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I've given this some thought actually and here are a few of them...

Cleanup what? Will you do raw sewage? Basements?
How about yard work?
Small repairs? Electrical/plumbing/ drywall. what are your skills?
License needed?
Will you need to have insurance?

I thought about talking to Real estate offices (not agents)
Bank foreclosure officers.

I'll add as I think of more.
 

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Discussion Starter · #3 ·
no raw sewage, will do bsmnts (have help for that, not me!!! lol) i will need insurance and now is a time that i can afford to do it. i can also afford a used pickup of some sort.

i will NOT be doing any contracting work. dont want any part of that. just want the initial cleanout....

thanks, russ
 

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Discussion Starter · #4 ·
also, i have a good friend who owns a small real estate company...we are meeting for tea this week to discuss. i also have a friend who is a mrtg broker....we are meeting next week to discuss my idea.
 

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please let me know how it goes.

Will you haul stuff garbage away? Dump fees?

I think I would also consider the possibility you might have to haul away things like paint and batteries. In other words figure out ahead of time where to do this instead of waiting until you *need* to do it. KWIM?
 

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I would like to add that you should include a clause that anything found on the property and removed by you is yours to keep. You could find a lot of nice things to resell.
 

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Discussion Starter · #7 ·
thanks annk...but, truly, i have no intention of going thru other peoples garbage that has been left behind...lord only knows what could be in there...good or bad...just not doing it...and, i will not be doing the cleanouts...i have a crew in place...so maybe you have a point, maybe they will want to look through stuff...not me!
 

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What Ann was referring to was the fact that people just up and walk away from everything or the locks get changed and people have no chance to get any of their items. It's not all just garbage.

Have you thought about what you would do if there is no water to the home? Often case in a foreclosure, the water is shut off at the street or depending on location, winterized so that the meter does not freeze and bust.
 

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Discussion Starter · #9 ·
the houses will be bank owned. water, etc is their responsibility. not mine.

i will have full insurance though.

and, no, i want nothing to do with other peoples stuff. i just want to start a business cleaning them out. not going thru other peoples stuff.
 

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What I am asking though is how you are going to clean a house if the water is off, the house is winterized, the stop box locked, etc? A lot of banks don't/won't place water services into their name and the water utility won't turn water on unless it is in someone's name. Household cleaners would only you get you so far, especially when some foreclosures are to the point of uninhabitable.
 

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My only thought here is that afaik, banks rarely want to pay to do anything with the property other than winterize it.

Worth checking with some REO realtors tho just to confirm.
 

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Are foreclosure rates rising or dropping? Is the unemployment and loan default rate still going up in your area or is it stabilizing? Make sure you have analysed the economic indicators to see if the opportunity hasn't already passed.
 

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Discussion Starter · #13 ·
i have done plenty of research and foreclosures are going to go up this year again, sadly.

i do not want to "clean" the houses. i want to get all the left behind stuff out of it. so i doubt i need water for that. i would be more of a trash getter-outer....

i am researching and talking to people that we know at banks and that are in the mortgage biz.

i am doing my homework! just wanted some opinions. thanks
 

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Discussion Starter · #14 ·
i live in a higher income area...so would not be doing any biz around here! which is why i have a crew in place so that i dont have to go out of my comfort zone.

the city we reside in is very very small and there were maybe about 10 forelcosures the past few yrs and there do not seem to be anymore as i research this daily on a bunch of different websites
 

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From what I've seen in my area, the listing agent/broker of the bank-owned property pays for the electric, gas & water bills. Need those services on for showing & for inspections purposes. For lawn, pool, misc. maintainence fees, & if there were any break-ins or vandalism, agent pays for some minor repairs (need to get bids & authorization first) too, all bills send to escrow, agent get paid back for those expenses when escrow closes. If property doesn't sell & goes to auction, all bills send to bank for payment. That is for residential properties.
For commercial properties, banks would hire a property management company (licensed real estate agent/broker) to maintain, collect rents, etc. The property manager hires contractors or handyman for maintainence & repairs (bids & authorizations too).

I'm assuming that you would like to start a business on cleaning & hauling away junk from foreclosure properties. Your clients would be the real estate brokers who handle/specialize bank-owned properties, they can hire your company to do the work. Your competitions are those who are already in this business & contracted w/ the brokers.

I don't seem to recall bank has those properties cleaned before closing, that's usually the new owners' expenses. That goes for million dollars properties also. Maybe you can advertise to new owners also.

Banks are holding on to a lot of foreclosed properties, they sell off a small % of their holdings at a time. If the banks dump all the foreclosed properties any more rapidly, the housing market would be even worse, I guess that is damage control. There will NOT be a shortage of foreclosed properties in the near future.
 

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Discussion Starter · #17 ·
thanks vanilla. yes, i just want to get out and haul away what is there. as i stated before, no contracting work involved at al - i want no part of that! i am working w/ some friends currently in the real estate biz on my idea ...wanting to know how many foreclosure cleanup biz's are in the area, what is needed, etc...

and, russ, i will certainly keep you posted on the progress as i am just in the beginning phases of this. fingers crossed...dh and i had taked about this biz about 2 yrs ago and should have just done it then! but, who knows, ...one never knows unless they try (with a lot of research involved)
 
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I have been in the mortgage industry for 20 years, but I do not personally have any direct experience with these types of dealings and I don't think the mortgage side is where you want to be looking either. I think you would want to be in contact with local real estate brokers if you want to get this type of business. My mother worked as a real estate agent and the broker she worked for handled a lot of bank reo propertys. The real estate brokers provide the banks/lenders with a BPO (broker price opinion) that is the brokers opinion of the list price, property condition, cleanup & repairs to get the property to a showing condition and also helps the bank determine what real estate broker they want to use to list their property. Once they select the broker to list their property the clean up and repairs needed are usually handled by the real estate broker as well. The real estate broker will accept bids and fwd to the bank/lender to make their determination on what contractor to use for clean up and repairs. So the real estate broker is kind of the middle man for the contractors and the bank. I think contacting and building relationships with local real estate brokers will be the best route for you to get your foot in the door on this kind of business.
 

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I think you'd also be competing with the people who work with auction houses, antique dealers, etc. and "empty houses." There are auction houses here that will "clean up" your space(s) for a fee. I'm sure that whatever they make from your stuff is their profit.

See here:
Palmer Cleanouts & Disposal LLC in Fremont, NH | 706 Main St, Fremont, NH

I don't know these folks, it's what came up in a google search!

Judi
 
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