Start a Foreclosed Home Cleanup Business

Two blocks away from our house sits an empty, foreclosed home. The side fence is falling down. A realtor we know showed the home and she said it is an absolute mess. This is just one example of thousands of bank owned homes across the nation which need cleaned up and sold.

Start a Foreclosure Cleanup Business

Business for cleanup companies is booming as thousands of people default on their loans and the home becomes owned by a bank – a very motivated seller. For every home cleaned out, there are a dozen others the bank hasn’t gotten to, or just doesn’t want to deal with.

The Real Cost to the Bank – and the Cost to Homeowners

The bank desires to unload the property and not lose any money on the transaction. Unfortunately, leaving the houses in the condition they are in will not result in a sale near going market price and the bank often cuts the price of the house to unload. The house in our neighborhood is priced at 25% less than the market value of the property. If the bank hired a cleanup company to recondition the property, it would probably make significantly more on the sale and not further depress home prices in the area.

What is the Business Concept?

You will be leading a crew to cleanup and prepare a house for sale. Your services would typically include cleaning all of the belongings and junk out of a house, but could also include services such as small repairs (e.g. holes in the walls), wall painting, new carpets, or landscaping.

Most companies who perform this service dispose of any junk from the house, but keep things of value (such as furniture, lawnmowers, or appliances) for 30 days before disposing of them. There is an added opportunity to benefit from the sale of these items through local second hand shops or through eBay.

How Much Could I Earn?

In the example I cited earlier, the home two blocks away is marketing for $40,000 less than going market value for a home of that size. Your company could fix up the home and the bank might be able to raise the price by $20,000 and still sell it. This provides an additional value to the bank which results in a higher willingness to pay for your services. Your company could charge from $1,000 to $5,000 to cleanup a home for resale.

How Do I Get Started?

You will need some industrial strength cleaning equipment and supplies to begin cleaning these houses. Additionally, you will need to either own a truck for garbage removal or lease a dumpster from your local waste removal company. You will probably also want to hire staff to perform much of the cleaning at the houses you are working with.

Start by selling your services to local realtors and community banks. Once you have sold to them, you will have some experience to work with larger lenders and financial services firms.

Related Business Ideas