Cleaning Out Foreclosed Homes: 5 Facts to Get You Started

With over a million homes in foreclosure during the first half of 2006, it’s no wonder that many people are trying to make big bucks by starting specialized cleaning businesses for foreclosed homes. These are businesses that make a home sale or auction ready, often cleaning up after formers owners who have left their houses to ruin or have been completely abandoned for months. Entrepreneur Magazine included on particularly successful firm – Cypress Service – in its “Hot 100 Fastest Growing Businesses” list.

You may think that this business is for you – kudos to that, but before you take the plunge, here are 5 Facts you need to consider:

1. You need a license, and all that jazz - it’s not just a matter of buying a mop and bucket at the Home Depot and scrubbing away. You will need a license, and get insured and bonded as well. Remember, you will be dealing with real estate companies and banks, who will want to do everything by the book. You may need up to $1 million in insurance (liability policy) and pay the proper employee compensation. Get a good insurance agent who specializes in such things to help you get started on what you need, plus a little extra coverage won’t hurt.

2. Speed is the key – these houses have been sitting around for ages. You’ll submit a bid for cleaning job, and once you get accepted, your clients will expect lightning-fast work. If you’re new to the business, you’ll have to work out the kinks with your contractors and workers before you get started. Have a back-up plan if they fail. The more reliable you are, the more jobs you’ll get in the future.

3. Work only with professionals - if you can do everything yourself, from painting and plumbing to electrical wiring, then great! If not, then you’ll need to subcontract part of your services. When choosing contractors, ask around for referrals and do complete reference and background checks. You will most likely be asked to produce certifications from your subcontractors, so it’s good to have these handy.

4. Be prepared - there’s more to foreclosed homes than just dirt or ruin – you may be faced with other dangers such a biological hazardous wastes, angry attack dogs or worse, emotional and angry owners. Over time, you’ll learn to deal with the latter, but when you first approach a home, never enter by yourself and make sure the house is completely empty. Have to proper paperwork with you and call the proper authorities if necessary.