Hello everyone! My name is Rich and I am from the Portland, Or metro area. Ive been browsing this forum for quite some time, very interested in real estate in general, and currently own and run an automotive protective rubber paint company full time. We have been reading up on the 'foreclosure clean up and property preservation' industry and I thought it would be a great way to get started. A good way for us to get our foot in the door and make some more savings at the same time. My question is, is it still something worth getting into? Is there much of a demand for it? Browsing the internet the last few days it seems like it was extremely popular in 2010, which makes sense, but very few recent articles, videos, cheesy "how to build a trash out company guru" websites. Whats your input on this? Thank you guys so much!
Do you mean like a trash removal service for people who buy new houses? If so I would check out what @Dennis Adams is doing in Portland. I believe this is the same type of this as your talking about as a "trash out company". Good luck!
Ah thank you Robert! I checked out those 2 links, it seems similar, but according to what I've read there is (was) a legitimate calling with specific licensing and insurance requirements for this professional service with spelled out HUD guidelines stating basic service requirements, fee pricing, and rules to be followed. Building relationships and passing tests to be approved vendors for master contractors. Basically the master contractor or foreclosure agent will invite you to bid on a "clean out/trash out" job after the property has begun the foreclosure process. Sometimes it could be something as simple as changing out the locks or as intense as a full on 'hoarder' clean up.
Fresh out of high school and going into college in late 2008 I started a small "Handyman" business to earn some money to make bad decisions on the weekends. Soon, that small one kid shop grew into a full service asset management and property preservation business performing trash-outs, winterizations, board-ups, and full fledged construction/remodeling. I entered the industry at the perfect time just as the 2008 housing crash hit bringing me and my team of six guys unlimited work throughout my state.
The reason I got out of the business is because it is cut-throat and the deception was unheard of. I worked directly with national lending institutions and their asset management departments. You think you have a reason not to trust your bank because of their "hidden fees"? Try working for them. I still have accounts in collections for these banks to this date that I have not gotten paid on.
They pay is good but it is slow. If you are going into the business you will need the ability to float expenses for months. Some advice to you if you choose this route is read up on HUD Guidelines, code compliance and, of course, real estate. The reason I was trusted with such large amounts of work at such a young age and no reputation was because I knew what increased the value of their assets and what did not. I knew where the "budget" was best allocated. You will not get enough work if you are just doing trashouts. These guys like one-stop-shops where they simply send you a list and you get it done.
Lastly, as with everything, you need a CYA Policy. Document everything! Photographs, files and letters!
Thank you for the info Marcus!
@Richard Warner I had a large contracting company at one point, (before doing full time investing) we had 3 large accounts and echo everything@Marcus Curtis says. Also if you plan to invest in RE, you must sign a statement that you have no affiliation with an REO or P&P company for the last 24 months. At least that's the way it is here. I am glad to have been out of that business for much longer. It is not uncommon for the contractor to be used as the bank for the bank. You may have have 30-50k in receivables at any time, and they use this as leverage to get you to reduce pricing on monies owed. Now if you do it outside of HUD and for landlords you may find a business, but I think its more of a job you create for yourself more than a business. Just my .02 cents.
Too late, even more cut throat, low ball pricing now....the workload is down maybe 75%, along with prices.
Originally posted by @Jeremy Tillotson :
@Richard Warner I had a large contracting company at one point, (before doing full time investing) we had 3 large accounts and echo [email protected] Curtis says. Also if you plan to invest in RE, you must sign a statement that you have no affiliation with an REO or P&P company for the last 24 months. At least that's the way it is here. I am glad to have been out of that business for much longer. It is not uncommon for the contractor to be used as the bank for the bank. You may have have 30-50k in receivables at any time, and they use this as leverage to get you to reduce pricing on monies owed. Now if you do it outside of HUD and for landlords you may find a business, but I think its more of a job you create for yourself more than a business. Just my .02 cents.
Very well put!
Thank you guys so much for keeping us from a big mistake! I was weary about it after reading all the dates on all the info and this is what I assumed.
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