Prevent Foreclosure Advice: Was Your Home Loan Legal? Get a Forensic Loan Audit to Find Out

There are many ways to prevent foreclosure. Many of them most homeowners facing foreclosure know at least something about, eg, loan modification, refinancing, short sale, etc. But most homeowners don’t know about another option that can help them stop foreclosure. What is it? A forensic loan audit.

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Prevent Foreclosure Advice: What Is a Forensic Loan Audit

In basic, layman’s terms, a forensic loan audit is simply an examination of all the documents you signed when you got your home loan to see if they comply/complied with lending laws.

The legality surrounding forensic loan audits stem from the 1968 Truth in Lending Act (the TILA). This law is also known as the Consumer Credit Protection Act. Its purpose is to:

. . . promote the informed use of consumer credit, by requiring disclosures about its terms, cost to standardize the manner in which costs associated with borrowing are calculated and disclosed.

As it relates to home loans, it short, it lays out the rights of homeowners when they take out a mortgage.

How a Forensic Loan Audit Can Help You Prevent Foreclosure

And, here’s how/why it can help you.

You see, every detail of your home loan (your mortgage) must be disclosed, explained and disseminated when you take out the loan. But really, who takes the time to read all of that info? Practically no one. That’s why the loan officer explains every piece of paper you sign at your closing. They’ll give you a brief explain, say something like, “Understand? Have any questions?”

And when you say, “Yes, I understand and no I don’t have any questions,” they say, “Sign here.”

During the last housing boom (late 90s to about 2005), many lenders took so many shortcuts that some lending laws might have been violated. Remember all the of the “exotic home loans,” like zero percent down with a credit score of only 580?

These days you can’t get a zero percent down home loan with perfect credit! Most of these types of home loans have disappeared.

This just underscores how crazy some of the home loans were during the last housing boom. I know, I was a mortgage consultant for a time during this period. Banks, lenders and mortgage brokers played “loosy goosy” with federally mandated compliance guidelines (ie, the stipulations of the Truth in Lending Act) during this time.

During a forensic loan audit, if you find violations, this can be used as a bargaining chip with your lender when trying to prevent foreclosure.

When you undergo a forensic loan audit, all of the documents you were presented with and signed at your closing will be reviewed – with a fine-tooth comb. Some things that will be looked at is whether or not you signed the right documents, the mathematical calculations of the interest on your home loan; the actual loan terms; etc.

If you have this done by a professional (eg, an attorney), they will present you with a detailed report of the findings.

While some who perform loan audits will tout that mortgages have been completely wiped out because of violation of the TLA terms, this is rare.

How Much Do Forensic Loan Audits Cost?

Rates vary if you hire someone to do a forensic loan audit for you. They can be from a low of $500 on up to a few thousand.

Beware of Home Foreclosure Scams

There are a lot of home foreclosure scams out there. And, this can be one of them. If you decide to have a forensic loan audit done, do your research. Don’t be pressured into it and whatever you do, don’t hand money over to someone unless and until you have thoroughly checked them out and you get something in writing.

Make sure they’re a legitimate firm. Compare firms; don’t just go with the first one to contact you through the mail.

Read more on how to avoid home foreclosure scams.

If you’re trying to prevent foreclosure via a home loan modification, a forensic loan audit can be a great place to start because it gives you leverage when it comes time to negotiating with your lender.

Make Money in the Home Foreclosure Market

Learn how to register with your local housing authority to get foreclosure cleaning jobs (and other RE services related work, eg, painting work, plumbing jobs, general contracting work, lawn maintenance contracts, etc.). Read the story of how one janitorial cleaning service grew revenues from $225,000 to over $10 million — all because of government contracts. So, sign up and get on the road to landing lucrative government contracts from local and federal agencies today.med_hudebook

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Home Foreclosure News: Frustrated Homeowner Bulldozes Own Home

Some homeowners facing foreclosure are getting frustrated and taking matters into their own hands.

