Foreclosure Cleaning: Why How Much You’re Paid Depends — A Lot — on the Client

Foreclosure cleaning jobs can come from a number of sources. And, where they come from has a lot to do with how much you’ll be paid. Following are two different types of clients, and what you can expect to make from each foreclosure clean up job.

how-to-market-foreclosure-cleaning-biz

New Homeowners: They are usually new homeowners who buy a foreclosure, and then look for someone to do the cleanup and minor repairs.

Usually, these come from a realtor who has recommended you and/or your foreclosure cleaning company. The realtor may have received one of your mailers, or may have worked with you in the past in some capacity.

These are preferred clients where you can make top dollar on jobs because there are no restrictions, as you’ll see with the other groups we’ll discuss here.

Foreclosure Realtors: Realtors who handle foreclosures are an ideal client because they deal in bulk. However, what you get in bulk, you sacrifice in profit on these types of foreclosure cleaning jobs.

The key to pricing foreclosure cleaning jobs from this type of client is to assess the potential for ongoing work. This way if you take a hit in your bottom line, at least you’ll be able to count on recurring work, which can pad – and make up for — any dry spells.

Get more advice on working with foreclosure realtors.

Marketing Tip: Some realtors are starting a new trend to drum up business for themselves. What is it? To sell more homes, many foreclosure realtors have started asking foreclosure cleaning business owners for estimates before a property is sold. They do this to let potential buyers know what it will cost to fix up a property.

This is lucrative for both parties because a lot of times what prevents buyers from making an offer is the unknown. Foreclosed homes can look like complete disasters, which scares a lot of buyers away. But, an experienced eye can see past that “with a little paint, debris removal, and a thorough cleaning job,” a property is actually a good buy.

Bonus Marketing Tip: Never charge so little for foreclosure clean up jobs that you can’t afford to hire help, or that you’re working for minimum wage. You run a business, so even though the profit margins may be thinner on foreclosure cleaning jobs that you get from these types of realtors, they should be healthy enough to justify taking on the job. This will be different for each business owner.

P.S.: Learn how to start a foreclosure clean up business — and get on the road to creating financial security for you and your family.

P.P.S.: Find Foreclosure Jobs! Did you know that you can find a foreclosure job with a simple click of your mouse? You can using Foreclosure Business News’ new job search portal. It’s just to the right here. You can search by job title, category, keyword, city and/or state. Find your dream job in this exciting real estate niche today!

Copyright © 2009 Yuwanda Black for Foreclosure Business News

Foreclosure Cleaning Jobs: What to Expect When Working with a Foreclosure Realtor

Most foreclosure clean up companies dream of getting a call from a realtor who handles foreclosures. This is because these professionals handle many listings, which usually means ongoing work. But, if you’re not prepared, getting the call can be a curse rather than a blessing.

 

Follow the advice below to be well prepared when the call does come.  

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3 Things to Keep in Mind When Working With Realtors Who Handle Foreclosures

 

1. Move Quickly: When realtors who handle foreclosures call, they expect quick action. This is because someone at the bank/lender is usually hounding them to get properties back in market shape quick.

 

Consider the following example.

 

A foreclosure clean up company owner in Atlanta was on vacation when she got the call from a foreclosure realtor. He had 8 properties that he wanted lawn maintenance on. Furthermore, he wanted estimates on three of the properties for other work (eg, HVAC, replacing sheetrock, painting, carpet laying, etc.).

 

The kicker – he wanted it all in 48 hours (the lawn work completed and the estimates – with photos – submitted).

 

While the company was in good hands while the owner was on vacation, she immediately hopped a plan and came back the same day. Why did she do this?

 

Foreclosure Clean Up Work – In Bulk!

 

Because the contracts were for ongoing work. The realtor told the foreclosure cleaning company owner that if they were able to complete the job in the specified time – and the results were satisfactory – her company would be awarded the lawn maintenance contract until the properties were sold. And, he had other properties. Sweet!

 

So when a foreclosure realtor calls, jump through hoops to meet their deadlines – for it can mean ongoing work.

