Operating a Foreclosure Cleanup & Property Preservation Companies - How to Get P

Posted by romeoben on September 9th, 2011

The foreclosure market has made starting and running a Foreclosure Cleanup & Property Preservation Companies a very lucrative entrepreneurial venture - there were over 175,000 foreclosed properties last month alone! The banks need someone to cleanup and fix up these properties prior to putting them back on the market.

But banks often pay 30 - 60 days after you service the property, and this poses some cash flow problems when you're first starting out. The larger banks and asset management companies generally pay 30 - 60 days after invoices are submitted (although most of them pay around the 30 day mark). Now most of the time this is OK, because these larger companies are generally sending vendors 10+ properties to service/clean out per month, but if you're just getting your feet wet, you'll need your money faster.

Unlike banks and asset management companies, smaller companies and investors generally pay upon completion of the project or within 15 days. Unlike the larger companies though, they may only send a few projects your way, but this is fine if you're starting out and carrying out most of the operate yourself (and in the beginning you will definitely have to do most of the get the job done on your own. Many companies I know that just started out asked family/friends to help out instead of hiring staff as they are usually willing to help you out and willing to wait a bit to get paid).

I would recommend targeting investors who have bought properties that they are intending to rent out or flip and/or smaller asset management companies in your area. Here are some ideas for carrying out this:

Look for companies or investors that "wholesale properties" - this is a group of investors will purchase a house (usually for cash) for way under market value and then turn around and sell it to another individual investor that is willing to put the time and money into the property to fix it up. You can find these companies by Googling terms like, "Wholesale properties + (your city)", "wholesale real estate + (your city)", "real estate investors + (your city)". You may have to sort through some unrelated links but this is probably the best way to locate these wholesale investors. Once you do, give them a call and tell them that you're in the Property Preservation Companies business and you'd like to offer them your services. You can also tell them that if they refer your services to an investor that buys one of their properties that you'll give them a "finders fee" commission (usually 10% of the value of the contract). The best thing about these investor groups or individual investors is that they will sometimes give you a deposit (25%-50%) to start the project and then pay you the rest as soon as the get the job done is done.






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