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An Ohio man recently did just that, bulldozing his own home, which was valued at $350,000 — and that he only owed $160,000 on. He said he told the bank that was foreclosing on him, “I’ll tear it down before I let you take it.” And he stayed true to his word, levelling the home to a pile of rubble.

Read the entire saga in the article, Frustrated Owner Bulldozes Home Ahead Of Foreclosure.

Stop Foreclosure: Learn the #1 secret your lender won’t tell you that can prevent foreclosure.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

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P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Some Banks are Purposely NOT Foreclosing on Homeowners in Default: Here’s Why

While the economy is sputtering its way to recovery if recent statistics on unemployment are anything to go by, home foreclosures remain a problem.

Housing and financial experts predict that 4-5 million foreclosed properties have yet to come onto the open market. Why? One reason is, banks are purposely NOT foreclosing on homeowners who are currently in default. Following is why.

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Why Banks are NOT Foreclosing on Homeowners in Default & What This Means for You

By holding off on foreclosure, lenders allow home prices to recover to some degree. But it’s a “faux housing recovery” — at best. Lenders do this because so many homeowners are underwater. They lose when this happens because it’s more likely that a struggling homeowner will walk away from the property (ie, do the jingle mail walk). Or, they may do a short sale or file for bankruptcy. All of this hurts a lender’s bottom line.

BUT, home prices can’t recover if there’s a glut of inventory (ie, lots of foreclosed homes) on the market. It’s a classic case of supply and demand. After all, everybody wants a deal — and the more inventory there is, the less demand (or incentive) there is to pay a premium price. Once supplies dry up, then the pendulum swings back in the lender’s favor. Consider this.

Currently, there are an estimated 7.7 million homes whose mortgages are in delinquency, but are not being reported as REO (Bank Owned) properties on the market yet. Depending on who you ask, an estimated 4-5 million of these will be bank owned properties for sale within the next year.The reason for the current new wave of foreclosures is largely attributed to the failure of the Government’s “Making Home Affordable” program, launched a year ago this week. [Source: LoanSafe.org]

The bottom line is, a lot of homeowners may be coasting along thinking that they’re ok and that their lender will work with them to refinance or modify their home loan. The cynical part of me says, “Not so.” They’re just waiting for the market to recover and then more homeowners will be foreclosed on.

Prevent Foreclosure Advice

Get your financial act together as soon as possible and try to refinance or get a home loan modification beause once the market starts to recover, lenders will be much less likely to work with struggling homeowners.

Make Money in the Home Foreclosure Market

Learn how to register with your local housing authority to get foreclosure cleaning jobs (and other RE services related work, eg, painting work, plumbing jobs, general contracting work, lawn maintenance contracts, etc.).

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Read the story of how one janitorial cleaning service grew it’s business from $225,000 to over $10 million — all because of government contracts. So, sign up and get on the road to landing lucrative government contracts from local and federal agencies today.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Home Foreclosures in U.S. Reach Record Highs: What It Means for the Average Joe

According to the Financial Times article, US home loan foreclosures reach record high, some 15% of American homeowners are either in foreclosure or late on their mortgage as of the 4th quarter of last year.

This is in spite of the help the Obama administration has put forth to stem the tide of home foreclosures, ie, some $700 billion in TARP funds. Of this, the article states:

The funds, which will come from the $700bn Troubled Asset Relief Programme (Tarp), will be directed into programmes to help people struggling to pay their mortgages, such as the unemployed or those in negative equity (emphasis added).

The bolded portion of the last statement highlights the continuing problem; the reason home foreclosures are still at record highs.

American and Home Foreclosure: Why It’ll Probably Get Worse Before It Gets Better

Until the economy recovers, which means putting Americans back to work, home foreclosures may continue to rise. Numbers seem to be heading in the right direction. Unemployment recently dropped from a double-digit 10% to 9.7%. Slow progress, but progress nonetheless.

What Americans Need to Prevent Foreclosure

But, the problem many homeowners facing foreclosure have is that they need jobs — and they need them now.

