How to Add "Commercial Trashouts" to Your Foreclosure Cleanup Business
Thirty percent of the commercial mortgages due to reset in the next twelve months will not pass their refinancing tests. Trashing out commercial properties can mean large profits for the foreclosure cleanup industry.
According to an article from DS News, an in formative real estate publication that focuses on foreclosure trends and other aspects of the mortgage default servicing industry, $23 billion dollars in commercial mortgages will come due this year. This translates into the fact that right at two thousand commercial mortgage loans are set to mature over the next year.
Of those, over thirty percent will likely NOT pass their refinancing tests, according to Fitch Ratings, a global rating agency that focuses on data, research and credit opinions for the world's credit market and investors.
Commercial Business for the Trashout Industry
What does this mean for the cleaning foreclosures industry? In a word, PROFIT!
A foreclosure cleanup business provides services ranging from interior and exterior repairs, to maintenance, debris removal, securing properties via the boarding of windows and doors and changing locks, to occupancy and vacancy inspections, painting and more. Much of the banter around the foreclosure cleaning industry focuses on residential trashouts and maintenance; however, with the unfortunate dose of commercial mortgages scheduled to head for trouble this year, foreclosures cleaning on the commercial front can be a solid outlet for business contracts for new and existing foreclosure cleaning enterprises.
Commercial trashout and cleanup accounts can stem from office buildings, daycare centers, gas stations, retail stores, restaurants, multi-unit apartment buildings, and similar real estate.
Less Competition in Commercial Foreclosure Clean-outs
Commercial foreclosure cleaning accounts will have less competition because most businesses in the industry focus on residential trashouts.
Simple to Add Service to Existing Business
A foreclosure cleanup business owner can add commercial foreclosure clear outs to their list of services easily by simply ramping up on equipment and supplies and targeting professionals who handle commercial foreclosures.
For example, as a trashout business owner, start by compiling a list of commercial real estate brokers in your geographical area and reach out to them. Also, do a little digging and create a list of
commercial lenders in your city and contact them about your cleaning foreclosures business. Use the term, "Commercial Foreclosure Cleanup" in your literature and conversations with the professionals you contact.
Also, by browsing business sections of newspapers to see what's going on in the industry in your own town and keeping an eye on real estate multiple listing services online, you can fast become familiar with commercial foreclosures coming down the pipeline.
Win Mind Share and Ask for "the Sale"
Stay in touch with the listing brokers and agents of these properties. Win "mind share" by reaching out to them consistently with professional material and following up with a phone call to see if they have any questions about your services -- and to see if they need you to give an estimate on a commercial property. Always ask if they have a property needing an estimate. Ask for "the sale" every time, at the end of every conversation.
Network for Consistent Business with Larger Payouts
Also, consider networking at Chamber meetings, business breakfast meetings, realtor gatherings, etc., and announce this new commercial division of your cleaning foreclosures company.
Commercial transactions usually have a bigger payout, are more formalized, and can lead to consistent work once you're in good with a broker or lender.
How Commercial Differs
Note that commercial cleanouts will differ from residential cleanouts in that you will likely be dealing with larger spaces, smaller timeframes, and likely addendums to any contract you may present for signature. Also, you may have to work around security systems (i.e., a business being foreclosed on may be housed in a large commercial building, and your entry and exit may have to coordinate with front lobby security).
Further, you may have to clean industrial-sized equipment. For example, in cleaning a residential home, you'll be accustomed to cleaning standard-sized stoves, dishwashers and refrigerators. However, in handling cleaning and trashout duties for say, a restaurant, you'll be working with restaurant-sized freezers, refrigerators, stoves, hoods, and the like. This means your cleaning solutions will need to be stronger and you'll need more of them.
Be Aware of Environmental Rules
Also, in handling commercial cleanouts, you may have to dispose of materials you won't necessarily come across in a single family home. For example, with restaurants, you may have to dispose of tubs of cooking grease. Simply review environmental rules to ensure you're following proper procedures in disposing of materials that may be hazardous to the environment.
Roll-off Container vs. Vehicle
Another factor in working with commercial trashouts is the sheer amount of furniture and materials that may need to be removed from a unit. For example, if you're cleaning out a daycare center, you may have desks, chairs, books, file cabinets full of papers, toys, mats, etc. to dump. Ensure your vehicle is large enough to handle the job, or consider renting a roll-off container for the yard.
Lucrative Aspect of Your Business
There are several factors to consider if you decide to venture into commercial foreclosure cleanup. But with billions of dollars in commercial mortgages maturing this year alone, it can be a lucrative aspect of your foreclosure trashout enterprise.
Much success to you on the commercial front of the mortgage services industry!
NOTE: Throughout the internet and in real estate industry literature, you may see the names mortgage field services, property preservation business, foreclosure cleanup, foreclosure cleaning, foreclosure clean-outs, foreclosure clean, clean foreclosures, cleaning foreclosures, REO trashout, REO trashouts, field asset services, property field services, field service, and field services used interchangeable. The main thing to remember is foreclosure cleaning and foreclosure cleanup generally refer to smaller entities; while property preservation generally refers to larger entities.