# Cleaning foreclosed homes as an independent contractor?



## Clean & Simple (May 13, 2013)

A year ago I helped a friend clean foreclosed homes for a company. I enjoyed it but still felt I could offer more. She assured me there were only certain services they provided and wouldn't matter if you did more than what was required or not. She didn't keep her job for long because the company lost a lot of houses in its business. But this made wonder if it's better for me to get a contractor's licence and bid on jobs myself. I know it's risky but could I turn a profit on this since I would only have to cover cleaning supplies, a license, and liability insurance instead of having to deal with workers comp and paying my employees for those jobs? Any advice on this?


----------



## Tinstaafl (Jan 6, 2008)

You would be better served by posting your question on our sister forum, Preservation Talk. The folks there do what you're talking about and more.


----------



## thom (Nov 3, 2006)

Clean & Simple said:


> A year ago I helped a friend clean foreclosed homes for a company. I enjoyed it but still felt I could offer more. She assured me there were only certain services they provided and wouldn't matter if you did more than what was required or not. She didn't keep her job for long because the company lost a lot of houses in its business. But this made wonder if it's better for me to get a contractor's licence and bid on jobs myself. I know it's risky but could I turn a profit on this since I would only have to cover cleaning supplies, a license, and liability insurance instead of having to deal with workers comp and paying my employees for those jobs? Any advice on this?


No workmens comp? Are you saying you would do all the work yourself?

If you are thinking that your profit can be made only by not covering the cost of comp you are in a very high risk situation. What can you bring to the table that will give you a leg-up on other competitors? How big is the market now?


----------



## Driftweed (Nov 7, 2012)

Its a crowded cuthroat market. You can't "just do trashouts". Unles you sucontract to a lical preservation company.

Buy my truck and I'll teach you all you wanted to know about "creative" financing. 

Be prepared to front all costs for 60+ days.


----------



## CarpenterSFO (Dec 12, 2012)

Read the stickies on preservationtalk. Scary business, all kinds of ways.


----------



## Clean & Simple (May 13, 2013)

I understand that its a risky thing to get into but the competition I'm facing is mostly small business owners that have to deal with office leasing, advertisement, minimum wage, hr, etc. The list goes on. That would be risky because in order to turn a profit they need to request consistant work that not only cover those expenses but also make above it to take to the bank. As an independent contractor, I can offer same services for a fraction of the cost while still being able to make a profit. I can also request jobs as often or seldom as I like.

Now I have a very flexible job that I won't leave until I know for sure I am getting consistent work. I was able to keep up with the jobs before while still working a full time job. I'm aware what I'm getting into. But worst case scenario I just don't take off with this and have to go on to something else. I know I need a license and insurance. I also know the taxes are 13.3% of all income I make. This would be my responsibility, not the clients. 

While I welcome your comments, I need a little more specified information I can use. I know its risky but what risks are you seeing that I'm not seeing?. What can I do to be a better advantage?. I know thel services I would provide because I know what the other company didn't provide. Please give me something I can work with.


----------



## Driftweed (Nov 7, 2012)

We are trying. I do trashouts only, just what you are wanting to do.

Give me a chance to get off work and I can give you more in depth info (6 hrs from now).


----------



## Clean & Simple (May 13, 2013)

Thank you driftweed. I look forward to it.


----------



## Oconomowoc (Oct 13, 2011)

My Brother-in-law owns a company in Florida that does this exclusively. He employs 7 people and owns a lot of equipment and trucks. He works with banks for the most part.

What I can tell you are just the frustrations he shares with me. He's forced to compete with companies that bid so incredibly low it's amazing he even makes money. Often times he doesn't. That line of work doesn't require skill, it requires grit so barriers to entry are easy. "Easy" or lack of "skill" means low pay.

Getting paid is ridiculous. You want plenty of working capital to start this venture with. 

There's much easier ways of making money.

Mike


----------



## CarpenterSFO (Dec 12, 2012)

Oconomowoc said:


> ...He works with banks for the most part.... Getting paid is ridiculous....


Banks are the slowest payers in the universe, bar none. They make the Federal government look like Imelda Marcos in a shoe store. It takes 5 vice presidents to approve putting a quarter in a parking meter.


----------



## Driftweed (Nov 7, 2012)

Ok here we go. You do NOT want to do "property preservation". That is all encompassing work (winterizations, lawn care, lock changes, trashouts, etc...)

You just want to do the "fun job". Well, that gets tricky. It is incredibly difficult to find these guys. They do not advertise any whatsoever. Seriously. 

You have to network. Be the go to guy who can get it done on a sunday. I would suggest starting doing trashouts period. Don't bother advertising, network network network.

