How to Start a Foreclosure Cleanup Business

Foreclosures are a hot news topic right now. The TV news show 60 minutes did a piece on it in December 2008 that featured how successful foreclosure cleanup companies were booming businesses.

Lisa Ling did a story on home foreclosures for Oprah. The piece featured a foreclosure cleaning company that went from 3 to 73 employees in the blink of an eye.

With that in mind, following are the beginning steps to how to start a foreclosure cleanup business.

3 Things You Need to Do Start a Foreclosure Cleanup Business

Empty homes are magnets for crime, eg, arson, drugs, prostitution, vandalism, etc. This is one reason real estate companies, banks and homeowner associations hire foreclosure cleanup companies to come in and get a property ready to go back on the market. If this business interests you, do the following:

Step 1 to Starting a Foreclosure Cleanup Business: Name Your Business. The name of your business is extremely important. It should say exactly what you do, so that people will think of you first.

Business Naming Tip: Try to make "Foreclosure Cleanup" part of your business name. This name alone is already taken, but you can name yours, for example, On-Time Foreclosure Cleanup.

Step 2 to Starting a Foreclosure Cleanup Business: Get Licensed and Insured. This is not a business where you can wing it. You need all of these things for the following reasons:

3 Reasons You Need to Be Licensed and Insured

(i) To get contracts: Many banks and real estate companies won't hire you if you're not licensed and insured. As these are the entities with the bulk of the houses that need your services, you definitely want to meet their requirements.

(ii) To be covered in case of lawsuits: Foreclosure cleaning is a business where it's easy for an accident or other incident to happen where a lawsuit is possible. For example, if a worker gets hurt, steals something or your company inadvertently damages the wood floors in a house you're working on, you need insurance to cover any damages.

A foreclosure cleanup business is one where you do everything from install windows to hauling trash to winterizing a property. Some jobs take days, others take weeks. The point is, there are a lot of places/times where accidents and incidents can happen. Insurance covers these.

(iii) Professional business: You may be thinking, "Well, I just won't go after contracts with banks and real estate companies."

Newsflash! Even individual property owners will oftentimes ask if you're licensed and insured. It brands you as a professional, a business; not simply a man with a truck, for example.

Step 3 to Starting a Foreclosure Cleanup Business: Line Up Help. As mentioned above, this is the type of business where you will need to use a lot of professionals in different sectors, eg, painters, floor people, electricians, locksmiths, carpenters, etc.

Every job is different. So before you start, build up a rolodex of reliable contractors you can call on. Even if you're a handyman, a general contractor or just an all-around expert in many areas of home construction and repair, it's easy to get so busy that you can't handle all the work yourself. You'll need to outsource some of it - and this is where the real money is (but that's a subject for another article).

Everything You Need to Know about How to Start a Foreclosure Cleanup Business

Once you get these three things in place, get a website and start marketing your foreclosure cleanup company. Learn more about foreclosure cleaning in the NBC news video below.