A foreclosure cleaning business does everything from lawn maintenance to garbage collection, cleaning, power washing, gutter cleaning, repairs, and more.
The garbage foreclosure industry is proving to be a lucrative business option for hard-working entrepreneurs. With one in 25 homes in foreclosure, according to Michael Williams, CEO of Fannie Mae, and with millions of adjustable-rate mortgages poised to be reinstated in the coming years (creating the prospect of a new round of foreclosures), the new ones Foreclosure cleaning companies are perfectly positioned to have evergreen companies for years to come.
Although foreclosure cleaning is a burgeoning industry, due to the large number of jobs available, foreclosure cleaning can be a low-profit business if entrepreneurs do not price their services for profit. .
Pricing for profit can be tricky for new property preservation business owners who don’t know the ins and outs of how contracts are won, who gets paid first, where they stand on the totem pole to get paid, etc. .
A good tool to use in pricing garbage and foreclosure-type jobs is HUD’s pricing guidelines for property preservation companies, BUT, using this tool alone can be a serious mistake.
When using HUD guidelines to price jobs, business owners should keep in mind that the tables list the maximum amount that HUD will generally pay the PRIMARY contractor for a foreclosure cleanup job.
As a smaller company, business owners need to know where they are on the totem pole to actually get paid in order to know how to get paid using the tables. They must also learn to determine if they are the main subcontractor, number two in line, number three, etc. Not only will this help them figure out how to price, but it will also guide them in figuring out the best strategy to use to get jobs.
Foreclosure cleanup business owners can’t just look at HUD’s pricing charts and use those figures to bid, or they will certainly outbid a job and lose. Tables must be dissected effectively
Remember, HUD’s pricing guidelines for foreclosure cleanup are what HUD will pay, at most, for a service (although certain scenarios will allow them to go higher with supporting information). The amounts listed in the tables are actually for that prime contractor.
Anyone can set prices, but pricing “for profit” in the burgeoning foreclosure cleaning industry is an art. New foreclosure cleaning companies should plan to do their research so they can learn how to analyze HUD charts and price effectively to make a profit and get more cleaning business.