You see, when you don’t have a job and have run out of savings, you start to fall behind in paying your bills. You may even have to start using credit cards to pay for the basics. This creates even more debt — right at the time you can least afford it because as anyone who’s ever been in debt will tell you, it’s a lot harder digging out than getting in — even when you start working. It can take months or longer to get on solid footing again.

But the thing that makes America great is that we always bounce back. And that’s what many homeowners facing foreclosure and other financial problems need to hold on to.

Learn the #1 secret your lender won’t tell you that can prevent foreclosure.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

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P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Foreclosure Cleaning Contracts: Learn How to Register Your Business w/HUD & Other Gov’t Contracting Agencies

Government Stimulus Money FINALLY Flowing Into Communities: This Means Contracts for Foreclosure Cleaning Companies (& Other RE Service Businesses)

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The government stimulus money for many housing projects around the country is starting to be allocated, as we discussed last summer here in the post, Foreclosure Cleaning Contracts on the Way? When Will Gov’t Stimulus Money be Allocated?  This means local municipalities have money to spend on many projects that are ideal for foreclosure cleaning companies — and other real estate services companies like:

Appraisers

Realtors

Brokers

Property Preservation Companies

Termite & Pest Control Companies

Building Contractors

Carpenters

Tiling Companies

Window Repair and Installation Companies

Plumbers

Electricians

Roofing Companies

Drywall Specialists

Locksmiths

Window Installers

Lawn Care Companies

Painting Companies

Junk Haulers

Cleaning Companies

Pressure Washing Companies

Gutter Cleaning Companies

Learn how to register with your local housing authority to get foreclosure cleaning jobs (and other RE services related work).

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You can also sign up with HUD for vending contracts. HUD is the Department of Housing and Urban Development. It’s mission is to:  

HUD’s mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. To fulfill this mission, HUD will embrace high standards of ethics, management and accountability and forge new partnerships–particularly with faith-based and community organizations–that leverage resources (emphasis added) and improve HUD’s ability to be effective on the community level.

Part of leveraging resources for HUD is to allocate funds to state and local jurisdictions for home and community improvement projects; many of which are ideal for foreclosure cleaning and real estate services firms.

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One contract could be worth tens of thousands, hundreds of thousands, or millions. And, sometimes they go on for years. It all depends on what it’s for. For example, contracts are awarded to replace HVAC units in a low-income housing project; to clean up waste from a defined zone in a community; to board up windows on foreclosed properties in a certain zip code; etc.

Most contracts are awarded by bid — so you have to be signed up with your local Housing Authority or HUD itself in order to even be eligible to bid on them.

Benefits of Registering with HUD & Your Local Housing Authority for Foreclosure Cleaning Contracts

The beautiful thing about signing up and/or being awarded a local or federal contract are:

(i) Prestige: You can tout in all of your marketing material that you are a vendor with a local or federal agency. Just that alone can get you jobs.

(ii) You’re Vetted: Many times, once prospective clients (eg, banks and realtors) know that you are a vendor with a state or federal agency, they know you have all the proper credentials. Hence, you’re already vetted — and trusted.

(iii) Eligible to Bid on & Land Lucrative Government Contracts: Obviously, this is the leading benefit of registering with your local housing authority and HUD. You’re elgible to bid on a lot of contracts that are available. Even landing one can keep a small or mid-sized company busy for months (or years), depending on what the contract is for and how long it is.

(iv) Chance to Grow Quick: As mentioned above, even landing one contract can catapult your small or medium-sized business to the next level. Proof?

Cleaning Company Grows Earnings from $225,000 to $10 Million — All Because of Government Contracts

Read the story of how one janitorial cleaning service grew it’s business from $225,000 to over $10 million — all because of government contracts. So, sign up and get on the road to landing lucrative government contracts from local and federal agencies today.

