclosure cleaning business is a good idea.
This will save you a lot of rent and make the workflow smoother.
Initially, it might look like a big purchase, but in the long run, it’s inexpensive.
Disposing of the scrape
Once the useless stuff is out of the house, what do you do with it?
Suppose things like clothing or furniture are in usable condition or can be used with some repair.
In that case, you can donate it and properly dispose of whatever is unusable.
Related Reading: 15 Unique Business Ideas To Profit From In 2023 – Learn More Here.
Final Thoughts On How To Start A Foreclosure Cleaning Business
By now, you know every step you need to take to start your own foreclosure house cleaning business.
The most appealing feature of this business is that you only need a little to get started.
This business venture is the way to go in economically challenging times where it’s hard to generate significant capital.
All you need is the will to start and the courage to break into the industry.
Your business will soon be booming with consistent effort, and you will thank yourself for taking this leap of faith.
Now, go for it!