 

2. Price w/Bulk in Mind: There are many ways to price a foreclosure clean up job – by the square foot, by the job, by the hour, etc. However you price your jobs, always price with bulk in mind when dealing with foreclosure realtors.

 

Now, this doesn’t mean short yourself or work with margins so thin that you can’t afford to hire help. Remember though that foreclosure realtors are usually working within a defined budget – a budget that’s either set by the bank, or some government program guidelines.

 

Sometimes the realtor will clue you in as to what this is, sometimes not. Feel free to ask though, letting the realtor know that you realize he/she has many properties and you’re willing to “give them a special deal” so that they can get the work done on time – and within budget.

 

3. Stick to Your Word: The construction industry (of which foreclosure cleaning falls in) has a horrible reputation for on-time work. Contractors don’t show up when they say they will; jobs don’t get completed on time; oftentimes the work is shoddy and so on and so on.

 

If you just do what you say you’re do – when you say you’re going to do it – you’ll win many jobs. As an example, the foreclosure clean up company owner referenced here said the realtor told her that they were dealing with another company before they called her.

 

He said he’d gotten her marketing materials in the mail (a postcard) and had hung on to them. After one too many times of getting the shaft from the other company, he decided to give her company a call. When she completed the jobs on time, he was very surprised.

 

So keep your word – for it can lead to thousands of dollars in foreclosure cleaning contracts.

P.S.: Learn how to start a foreclosure clean up business — and get on the road to creating financial security for you and your family.

P.P.S.: Find Foreclosure Jobs! Did you know that you can find a foreclosure job with a simple click of your mouse? You can using Foreclosure Business News’ new job search portal. It’s just to the right here. You can search by job title, category, keyword, city and/or state. Find your dream job in this exciting real estate niche today!

Copyright © 2009 Yuwanda Black for Foreclosure Business News

Home Foreclosures Continue to Rise Along with Unemployment

The news on the home foreclosure front can seem like a broken record in that it’s the same ole, same ole — ie:

The home buying market will continue to struggle until the foreclosure crisis comes to an end,” the report said. “Although new federal efforts may prevent millions of families from losing their homes, mounting job losses will likely keep foreclosures at elevated levels. [Source: Bloomberg.com article, Housing Eludes Recovery as Job Losses, Foreclosures Climb]

P.S.: Learn now to buy foreclosures cheap — as cheap as $45/month — really!

P.P.S.: Find Foreclosure Jobs! Did you know that you can find a foreclosure job with a simple click of your mouse? You can using Foreclosure Business News’ new job search portal. It’s just to the right here. You can search by job title, category, keyword, city and/or state. Find your dream job in this exciting real estate niche today!

Copyright © 2009 Yuwanda Black for Foreclosure Business News

Why Foreclosure Clean Up Companies are Going to Be Inundated w/Business: An FDIC Rep Explains

A couple of weeks ago, I had a conversation with a real estate investor. She had been trying to refinance one of her investment properties for months. In the middle of the process, the FDIC had taken over her hard-money lender.
One day while looking through her paperwork to discuss her refi options she said, the FDIC rep who was handling her property noticed her business, a real estate cleanup service. He asked her how business was? She told him it was steady.
He then asked if she’d been getting a lot of foreclosure clean up jobs from banks (they do foreclosure cleaning, as well as a host of other real estate-related services). She said no, that most of her jobs had come from private owners and commercial property owners (not residential foreclosure cleaning jobs as one would expect in this economy).

An FDIC Agent Explains Why Foreclosure Clean Up & Real Estate Services Companies Should Brace Themselves for Business

FDIC Rep Explains Why Banks are So Backed Up

FDIC Rep Explains Why Banks are So Backed Up

Then, she said, he told her, “Get ready . . . you’re going to be so busy once the banks can catch their breath.”

When she asked him to elaborate he said that the REO department of banks are simply inundated with foreclosures coming on the market. Many of them are months behind in getting even basic paperwork done. Right now, he went on to explain, they’re outsourcing jobs to large companies that they’ve been dealing with for years.