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

How to Handle a Foreclosure Cleaning Job When the Home Has No Power

Many homes that have been foreclosed upon will have no electricity (sometimes no water either, for that matter). But, in most cases, you need it to do your foreclosure cleaning work properly. So, what do you do? How can you get the job done when the home has no power?

In the perfect scenario, the REO realtor who’s responsible for the property will get the power turned on for you. That way, you and your foreclosure cleanup crew can come in and knock the job out with no problem. However, it doesn’t always happen this way. Sometimes, the realtor is too busy; especially these days when they are handling so many properties. Or, they may not know what the procedures are for doing this and just don’t want to be bothered with it.

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Options Open to Foreclosure Cleaning Companies When a Property Has No Power

You can handle this situation in a couple of ways if you want to keep the job. You can either: (i) turn down the job, which means losing a possible long-term client; or (ii) you can find a suitable workaround. Oftentimes, this means working with cold water instead of hot. And, if you know anything about cleaning, you know how much more difficult it is to clean with cold water instead of hot.

Foreclosure Cleanup: One Piece of Equipment You Need to Handle Homes with No Power

If you choose to take on the job (which is just smart business by the way), you can purchase a small, gas-powered generator. This will give you the hot water you need, and allow you to take on foreclosure cleanup jobs – even when a property has no power.

The generator pictured here is something like (exactly) what you’ll need. It’s sold at most major home improvement stores, and in all-purpose outlets like Wal-Mart. It’s light weight, hence easily portable; gives you enough power to do most jobs; and is pretty easy to use. If you’re not mechanically inclined, this is good to know.

And the cost – around $200. Not bad for a piece of equipment for your foreclosure cleaning business that will allow you to take on more work, right?

As your foreclosure  clean up business grows, you may want to invest in a more powerful generator. These can cost right at $1,000, which is still not bad, when you consider what it allows your business to do.  

Foreclosure Cleaning: When Renting Equipment Is a Good Option

If you don’t have the money to buy a generator right now, you can rent them at major home improvement outlets like Home Depot.

Many foreclosure cleaning business owners, don’t know this, but Home Depot (and Lowes, et al) rent all types of equipment – from generators to power tools to ladders – and a whole lot more. And, they rent by the hour, the day, the week and the month. Super convenient for every size business.

Following are some approximate generator rental costs. Note: The prices are based on the power capability of the generator.

–3000 Watts $39 for 4 hours / $56 per day

–6500 Watts, $49 for 4 hours / $70 per day

Renting equipment like generators is a great way to grow your company because you can take on more work without having a lot of upfront capital. In fact, don’t purchase equipment until you know you can truly afford it.

Learn more about when to buy versus when to rent equipment for your foreclosure cleaning business.

Note: There are going to be some foreclosure cleaning jobs that you’ll have to pass on – either because the home doesn’t have power, or some other factor. It’s okay to do this if you really aren’t equipped to handle it.

It’s best to let a foreclosure cleanup job go than take it on and not do a good job. You can ruin your business’ reputation before you even get started. Remember, you’re in it for the long haul. Grow – and take on – what you can really handle and do a good job it.  

Continued success with your foreclosure cleanup business!

P.S.: Learn how to get contracts from your local housing authority! Stimulus Money Hitting Housing Authorities Across the U.S. Means Contracting Opportunities for Real Estate Services Businesses (eg, Foreclosure Cleanup Companies, Electricians, Plumbers, etc).

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P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Winter Olympics & It’s “Funny” Effect on Foreclosure Properties

According to an article in the The Spokesman-Review, a Washington-area newspaper, three weeks before the Winter Olympics started in Vancouver, lenders of an area ski resort foreclosed on the property. As the journalist notes:

If you are going to schedule a foreclosure sale, you might as well do it when the world is coming to your door.

Reading between the lines, it’s impossible not to wonder if they lender would have gone this route had the Olympics not been in town.

