Starting a foreclosed property management business is filling a large niche market. With the number of foreclosure still on the rise, many mortgage companies and banks have properties that need to be cleaned and maintained for potential buyers. Starting such a company, like starting any company, requires some planning and preparation. However, if you are passionate about the endeavor, then a successful business can be launched.
Write a business plan. A business plan is a business operating road map. The business plan includes the business vision (also referred to as a mission statement), short-term and long-term financial projections, marketing and advertising ideas, a list of local competitors and their share of the local market, and the background of all principal owners of the business. A business plan will be required as part of the application process if you decide to seek outside financing.
Apply for all required state and local licenses and permits and choose a business entity status. Permits are required for any business to operate legally. Choose a business entity that matches the number of owners and the protection an owner wants. Two of the most popular entities are limited liability company (LLC) and sole proprietorship.
Join local business organizations and participate. Networking is important for any business, but especially so for a start-up. Join local networking organizations and attend the meetings and mixers. Offer your business card and introduce your business. Networking should be considered free advertising, and the connections made can result in customers.
Contact potential customers and introduce your business. You will have to be careful about who you approach with your services. Contact banks and mortgage companies with vacant houses on their books. Study the real estate ads in your local paper. Some towns list houses that are about to go to sheriff sale. Contact real estate agents who specialize in short sales. They will know which houses are about to go through the foreclosure process.
Tips & Warnings
- Make sure you are clear about the types of services you plan to offer. Cleaning the interiors of homes, outside maintenance services such as painting or mowing lawns and caring for flowers and plants, winterizing a home, and cleaning out personal belongings are options.
- If you discover a property that is in foreclosure, it is best to not approach the property itself, but any agency or bank that will be handling the property. Going to the property and offering your services is not a good idea. Many of these properties have not been vacated by the owners losing their homes and your visit might not be welcomed.
- Photo Credit Justin Sullivan/Getty Images News/Getty Images
How to Start a Maintenance Business
Many Americans dream of being their own boss and running their own profitable business. There are many different types of maintenance businesses....
How to Estimate Maintenance Cost for Rental Properties
The goal of owning rental property is to have more money coming in than going out each month. Besides taxes, mortgage payments...
How to Cut Grass for Foreclosed Properties
Providing lawn care to foreclosed property owners is part detective work and part sales work. Foreclosed properties rarely have signs or other...
How to Start a Property Maintenance Business
You can offer property maintenance services to small businesses that can’t afford a full-time staff. Decide what services you feel comfortable in...
How to Repair Foreclosed Homes for Banks
When a home goes into foreclosure, it often is neglected by the outgoing homeowners because they are no longer motivated to keep...
How to Work for Banks Renovating Foreclosed Homes
During periods of economic reversal, the number of homes subject to foreclosure increase dramatically. Homeowners are unable to meet their mortgage obligations...
How to Repair Foreclosed Homes for the Government
Government real estate owned (REO) foreclosures include defaulted FHA-insured single family properties. Referred to as Department of Housing and Urban Development (HUD)...
How to Start a Residential Property Preservation Business
According to the Mortgage Bankers Association, one out of every 200 homes in the U.S. will be foreclosed upon, and every three...
A Checklist for Winterizing a Foreclosure
Most vacant houses, such as foreclosed properties or vacation homes, must be winterized in order to prevent harmful damage caused by cold...