Note: At the end of this post are some definitions. They are of terms used in this article that you may not be aware of.

Foreclosure Cleaning Contracts on the Way

And, he went on to explain, these companies are behind as well. He said they NEED and will be looking to outsource jobs to smaller – qualified – foreclosure clean up and real estate cleaning companies.

BUT, he said, they are so swamped with just handling the basic paperwork on foreclosures, that they don’t haven’t had time to vet vendors and start handing out foreclosure cleaning contracts. He told her that once this happens, watch out for the phone to start ringing because she’s going to get swamped.

This underscores what was discussed in the June 1 post here, ie, Foreclosure Cleaning Contracts on the Way? When Will Gov’t Stimulus Money be Allocated? It also makes sense when you consider the latest foreclosure numbers, as discussed in the June 11 post here, Home Foreclosures Headed Towards 2 Million by Mid-Year.

It’s Taking Banks Longer and Longer to Process Home Foreclosures
Note: See State-by-State Timetable of How Long It Takes Banks to Begin Formal Foreclosure Procedures

I interviewed a homeowner in the greater Atlanta area who did not want to be identified. She told me that she lives in a subdivision with almost 70 homes. Currently, 4 are empty and in foreclosure. The one right next to her, she says, has been empty about 4 months.

The house hasn’t been secured (eg, no realtors lock box) and there is no active agent or bank activity on it (eg, no agent’s “For Sale” sign or bank “Foreclosure” sign is in the yard).

Why is this? Because the bank hasn’t even gotten around to processing the property as a foreclosure. The resident said that she feels lucky to live in an HOA-controlled community because the homeowners association maintains the yards of all the foreclosures in the neighborhood.

This gives the properties a lived-in look and keeps vandals and other potentially harmful activity from taking place in/on/around the properties. She said she knows of quite a few who live in neighborhoods without an HOA and they are not so lucky. For more on this read, How Foreclosure Cleanup Companies Are Keeping Neighborhoods Safe.

Haven’t Paid the Mortgage in Almost 2 Years and STILL No Foreclosure

Yet another story comes from a homeowner who says that a close relative lives in a rather pricey neighborhood. It’s in the greater Atlanta area, not too far from where former heavyweight champ, Evander Holyfield, lives. He says they haven’t paid the mortgage in almost 19 months – and they have yet to be formally evicted or foreclosed upon. They still occupy the property.

Now everyone’s situation is different, so who knows what accounts for some people getting foreclosed on in 90 days, while others still occupy a residence after almost 2 years of not paying the mortgage.

And, therein may lie the answer, ie, we are in unusual times.

Every lender has different rules and handles home foreclosures on a case-by-case basis. But, one thing almost all lenders seem to have in common these days – they’ve never been confronted with home foreclosure numbers like these. So it’s all new to them. They don’t have the staff or other resources to handle home foreclosures in a “normal manner,” because these are not normal times.

Foreclosure Clean Up Companies are Going to Rake Up

Once the dam breaks (eg, banks get their internal structures in place), foreclosure cleaning and real estate clean up businesses are literally going to rake in the business. But you must be a legitimate operation, ie, be licensed and insured in order to get foreclosure cleanup contracts. For, that’s the only way banks do business.

Definitions of Real-Estate Terms Used in this Post

What is the REO department of banks? REO is the acronym for Real Estate Owned. It’s what banks call their foreclosure department (they don’t like to use the term foreclosure).

What is a hard money lender? Hard money lenders make loans to people (usually real estate investors) who fall outside of mainstream lending guidelines.

Hard money lenders (HMLs) are usually private individuals or small groups that make up a lending pool that lend money based on the value of the property that is being bought, not on the buyer’s credit score. These loans almost always come with a higher interest rate than a traditional investment loan from a bank; origination fees are also higher.

FDIC Rep: FDIC is the acronym for Federal Deposit Insurance Corporation. It is the US Corporation that insures deposits in the US against bank failure. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.