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Foreclosure for the Big Guys; A Boon to Area Residents (the Little Guys)

In an ironic twist of fate, it seems that at least this once, the little guys are making out like bandits. According to the article, homeonwers inthe are are renting their properites for up to $2,500 per night. And, get this — it’s tax free income for U.S. residents who may have purchased and are now renting out their homes. How/why? It’s explained this way:

According to the IRS, owners can pocket any fair-market rent as long as the term is 15 days or fewer and they don’t claim any of the tax deductions typically allowed on rental property, such as for depreciation or maintenance.

Sweet!

Read the entire article, Whistler foreclosure fails to curtail Olympic rental rates.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

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P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

Foreclosure Cleaning Jobs: Why Landlords Are Fertile Marketing Ground for Foreclosure Cleanup Businesses

Landlords are a great source of business for real estate and foreclosure cleanup business owners. Why? Because tenants are always moving in and moving out, which means they need the types of services foreclosure cleaning businesses provide (eg, removing left behind furniture and other items; making minor repairs, repainting, changing locks, etc.).

 

According to the National Multi Housing Council, a national association representing the interest of apartment firms, the index measuring vacancies and rent levels rose in the fourth quarter of 2009. But vacancy rates in apartments recently hit 8%, the highest it’s been in 30 years. So what gives?

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Any Rental Activity is Good Activity for Foreclosure Cleaning Businesses

The bottom line is, no matter what the state of the rental market is, activity in this market means income for real estate services and foreclosure cleaning businesses.

The Difference between Real Estate Cleanup and Foreclosure Cleanup

Right here we want to take the time to point out that there is absolutely no practical difference between a real estate services company and a foreclosure cleaning company. The only difference is in how you market the business.

Knowing this is extremely important because when the foreclosure crisis no longer tops the news, just know that you will still have a very viable, lucrative small business – if you market it right. Remember, as long as real estate is bought, sold and rented, there will be a need for it to be cleared out, cleaned up, repaired and maintained. In short, all of the services that your foreclosure cleaning company provides.

Now that you know why it’s a good idea to target landlords, let’s examine the services your foreclosure cleaning firm can offer them.

Foreclosure Clean Up Business Owners: Services You Should Offer Landlords

Following are the most needed services your company can offer to landlords. If you’re just starting out, you can build on these as you grow.

Cleaning: Cleaning after tenants move in and move out, eg, cleaning bathrooms, kitchen and all major appliances; floor care (replacing vinyl tiles, cleaning/repairing wood floors, shampoo and vacuuming carpet, etc.).

Trashout and/or debris removal and hauling: Disposing of any furniture, clothing and other items left behind.

Locksmithing: Changing locks on all doors after old tenant moves out.

Minor Repairs: Eg, repairing broken windows, cabinets and doors.

Lawn Maintenance: Cutting grass, trimming shrubs and overgrown trees, etc.

Foreclosure Cleaning Business Owners: How to Locate Landlords in Your Area

Using the internet, it’s relatively easy to find landlords – no matter where you are. Because most real estate transactions are public records, all it takes is a little digging. Following are a few ways to locate landlords in your area.

Landlord Forums and Chatrooms

There are tons of landlord forums and chatrooms online that cater to this niche. This is because most landlords are small real estate investors, eg, they may own three, four or five properties. To find them, go to your favorite search engine, eg, Google/Yahoo! and type in phrases like “your city, landlords”, eg:

Phoenix, AZ landlords

Phoenix, AZ real estate investors

Phoenix, AZ landlord groups

Phoenix, AZ real estate investment meetings

Phoenix, AZ real estate investment groups

Once the listings start popping up, start doing some reading. Many of these boards are very active. Did through them and find your geographic area. Once there, network by answering questions when you can, always being sure to leave the name and contact information of your foreclosure cleaning company.

Note: Most of these forums and chat rooms won’t allow you to blatantly advertise on the site. So you won’t be able to just pop in and leave an advertisement and move on. That’s why you should answer any questions you can (or ask some). This allows you to put your contact information there legitimately.

