As far as the best business to start in the year 2010, foreclosure cleanup has to be among the top entrepreneurial opportunities, for a few reasons. The main one is that the home foreclosure crisis is nowhere near over. Proof?
Even though the housing sector is starting to make a very slow recovery, there are still millions of foreclosed properties that have yet to hit the market.
According leading financial industry experts like Standard & Poors and Moody’s, as of February 2010, there are an estimated 7.7 million homeowners who are delinquent on their mortgages. Yet, these are not being reported by banks as bank-owned (REO) properties.
Many lenders are purposely not foreclosing on homes because they don’t want to flood the market with more inventory because it will drive home prices down again. In short, foreclosure cleanup businesses are going to have a lot of work – for years to come.
Now that you know why starting a foreclosure cleaning business is going to be a good opportunity for years to come, here’s what you need to start.
1. A Business License: This is not a business where you can “wing it” without a license. In order to be taken seriously and to be eligible for things like foreclosure cleaning contracts from HUD and foreclosure subcontracting opportunities with your local housing authority, you need to be licensed as an official business.
Note: As of March 2010, many housing authorities around the country started to receive government stimulus money. This means local jurisdictions will have money to fund many projects that are ideal for foreclosure cleaning companies – and other real estate services companies like: Appraisers, Termite & Pest Control Companies, Building Contractors, Plumbers, Electricians, Roofing Companies, Lawn Care Companies, etc.
But, you must be a licensed company to even being to vie for any type of foreclosure cleaning jobs with these government agencies.
2. Insurance: Banks, lenders, real estate agents, etc., simply won’t even want to deal with your company unless it is properly insured. In fact, says a foreclosure cleaning business owner in Atlanta, “It’s often one of the first things they ask you for when they contact you about work.”
You also need it to protect you, your workers and your property as you grow your foreclosure cleanup business.
What Type of Insurance Does Your Foreclosure Clean Up Business Need?
The answer is, it depends. Minimally, you will need liability coverage and auto insurance for your vehicle(s). If you hire employees, you will also need workmen’s compensation. Each area of the country is different and every county has different requirements.
Call local insurance agencies that service your area and tell them about the type of business you’re starting. They’ll be able to guide you in making a decision about the type of insurance you need.
As far as what you need to start a foreclosure cleanup business, license and insurance is it as far as “getting in business.” Now, you’re ready to market to “bring in the business.”