FDIC reps work in several capacities (eg, as bank examiners, economists, research assistants, etc.). The FDIC rep discussed here was reviewing borrower files of the hard money lender that they had taken over to see what action should be taken (eg, should the loans be refinanced, foreclosed on, etc.).

What does it mean to “vet” a company? To vet a company is simply to conduct an investigation on it. For example, if a bank was thinking of using a particular foreclosure cleaning company as an outsource option, a couple of the things they would definitely check are does it have the proper license and insurance.

P.S.: Learn how to buy foreclosures cheap — as cheap as $45/month — really!

P.P.S.: Find Foreclosure Jobs! Did you know that you can find a foreclosure job with a simple click of your mouse? You can using Foreclosure Business News’ new job search portal. It’s just to the right here. You can search by job title, category, keyword, city and/or state. Find your dream job in this exciting real estate niche today!

Copyright © 2009 Yuwanda Black for Foreclosure Business News

Home Foreclosures Headed Towards 2 Million by Mid-Year

According to RealtyTrac, a leading site for foreclosure information, U.S. foreclosure filings may hit a record 1.8 million by the first half of the year. In the article, U.S. Foreclosure Filings Top 300,000 as Bank Seizures Loom, the numbers cited are dire, ie:

Additional U.S. home foreclosures will probably total 6.4 million by mid-2011, and inventories of foreclosed homes awaiting sale will probably peak in mid-2010 at about 2 million properties . . .

The Top 10 Cities for Foreclosures

Nevada, California and Florida had the highest foreclosure levels. Following them in the top 10 were Arizona, Utah, Michigan, Georgia, Colorado, Idaho and Ohio. [Source: Georgia still in top 10 for foreclosures, Atlanta Business Chronicle]

Monday’s Post: What an FDIC Official Said About Foreclosure Cleaning Jobs and Contracts

Got some inside information from an FDIC (federal government bank) official regarding foreclosure cleaning jobs and contracts. Monday’s post will address this, so stay tuned.

P.S.: Learn now to buy foreclosures cheap — as cheap as $45/month — really!

P.P.S.: Find Foreclosure Jobs! Did you know that you can find a foreclosure job with a simple click of your mouse? You can using Foreclosure Business News’ new job search portal. It’s just to the right here. You can search by job title, category, keyword, city and/or state. Find your dream job in this exciting real estate niche today!

Copyright © 2009: Foreclosure Business News

Foreclosure Clean Up Jobs: Why Homeowner Associations Are Ideal Groups to Market to

Because of the foreclosure crisis, there are many new foreclosure clean up companies who stand ready to help neighborhoods get back on their feet. Many of these enterprising business owners know to contact realtors, the REO (real estate owned) department of banks and mortgage brokers to get business.

However, there is another group that should be added to this list –HOAs (homeowner associations). If you own a foreclosure clean up or real estate services firm, contacting HOAs are ideal for the following reasons:

Want more foreclosure cleaning jobs? Contact Homeowner Associations (HOAs)

Want more foreclosure cleaning jobs? Contact Local Homeowner Associations (HOAs)

(i) First to Know: (Because homeowner associations are usually made up of residents who live in a community, they are the first ones to know when a property is empty.

This is especially true in today’s market because banks are running months behind. They often don’t know a property is empty for months on end. After receiving what’s known as jingle mail, it make take them 3, 6 or 9 months or more to get around to getting a property ready to be put back on the market.

In the meantime, the property stands unsecured. Yards get overgrown, the property may be vandalized, vagrants may move in and take over. In short, the longer it’s empty and has no care, the worse it is for other residents. And, this is why they use foreclosure cleanup companies — to keep a property looking lived in until it is inhabited by new residents (either renters or owners).

(ii) Vested Interest: (For all of the above reasons, HOA members have a vested interest in having a vacant property attended to as quickly as possible once they know it’s empty.

Hence, they call in foreclosure clean up companies to remove the initial trash and debris left behind by departing homeowners. And they may use them on an ongoing basis to, for example, keep the yard maintained until the home is resold or rented.