Many forums and chatrooms will ban you if you just blatantly use the space to advertise, so don’t do it. It’s an excellent source to get business for your foreclosure cleanup company; don’t ruin it by running afoul of site guidelines.

How to Find and Market to Property Management Companies

Landlords who have many properties usually contract with property management companies to handle their properties. Property management companies do everything from running credit on prospective tenants to property repairs and maintenance to collecting rent to handling evictions to exterior care and security.

Think handle every possible facet of rental properties, which make them an excellent prospect to market to if you’re a foreclosure cleaning business. Why? Because the subcontract a lot of the work out. So contact those in your area to offer your foreclosure and real estate cleaning services.

Find them the same method outlined above for finding landlords. In fact, in your search for landlords, you’re probably going to run across some property management/property preservation companies – and vice versa.

Foreclosure Cleanup & Evictions: How to Partner with Landlords in This Scenario

Landlords need the services of foreclosure cleanup/real estate cleanup, particularly when it comes to evictions because items left behind have to be hauled away, repairs need to be made, etc. You can position your foreclosure cleanup company to work with landlords in the case of evictions in a couple of ways:

1) The Sheriff’s Office: you can choose to work with the sheriff’s office to remove items from a home after a landlord has gone through a formal eviction process; or,

2) Post Eviction Cleanup: you can decide to instead focus on post-eviction cleanup, which means you will work with the landlord in getting the property in rental shape after the legalities of the eviction are completely over.

Why You Should Proceed with Caution When Working Eviction Situations

Whether you decide to work evictions through the Sheriff’s office, or through a landlord, be sure that the eviction process is over and that the landlord has a legal right to remove stuff from the premises. Why? Because you could find yourself part of a lawsuit if you’re not careful.

Sure, the landlord owns the property, but tenants have rights and if they are violated, not only can the tenant sue the landlord they can sue you and/or your company too if you “assisted” the landlord in any way in violating their rights – even if you were an innocent participant in the process.

If you’re not sure about an eviction situation, or your gut is just telling you that something’s not right, ask the landlord for proof of the eviction. In fact, this should be your company policy in these situations to protect the viability of your, your employees and your company.

The Landlord’s “Tenant” May Be Your Next Foreclosure Cleanup Client

Ironically, your business’ foreclosure cleanup arm may very well find its next client in the landlord’s apartment or rental home. Why? Because the tenants are moving, right?

They have to go somewhere and they have to have their belongings moved. Who better than you?

According to a recent article in the Wall Street Journal, many owners of apartment complexes are actively marketing to previous homeowners who lost their home to foreclosure, or were affected by foreclosure in some way. For example, the article cited Camden Property Trust, a leasing company that owns 62,903 rental units in the Las Vegas area, as buying mailing lists and marketing to owners who are about to lose their home in foreclosure.

This is proving to be a successful marketing tactic for many landlords and property management companies. Hence, don’t be surprised if you’re hired for cleanup jobs from the landlord’s new tenant.

Some of these tenants ultimately avoid foreclosure by getting paid incentives from their mortgage companies to move out early and leave the home in good shape. What does this mean for you? That they the “moving cash” they need to pay companies like yours.  

Working with Landlords Can Be Evergreen!

Establishing a relationship with even a few landlords can keep your foreclosure cleaning company very busy. Mainly because if they like and trust your work, they’ll call on you over and over again. They’ll also recommend you to others. Finally, you can market directly to the tenants yourself.

As one Atlanta real estate investor (and landlord) said, “Reliability in this industry is key. Once you find any type of contractor in the real estate services industry you can count on, trust me, you keep their number handy because so many of them are unreliable.”

So, make that your marketing slogan, eg, “We show up on time, every time. You never have to worry!” And do it. Your phone will be ringing off the hook.

