How I Started My Foreclosure Cleaning Business - On A Shoestring Budget (2 of 5)

We started out property preservation cleaning business in November of 2009. I initially started researching this business opportunity in October of 2009. I found a HUD Property Preservation ebook called “How to Start a Foreclosure Clean up Business” by Cassandra Black.

Note: I am not an affiliate of Cassandra Black – her eBook was just instrumental to getting me started in this business.

This book gave me some great ideas on how to start my property preservation business. Once I finished reading this eBook – which I literally devoured within 24 hours. I realized that this business what something that I could do and I could see it being a viable business. Meaning,

1. As long as there were vacant properties on the market that needed maintenance

2. As long as banks keep giving loans to buyers

3. As long as realtors rent properties to new tenants

There will always be a need for foreclosure cleaning.

I digress - Back to the purpose of this article. In October of 2009 I started to develop my business plan. Before I got started I had to first get familiar with the types of services that were offered by other property preservation businesses.

1. To complete this precursor, I did a search in Google to come up with several businesses and the services that they offered. Here is a list of property preservation services that you can offer in your business.

2. Then I took inventory on some of the basic things that I had that I could use to get started.

· Cleaning supplies- check.

· Push mower – check.

· General tools – check.

· Vehicle – check.

3. I had to get a general idea of their pricing.

I visited a few websites, but no one showed their prices online. Then I called one foreclosure cleaning business and the owner was nice enough to give me some information, but I he focused on rehabbing homes. (This was beyond the scope of my business at that time). So I keep looking.

Then found the HUD P&P Cost schedule and a FHA Price schedule which gave me a little more directionon what my pricings should look like – especially for banks that were working for HUD.

4. I also had to map out my strategy for building my business. For me my map depended on the resources I had to start my business. We actually started our business with property preservation inspections. We did not start adding property preservation jobs until around January of 2010. This gave us the opportunity to build profits to purchase more supplies and to learn more about the industry. Once we started adding property preservation jobs it was like a flood gate was opened. Our business started growing extremely fast.

I. Our customers liked how well we worked in the inspection business and trusted our work

II. While we were doing inspections I was applying for additional jobs to build up my client list

a. I emailed each company on a consistent basis. I emailed each company and thenlooped back around the following week for companies that did reply to my previous emailor needed additional information.

b. I always made sure to reply with an email template and the original email chain sothat the decision maker could see that I was consistent on trying to build a relationshipwith their business.

c. Along with emailing these companies I also called them to get more information on howto get started as a vendor with their company.

Stay tuned for more of my experience on starting my property preservation business.

1. General Liability Insurance: You will need to get general liability insurance for $1 millon dollars per occurance and $2 millions dollars Aggregate. I used a commercial insurance company called Bolt Insurance for my general liability insurance. I was refered to them from my Auto Insurance Company, State Farm and I have not had any complaints on their service. There are tons of companies out there, pick the one that best fits your needs.

You can expect to spend about $200-$300 per quarter on general liability insurance

2. Employer Identification Number: If you decide that you wil hire employees other than yourself and your spouse, then you will need and EIN number. This number is issued free and can be obtained form the IRS online. This is the number that you will also use to fill out all 1099 Forms used for tax tracking. All property preservation companies and banks that you will working with to report your income will ask you to complete this form.

3. A Truck: You will need a truck to haul away trash. You can still get started without a truck, but a substantial amount of profit is tied into hauling trash.You will also need the truck to drop off donated furniture to the goodwill or other consignment shops.

4. Build a Relationship with Your Local Dump: You will make a lot of trips to the dump so you will want to get to know where your local residential dump is located and get to know the people who work there. They maybe able to help you when you find yourself in a crunch.

5. Professional Image: When you go to the sites to complete work, it is recommended that you wear a uniformed t-shirt or polo shirt. You can get these made for pretty cheap from Cafe Press. The goal is that you create a plain simple professional image. You will be entering homes that have been recently vacant or empty for some time. Local neighbors will need to know that you are supposed to be there without creating alarm. A professional business shirt will help but them at ease.

6. Basic Cleaning Supplies: You will need a broom, mop, bucket, gloves and general cleaning supplies including trash bags to get started on the right foot. You can save time by ordering cleaning supplies from walmart, purchasing them and then picking them up at your local Wal-mart store.

7. A Digital Camera: One thing that I wished I would have done starting out was purchase a digital camera that had additional software that could edit the timestamp on the picures. I never found such a thing. It seems that most digital camera have gotten rid of their date and timestamp function - or I am technolgy challenged. Because I cannot figure it out.

What I eventually ended up doing was purchasing software to add timestamps to photos. This was after 3 months of wasting valuable time doing it manually. During our first 3 months we wasted so much time adding timestamps to photos or two of our bigger clients. If this client did not pay well, I would have taken the lost and stopped doing properties for them.

But this was not the case. At the time, I was literally too busy to stop and think about being more efficent with my time. Alot of my time was consumed with assigning work, staying organized, editing photos and getting work submitted within the due date.

I finally said enough. I sacrificed the time and did some more researching on how to add date and timestamps to digital pictures.

This was a life saver.

I invested in a program called Batch Photo and was able to upload several photos at one time. This has helped me submit photos to several of my clients and train others to take my place in this business without getting behind.

If you get the basics of starting a business right and stay organized you will be successful. You will also need a list of property preservation companies to apply to. Complete a DMOZ.org search for property preservatoin and sift through all of the companies listed to get started or purchase an ebook of HUD property preservation companies which includes the best to work with.

Visit our Property Preservation Business Job Contacts Blog

How I Started My Foreclosure Cleaning Business - On A Shoestring Budget (1 of 5)

13 Things to Remember in Your Property Preservation Business

HUD Property Preservation Cost Schedules - A Complete List