(iii) Quick Decisions: HOAs can make quick decisions about who is awarded a foreclosure clean up contract. Again, because board members usually live right there in the community, they usually meet, discuss what needs to be done, review submitted bids and award the jobs — all within a matter of days.

For all of these reasons, HOAs are an excellent group to market to to get foreclosure clean up contracts (jobs).

May be reprinted on your blog, website, newsletter, newspaper, etc. with the following text, in full (including live links): To learn more about how to market your foreclosure cleaning business, log on to http://ForeclosureBusinessNews.com, and get the marketing guide, How to Market Your Foreclosure Cleanup Business, a how-to marketing manual specifically for foreclosure cleaning business owners.

Copyright © 2009 Yuwanda Black for Foreclosure Business News

Home Foreclosure Scams: Foreclosure Consultants — Beware!

Scared homeowners facing foreclosure are prime targets for foreclosure scam artists. But, many municipalities are cracking down on them. This is especially true in those states and cities hit hardest by foreclosure (eg, California).

According to the Sacramento Business Journal article, Foreclosure consultants must register with the state:

. . . foreclosure consultants must register with his office and post a $100,000 bond . . . [those] who fail to comply, will face one year in jail and as much as $25,000 per violation.

This is good news because, as was discussed in the last post here, Foreclosure Services Needed More than Ever as Foreclosures Top 1 Million So Far This Year, foreclosures are increasing, which means the victim pool is only getting wider. 

P.S.: Learn how to easily modify your home mortgage and put the stress of possible foreclosure behind you.

P.P.S.: Find Foreclosure Jobs! Did you know that you can find a foreclosure job with a simple click of your mouse? You can using Foreclosure Business News’ new job search portal. It’s just to the right here. You can search by job title, category, keyword, city and/or state. Find your dream job in this exciting real estate niche today!

Copyright © 2009: Foreclosure Business News

Foreclosure Services Needed More than Ever as Foreclosures Top 1 Million So Far This Year

According to the recent post on the Wall Street Journal’s blog, Foreclosures Hit ‘Milestone’: 1 Million in ‘09, there have been more than 1 million (yes, MILLION!) foreclosures . . . so far this year.

U.S. Is Headed for More than 2 Million Foreclosures in 2009

But, this is not the most sobering statistic in this post. That is the following:

The CRL, a nonprofit research and lobbying group that favors aggressive policies to help troubled homeowners, estimates that there . . . will be 2.4 million foreclosure starts in 2009, based off of figures from the Mortgage Bankers Association that are adjusted to reflect the entire mortgage market.

Foreclosure Cleaning Crew on the Job in Atlanta, GA

Foreclosure Cleaning Crew on the Job in Atlanta, GA

Still wondering if a foreclosure clean up company — or other real-estate service business — is a good idea to start? We’re just at the forefront of this crisis. These types of business are evergreen and extremely lucrative, as discussed in the post here entitled, Why Foreclosure Cleaning Companies Will Be Profitable for Years to Come.

P.S.: Learn how to easily modify your home mortgage and put the stress of possible foreclosure behind you.

P.P.S.: Find Foreclosure Jobs! Did you know that you can find a foreclosure job with a simple click of your mouse? You can using Foreclosure Business News’ new job search portal. It’s just to the right here. You can search by job title, category, keyword, city and/or state. Find your dream job in this exciting real estate niche today!

Copyright © 2009: Foreclosure Business News

Foreclosure Cleaning Contracts on the Way? When Will Gov’t Stimulus Money be Allocated?

Many anxious foreclosure cleaning business owners are wondering, “When will the stimulus money start to trickle down to their businesses?” It definitely will. Following is the saga of how and when it is likely to happen.

Update: 2/12/2010!- The stimulus money is finally being disbursed. Learn how to sign up with your local housing authority to get some of it flowing into your foreclosure cleanup business.

What Is This “Stimulus Money” That Everyone Keeps Talking About?