The bottom line is that landlords – whether they own just a few properties, or are large ones who have their properties handled by property management and preservation companies – can be a lucrative source of evergreen business for your foreclosure cleaning company. So, make yourself known to them.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

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P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

How to Bid on Foreclosure Cleaning Jobs: Inside Peek at an Actual Foreclosure Cleanup Bid (Part II)

The following foreclosure cleanup bid was for a real client. We covered exactly what the client wanted in Part I of this article on how to bid on foreclosure cleaning jobs. Here, we’ll go through actual pricing and provide notes on why/how we did certain things. Ready? Ok, let’s get to it.

Total Foreclosure Cleanup Job Bid: $6,120

Note: There were certain parts of the job that we did not bid on, ie, installing the carpet throughout the home and repairing the ceiling leak in the garage. Although the realtor told us she wanted this initially, she contracted with another company to handle these parts of the job.

Bid Specifics

Interior Cleaning: The home was approximately 4,000 square feet (3,966 sq. ft to be exact. This portion of the job included cleaning all rooms. In the kitchen the realtor requested specifically that all sinks, countertops, cabinets and appliances be thoroughly cleaned (eg, refrigerator, oven, venting hood, dishwasher, etc.).

Also, the client requested that all ceiling fans, mirrors and windows (upstairs and downstairs, inside and out).

In the garage and basement, the client only wanted a “broom swept” clean.

Rekeying Locks: Remember, there were four (the front door, back door and two basement doors).

Repairing/Replacing Garage Remotes:  This included installing new garage remote controls for two doors near the back, and repairing and/or replacing (whichever was more cost conscious) non-functioning garage door remote control that the realtor had.

Screen Door Repair: Fix broken screen door to the rear entry off kitchen.

Trashout and Debris Removal: This included removing trash and debris from the front and back yard. Some of the items were furniture, exercise equipment, clothing and other miscellaneous items left by previous tenants.

Note: Some items the owners wanted left behind included lawn equipment and other “clearly marked” items in the basement. The realtor agreed to clearly mark the items that were not to be removed with yellow Post-It notes.

Light Bulb Removal & Replacement: All broken light bulbs  were to be removed and clients requested that all light fixtures have working bulbs.

Tub Caulking: As necessary.

Job Total for the Above: $2,865

This is how we arrived at this foreclosure cleaning job figure:

Trashout, debris removal and dumping: $1,050

Household Cleaning: $675

Electrical and General Handyman Duties: $525

Window Cleaning (Inside and Out): $300 Note: This was a tri-level home with tall windows, hence extra equipment had to be rented to adequately complete the job.

Appliance Surcharge Cleaning: $225 Why the surcharge? The fridge was full of old, rotten food left behind. Industrial strength cleaners and bags were necessary, in addition to possible pest control spray.

Equipment Rental, Pickup and Delivery: $90

Important Note about Pricing Foreclosure Cleaning Jobs

The company profit was included in the rates above. As a matter of course, we do not give specific bid breakdowns to the realtor because sometimes clients will use this to price shop.

We DID provide the realtor with a “breakout quote” for the painting (see below). Why? Just in case she wanted to opt out of hiring our company for painting. We did this because the realtor had requested “touch up” painting.

We pointed out to her that it would be more time consuming, hence more expensive, to do touchup painting instead of entirely repainting because the paint on the walls was old and dirty. Hence, any “touch up” painting we did would clearly stand out and not look professional.

Foreclosure Cleanup Bid for Painting Portion of this Job

In spite of our advice above, we bid on this as a “touch-up” paint job, just like the realtor requested. This included painting the entire interior of the home, including water stains on ceiling in living room area off kitchen.

This estimate also included touch-up painting of square footage not included in main finished area, specifically the “hallway areas” leading to basement and/or garage.

This estimate does not include painting of the basement and garage.

Total square footage of area to be painted was $2,644 sq. ft. We charged $1.25 per square foot, which brought the total to . . .   

TOTAL FOR PAINTING: $3,305

Once we deducted the $50 discount for the Multiple Listing Service (we give this to realtors who belong to the FMLS because we advertise there and that’s how she found us), the total estimate for this foreclosure cleaning job came to . . . .