What you will need? 

A damn strong truck, & at least a 12' trailer. I would also suggest looking into renting a long term dumpster (the bigger the better). Why a dumpster? Because your going to get called friday to have 3 trashouts done by monday. And landfills aint open sundays.

Job expectations:

Don't think you can pick & choose. If you turn down jobs, no one will hire you. These companies are rated by their boss by performance.

Like maggots, human feces, and the smell of year old rotted meat? You better. Because at first thats all the work your going to get. They're going to test you by giving you the jobs no sane person would take. Smile, do it, & your in. Whine, or refuse & your out before you know it.

Expect to travel 100 miles to do a job.

You are also considered scum of the earth. Expect to talk to the cops alot. Absolutely no one respects a trash man. You compete & often get confused as a crackhead. 

Pay:

This is the fun part. Understand where you are on the totem pole. Banks give contracts to national, who sub to regionals, who sub to locals, who will then sub to YOU! Yup your 4th to sometimes 6th in line to get paid. 

Understand that when you bid you have to leave room for everyone to markup each other. Go to the hud site, I think the going rate is around $50/ cubic yard. But dont think for 1 second your going to make half that. You will more than likely make $20 if your lucky.

Stop and think about it. If you wall up a long bed truck to hold 6 cyds your might be able to make $120 max. Then you have to buy gas, pay landfill, cover the overhead of your business, set aside maybe 10% prifit, then pay yourself and your helper. That could leave you with a $20 paycheck each for a couple hours work. 

And then you WILL return to the property because you left a qtip on the floor, etc... 

On a 30 day pay schedule, its 30 days after your work has been inspected and passed. If you have to go back it starts the clock over.

Still interested?


----------



## CarpenterSFO (Dec 12, 2012)

So, DW, from your other contributions on C.T. it seems as if you do other work, not just trashouts. So why trashouts too? Dumb question, I suppose - we do what we need to do to make a living - but still, any special reason you ended up doing trashouts?


----------



## Clean & Simple (May 13, 2013)

A. I have done this work before (remember?) and my friends still do too. You must work for the wrong people because they got good money doing this sort of work. Ive seen them get fat checks for doing minimal effort, which is what upset me because i put my heart into any work i do and never saw that pay with my 9-5 job. As far as maggots etc, I had worked in a house that was found out to have rodents and a strong pugnant smell unbeknownst to the bank. My friend called the bank and without missing a beat they gave us a significant offer so we could push through. They were more than gracious to work with us. And why shouldn't they? Most people would shudder at the thought. They need to keep the contractor interested just as much the contractor needs to interest the bank. No you don't go around complaining but you sign up for certain services and work conditions. If the house condition doesn't meet the criteria, you have a duty to report it so the bank knows what needs to be renovated. The bank has to resell that home so they need someone willing to get the job done. They won't hurt from shelling out a few pennies to get you motivated since its only a fraction of what they would get from the mortgage. But with what you went through and only getting paid $20 why the hell are you still doing it? That just doesn't make since at all. That means you work 60 houses a month just to make minimum wage. 

B. You need a contractors licence for each state you work in. Even the lowest of banks consider that and wouldn't bother someone 100 miles away from them, even if its in the same state. Trust me, they have their own people. There's enough competition not to phone someone that far away because the distance alone is too risky for them to rely on you doing it. Again I'm not sure who you deal with but it seems pretty shady to say the least. 

And c. Not one of you answered my question. All I want to know is some tips on making a profit. Any little tid bits you found along the way. I do agree network is the key but I do already have my own contacts. I do intend on moving forward with this.


----------



## Clean & Simple (May 13, 2013)

Oh and I definitely agree with not picking and choosing. But I would still use my head. Like anything else, folks are out there with two hands in your pocket. A contractor is the one who names the price. I know I need to familiarize myself the competition and what I'm up against but at least I can make a fair price that meets their requirements.


----------



## griz (Nov 26, 2009)

Clean & Simple said:


> ...And c. Not one of you answered my question. All I want to know is some *tips on making a profit.* Any little tid bits you found along the way. I do agree network is the key but I do already have my own contacts. I do intend on moving forward with this.


Charge more than the job costs you to complete....:whistling

Labor + Material + Profit + Overhead + PITA= Cost

Your idea that you have little to no overhead will eventually bankrupt you...

I can't imagine anyone doing this "trash out" more than once.
You "jumped" at the banks offer on a maggot infested job...:no:
The "Bank" is the one who laughed all the way home....
You should have countered at twice their "offer".....

Please visit this site, they are your mothership....

http://www.preservationtalk.com/


----------