As part of the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program, the federal government set aside some $4 billion to help communities recover from the foreclosure crisis. As explained on the Housing of Urban Development’s website:

“The [p]rogram was established for the purpose of stabilizing communities that have suffered from foreclosures and abandonment . . . [it] provides grants to states, local governments, nonprofits and a consortium of nonprofit entities on a competitive [formula-based] basis.”


How Does the Neighborhood Stabilization Program Work?

Now, this is where it gets tricky and why it’s taking so long for the money to trickle down to all those foreclosure cleaning companies who are anxious to get contracts. {Read Foreclosure Homes for Sale: $2 Billion Allocated by Gov’t to Buy Spells Opportunity for Foreclosure Cleaning Companies for the types of projects foreclosure cleaning business owners can expect when the stimulus funds are allocated}

Each municipality (state and local governments) can decide how they want to use the money. Most have adopted multi-pronged disbursement policies. Following are two common ways the money will be put to use:

Homebuyer Assistance Programs: Some are using this to help low- to moderate-income families buy homes. This doesn’t sit well with many because it’s kind of like, “Isn’t this what got us into trouble in the first place, ie, giving home loans to people who couldn’t afford them?” But that’s a separate issue for another day.

Municipalities are using stimulus funds in numerous ways to help communities recover from the foreclosure crisis.

Municipalities are using stimulus funds in numerous ways to help communities recover from the foreclosure crisis.

Property Preservation and Cleanup: Municipalities will use the money to repair, clean out and sell foreclosed properties and/or those that have been outright abandoned. This is the initiative that excites real estate cleanup and foreclosure cleaning companies.

Cities have to do this because as noted in the article, “State to focus stimulus money on foreclosures,” in the Mississippi paper, The Hattiesburg American:

When a community has foreclosed housing, it affects them in several ways. Obviously, property values decline and those properties tend to become vacant and may sit for a while.

If cities don’t spend the money to get these properties back in shape to be resold, they’ll just sit. This invites crime on many levels and further drags down property values.

What’s Taking So Long for Stimulus Money to Trickle Down to Foreclosure Clean Up Companies?

So, if there’s such an urgent need, you may be thinking, “What’s taking so long? Why is the money not trickling down to foreclosure cleaning companies and other businesses that can help communities recover from the foreclosure crisis?”

Quite frankly, government stagnation. As any American citizen can tell you, when it comes to the government, it’s like trying to run through quicksand. Things just seem to take longer. That’s the way government works.

And remember, the funding just started to be distributed in May. Many municipalities haven’t even decided how to use the funds. This could take months.

And, once they decide on how to use the funds, they must still set up guidelines (eg, a bidding process, vendor review criteria, decide how funds will be distributed, etc.). All of this can take many more months.

Add to all of this the fact that banks are backlogged and more foreclosures are coming on the market every day and what you have is the following . . . .

Foreclosure Cleaning Contracts Are Going to Take Time

There will be many of them coming down the pike, but it make take another six months to a year — or even longer — before it happens.

BUT, those foreclosure clean up companies that are lucky enough to be set up (eg, have the proper licensing and insurance) will be inundated with work.

Want to know how much stimulus money your state is getting to help clean up the foreclosure mess? Read Foreclosure Money Flowing into City Coffers, But Is It Helping Homeowners?

Why It Pays to Start a Foreclosure Clean Up Business Now

It’s wise to get set up now so you can get jobs under your belt and learn about things like pricing, giving estimates, judging manpower, outsourcing to other contractors, etc.

More than likely a lot of this information will be asked for in the bid process (eg, what kinds of jobs has your company handled, what do you charge for “X”, etc.).

And, that’s the skinny on how the stimulus money will trickle down to foreclosure cleaning business owners.

May be reprinted on your site, blog, newsletter, newspaper, etc., with the following attribution, in full: To learn everything you need to know about the foreclosure industry and how to start a foreclosure cleaning business — and be ready to be on the receiving end of some of these foreclosure clean up contracts coming down the pike — log on to http://ForeclosureBusinessNews.com.

Copyright © 2009 Yuwanda Black for Foreclosure Business News