GRAND TOTAL: $6,170

Additional Notes We Added to This Foreclosure Cleanup Bid

–Payment immediately upon completion.

–Property owner or the realtor will provide and/or contractor for all supplies, eg, paint, locks, screens, light bulbs, garage door wall panel(s) and opener(s). As per realtor request, the quote provided is for labor only. The contractor (us) will provide all necessary cleaning and debris removal supplies/equipment.

Expiration of Estimate: This Estimate/Bid is good for 7 (Seven) days from date shown on bid.

If all is agreeable and you customer wishes to proceed, please sign and return per instructions outlined on n next page.

Pricing & Bidding

Several in-house profit margin percentages and were used to construct this bid. And, this is different for every company. Some that we used here include job distance, tri-level home, equipment needed, type of debris to be removed (there were several very heavy items), job turarnound time, etc.

About Giving Estimates for Painting

Note they want “touch-up” painting. This practically doesn’t exist. Usually, it’s easier to repaint than “touch up” paint.

One good thing about touch up painting though (if that is what you’re eventually hired to do) is that you usually don’t have to worry about areas window sills, baseboards, closet interiors, etc. Clearly state in your painting estimates what will and will not be covered though. That way, there are no surprises on either end when the job is done. To find a home’s square footage, search a county’s “property search” website and used this info to get a pretty accurate estimate.

As you can see, a lot goes into giving a foreclosure cleanup bid. If it seems overwhelming, don’t let it be. The more you give the better you will get at it.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

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P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

How to Bid on Foreclosure Cleaning Jobs: Inside Peek at an Actual Foreclosure Cleanup Bid (Part I)

The following information is from an actual foreclosure cleaning job bid. Note: Particulars for your company may change based on geographic location, cost of materials and several other factors. This information is dispensed in two parts. The first part covers the details the client sent to the foreclosure cleaning company about what they wanted done.

The second part covers the actual bid the foreclosure cleaning company owner sent back to the realtor.

Foreclosure Cleanup Job Bid: What the Prospective Client Requested

The home in question was getting ready to be re-rented by the owners. The previous renters had skipped out, leaving a lot of stuff behind. They hired a realtor to oversee getting the home ready to be re-occupied.

1. Rekeying four doors

2. Installing new garage remote controls

3. Fixing busted screen door at rear of home

4. Removing trash and debris from front and back yard

5. Mow grass and trim hedges

6. Trash out interior of home, including the basement; removing everything except lawn equipment left behind by previous renters)

7. Replace all nonworking light bulbs throughout home (FYI, this house was about 4,000 sq feet)

8. Dust all light fixtures and ceiling fans

9. Clean kitchen, including all appliances

10. Clean bathrooms and caulk tubs

11. Do touchup painting, including ceiling (which had water stains)

12. Install brand new vinyl tiles in two upstairs bathrooms

13. Install carpet throughout the remainder of the house (except for basement)

14. Repair water damaged ceiling in garage

Extras: Realtor requested that if we spotted anything else that needed done to add them to our bid estimate.

The reason this is such a good example of a foreclosure cleaning job bid is because there are lots of services requested.

The Difference between a “Foreclosure Cleanup” Job and a “Real Estate Cleanup” Job

Technically, this is not a foreclosure cleaning job because the property was not foreclosed on. Hence, it’s a real estate cleaning job. But, they require the exact same services your foreclosure clean up company provides.

The only difference between real estate cleanup and foreclosure cleanup is in how you pitch the services of your company. Right now, foreclosure cleanup is a hot business opportunity, so it makes sense to market your company in this manner.

However, when home foreclosure no longer tops the news, it doesn’t mean that there won’t be any business. There will be. Foreclosure cleaning is an evergreen business because as long as real estate is bought, sold and rented, it will need to be cleared out, cleaned up, repaired and maintained. Always remember this.

P.S.: Read how one foreclosure cleaning business owner makes up to $40,000/wk.

foreclosure1

P.P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2010 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

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