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Foreclosure Clean Up: Earn $42,000 by Adding Property Inspections to Your List of Services?

Updated on February 4, 2010

If you own a foreclosure cleaning business, or have been thinking about starting one, there’s a very lucrative service – especially right now -- that you may want to add to your company’s service list. What is it? Property inspections. Why? Here’s some food for thought . . .

A Foreclosure Cleaning Business Owner’s Revelation

One successful foreclosure cleanup business owner in Atlanta revealed the following story. . .

She said she spotted a gentleman one day who was inspecting one of her rental properties. As is happening all over the country now due to the foreclosure crisis, she said the bank that held the loan on one of her foreclosure properties had closed up and their assets were being taken over by the FDIC (Federal Deposit Insurance Corporation).

She spotted a gentlemen, as she classified it at the time “snooping” around one of her properties with a camera. Curious, she said she practically accosted him, asking him what he was up to. As it turned out, the gentleman in question was a property inspector.

He’d just landed a contract to inspect 1,200 homes. His rate per inspection was $35. In case you didn’t do the math, that’s a contract for $42,000!

She was delighted to find out that they were in the same business (some form of foreclosure service). So, she said, they exchanged information and promised to keep in touch if either could throw work the other’s way.

HUD Property Inspection Rates

She was delighted to find out that they were in the same business (some form of foreclosure service). So, she said, they exchanged information and promised to keep in touch if either could throw work the other’s way.

This foreclosure cleanup business owner went on to relay that this gentleman, as nice as he was, had somewhat of a “deer in headlights” look on his face. Come to find out, it was because he was a small company and was simply in shock at the amount of work he’d landed so quickly for his small firm.

One final thing: His job was not to go inside and do a “thorough” inspection; he did what I call “drive by” inspections, eg, simply take pictures of each property to pass along to the bank/lender for their files.

In case this has piqued your interest and you want to add this to your foreclosure cleanup business list of services offered, following is a little more information about property inspections.

Foreclosure Cleanup: The 6 Types of Property Inspections You Need to Know About

There are generally six types of property inspections as it relates to property preservation: (i) Occupancy Inspections; (ii) Initial (iii) Vacant Property Inspections; (iv) Vacant Property Inspections; (v) Voluntary Pre-Conveyance Inspections; and (vi) Eviction Inspections.

How much you are paid depends on the kind of inspection you’re hired to do, as well as who’s giving you the work (eg, are they a middleman, or the primary vendor).

FYI, property inspections are discussed in detail in the foreclosure cleanup pricing jobs guide. The graph accompanying this article outlines HUD’s nationwide payment chart for property inspections (at the time of this writing; they can change annually).

Foreclosure Cleanup Business Owners: Advice on Pricing Your Property Inspection Services

FYI, the figures cited here are the ones used by primary contractors. So, keep this in mind when you are pricing your property inspection services because you don’t know if you’re being hired by a middle man, or the main vendor.

For example purposes, let’s say you’ve been hired to do Occupancy Inspections (Exterior) by a larger property preservation company. This entails basically verifying whether or not a property is empty or occupied. All you’ll have to do is check off the applicable boxes on a form. See HUD’s inspection form to use as a sample.

Note: Many property preservation companies will either have their own inspection forms (all properties aren’t HUD properties), or will want you to submit your own form.

The HUD form at the above link will give you a good idea of what an inspection form should look like just in case you have to create your own. Notice that HUD’s form (at the bottom) can be used for several different types of inspections, which is pretty convenient.

Larger Companies Routinely Outsource Property Inspections to Small Foreclosure Cleanup Companies and Other Niche Real-Estate Services Businesses 

Larger preservation companies may subcontract out work to smaller foreclosure cleaning companies (like yours) for what seems like a few measly dollars (eg, $10 per).

BUT, what if they give you a list of 500 homes . . . to be inspected on an ongoing basis. That’s $5,000 . . . for just the first round of inspections. And, you might have to inspect them every three months or six months. So keep this in mind. Where you can make good money here is on bulk orders.

A Word of Caution about Adding Property Inspections to Your Foreclosure Cleanup Business List of Services

If you get a call to inspect five homes, initially, you may not think it’s worth your time. But look at it this way: if a lender is calling you to do the initial inspections, this gives you the opportunity to bid on other work you notice around the property as well, eg, boarding up windows, maintaining the lawn, changing the locks, etc. This could lead to thousands of dollars more in work.

For this reason, think carefully about adding property inspections to your list of foreclosure cleaning services. It’s so easy to get so busy so quick, that you can’t keep up.

As with every aspect of this business, be careful and take someone with you each time you go to inspect a property, especially if it’s an interior inspection.

Continued success out there on the front lines with your foreclosure cleanup business!

Learn more about why companies need inspections done on foreclosed properties in the video below.

Why lenders need inspections done on foreclosed properties

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      Pre-purchase inspections 7 years ago

      Yuwanda, this is a compelling tale of how the world should be thinking in terms of economic hardship. You still can prosper if you are prepared to think outside the box and be creative.

      Many Thanks,

      David

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