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Foreclosure Clean Up Business: 5 Things You Must Know Before Starting

Updated on January 18, 2010

Why Foreclosure Cleaning Is a Top Biz Opp

Cleaning foreclosures is one of the best small business opportunities to hop in – especially in this economic climate. Proof? The "USA Today" article, 'Trash-out' firms clean up in foreclosure biz, states: "Entrepreneur Magazine included a foreclosure cleanup business - Cyprexx Services of Brandon, Fla. - in its 2008 "Hot 100 Fastest Growing Businesses" list."

And not only that, in 2009 cleaning businesses dominated the list of best businesses to start. In fact, four of the Top 10 Fastest Growing franchise opportunities in 2009 were some type of cleaning company. This is according to, a leading online site for entrepreneurs. These companies occupied the number 1, 4, 8 and 10 spots. They are:

#1. Jan-Pro Franchising International: Commercial Cleaning Company;

#4. Stratus Building Solutions: Commercial cleaning;

#8. Bonus Building Care: Commercial cleaning; and

#10. Vanguard Cleaning Systems: Commercial cleaning.

FYI, the No. 11 spot was occupied by yet another cleaning company, Jani-King, which is a commercial cleaning franchise.

Now that you know why cleaning companies are good small businesses to start, following are five things about starting a foreclosure cleaning company you need to know going in.

1. Get Licensed and Insured: Most of your business – at least initially – is going to come from banks and real estate companies. And, they fully expect you to be licensed and insured as a foreclosure cleanup business. If you're not, many won’t be able to hire you because their guidelines require you to be licensed and insure.

How much insurance do you need? Most companies who hire you will require a $1 million liability policy, along with workmen's compensation. Your insurance agent will be able to advise you on exactly what you need, for it depends on several factors (eg, whether or not you have employees, what kind of business you’re classified as, etc.)

2. Get Contact Info from Various Contractors: In a foreclosure cleaning business, you will use the services of many different contractors (eg, electricians, carpenters, painters, handy men, plumbers, etc.).

Hence, before you start, you’ll want to have contact info on hand for at least one or two in each specialty. Even if you have skills in these areas, it's so easy to get busy that you’ll need to outsource work.

Contractor Tip: Subcontract only to licensed contractors. Why? Because your primary contact (eg, a bank) may ask for the electrician's certification to ensure that the wiring was done correctly on a property you’re working on.

3. Expect the Unexpected: In a foreclosure cleanup business, you never know what you're going to get when you enter a property. There could be feces on the floor and walls (this is more common than you may think); dangerous animals left behind (eg, an angry Rotweiller who rushes you as you enter the premises), or angry tenants who haven't departed the premises yet.

So be prepared. As a foreclosure clean out business owner, make it company policy to never enter a property – at least on the first visit – alone. Get in the habit of rattling fences and knocking loudly on doors to see if an animal or person is present before you enter.

4. Quick Turnaround: In foreclosure cleanup, banks and agents want, expect and need a quick response. This is because the longer a property sits empty, the more money they lose. So, they want to get it back in shape to be resold (or rented) again as soon as possible.

Usually, they want you to start as soon as possible after your bid is accepted. So when you’re preparing your estimate, keep this in mind.

Think about the types of contractors you may have to hire to get the job done -- and what their schedules are like. For example, if you can handle the painting but you need someone to do the electrical work and your electrician won’t be available for three days, you will have to build this into your timeline.

Logistics can be a nightmare in the foreclosure cleaning business, exactly because you must factor in the schedules of so many subcontractors.

This is why, where possible, it’s preferable to work with the same ones over and over again. You see, the more work your foreclosure cleanup business gives them, the more likely they are to give your jobs priority over others.

5. Hire a Reliable Receptionist: The person who answers the phone is the first – and in many cases – the last, impression your business makes on a prospective client. They can can mean landing a $10,000 job, or not.

Many think of a receptionist as a lowly paid employee, and they really don’t give much thought to who they hire for this spot.

Think about it this way: when banks and real estate agencies are calling companies for foreclosure clean up jobs, they are usually going through the phone book or surfing the web looking for companies. If a live person doesn’t answer the phone, they're off to the next listing; usually they don't leave a message.

So you want to hire someone who is personable, reliable, knowledgeable and professional. Pay them a decent wage – even giving a percentage of each job if you want to be really generous – for they are the front line of your foreclosure cleanup business.

Learn everything you need about how to start a foreclosure cleanup business. See the NBC news video below for more on this lucrative small business opportunity.


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