I was just watching the mid-day news and saw a report on small contractors who are making big money, working on foreclosure homes for banks.
There was one woman who had a crew of three people doing “trash outs”, bagging up everything that’s not nailed down and putting it in a dumpster. This service does not including cleaning the house, just removing trash from the house and yard.
She said that they were doing six-seven homes a day and that she expected to gross over half a million this year.
Another contractor was doing basic rehab on foreclosure homes. He said that he was making much more money than he ever had on standard remodeling.
It’s all about getting the homes ready to sell, ASAP.
Replies
I saw something about that too but I am really skeptical about the amount to be made doing it.
We checked with some folks we know at out local banks before we closed up shop and they were paying someone $250-500 per house to do it. Heck, it costs that much to dump a truck load of trash around here. I figured if you dumped it along side the road you could make money but not by doing it legit.
Other holdup in our area is EVERY job over $1,000. needs a permit which is costly and not timley to get...need plans, product approval docs, etc. Once again, if you did it under the radar you could make money but my luck I would get caught.
I guess it depends on the number of foreclosures coming on the market every month in your area. And the number of people willing to contract low end refurbishing jobs.
One thing for certain; the banks want nothing to do with managing properties they acquire by default. They only want to get them off their books ASAP, to avoid going further in the red.
With those motives clearly present, it becomes pretty simple to create a small business which caters to a bank's specific requirements. The contractor doesn't have to spend any time with the client, just work through a punch list and collect a check.
R U saying that you need to get a permit to clean up trash?!?!?!?!
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that doesn't surprise me for florida, they are worse than california for some stuff.
Piffin,
Not exactly but if you park a can (dumpster) in front of the house you will definitely get a call from the County and face some kind of fine (around $250-500) if you didn't have some kind of permitting.
If you could bring a truck and get in and out in one day you would probably be OK but anything overnight would draw too much attention and someone would bust you for it.
Mike
Edited 6/8/2008 4:10 pm ET by Oak River Mike
Piffin:
In NJ, I have to get a permit from the state Department of Environmental Protection in order to haul my debris to the county transfer station. There are strict rules for the permit and at the transfer station. Plus, I pay by the ton (currently around $77) and I pay a state recycling tax along with the regular sales tax. It beats paying for a dumpster, but it is a big PIA.
Some towns in NJ now require that I fill out paperwork when I get a building permit that indicates how the debris will be collected, who is doing the hauling and where it is going--this is before I've even started working! Gotta love this state.
John
My dad has not been in biz in years in NJ but he told me the carpenters do no hauling the Homeowners had to get someone else to do that, He said a carpenter picks up nothing and takes nothing home in his truck .
I used to clean up everything when i worked there and haul it to the dump. No more. I still do this in OR though
B:
I suppose some carpenters rely on others to do the hauling or just get a dumpster service. A lot of us, though, get the DEP license and haul it away when we leave the jobsite. I have to fill out paperwork for each load when I go to the transfer station, and I have to go to different transfer stations depending on which town or county the debris was collected. Of course, my license only covers construction debris--I can't throw out anything else, even though regular garbage trucks are dumping right beside me into the same compactor. I'm sure it all makes sense to somebody...
John
Franks back in MI doing just that. He tells me the numbers look good. He said the important key is getting the services needed documented (pictures, pictures and more pictures) and then getting the billing in via software.
It makes sense...there's a lot of foreclosures and there are a lot of tradesmen and contractors that have left the business.
Bob's next test date: 12/10/07
How did he get started? Did he just walk in the bank with a sledge hammer?:>)
Sounds like nothing i'd like to do, but I do have that nasty eating habit. Right now i'm doing flyers and looking forward to a job that is supposed to start in a couple of weeks.
I don't know exactly how he got connected. I do know that the contractor told him that if he doesn't do it full time he doesn't want him. That means, he'll be so busy that he won't be able to frame or chase GC jobs. I'm hoping it works out for Frank. He's a very hard worker with a family to feed. The construction business hasn't treated him kindly since he decided to take the plunge. He deserves better. Bob's next test date: 12/10/07
We all deserve better. I just spent 4.5 hours putting out flyers today in 92 degree weather.
I have 5 kids to feed and I really enjoy living indoors. This year has been very tough to say the least.
The way contracting is going right now it would not be a problem boarding up houses full time.
I'm starting to look into possibly buying a few houses with hard money to flip, just so I can get liquid again.
"I'm starting to look into possibly buying a few houses with hard money to flip,"You are going to have to buy them at .25 on the dollar to leave room for a huge discount and profit. I really can't see where the opportunity is in a falling market and I know MI is still falling. I've got a lake lot you can build on if you can find some money to fund the spec. You don't have to make payments on the lot. You can pay it off when you sell the spec. Its up in Lapeer County...about 50 minute drive from you. You probably could make 15 or 20 on the build. Bob's next test date: 12/10/07
My realtor is finding them. Its not easy but he comes up with some. I have to get back in the game. I'm not stopping with 6 houses. I just need to find the money.
I think i'd really be weary of a spec on the lake right now. Sounds like it could be a good deal but once again, I cant get liquid.
I'm just talking about some starter house in Ferndale so I can get liquid enough to get into some more cashflowing properites.
Don't spec it. Find a retiree buyer and do a fixed bid build for them. Its a perfect setting for a passive solar "green" home. Max one bath. Bob's next test date: 12/10/07
I'll keep it in mind. Might be a good project to do. Which lake is it on?
Hemmingway Lake in the Northwest corner section. Google Cusenza dr, Otter Lake, MIor http://www.grandblanchomesonline.com/view_vl.cfm?mls_id=faar&MLS=05070766 Bob's next test date: 12/10/07
Any suggestions as to advertising for this?
I like your idea of finding a retiree.
I'd start with a free Craigslist ad. I'd post a different one every day in the real estate section. I'd explain that another lot down the street sold for 130k about two years ago. I'd push the "you never lose with lakefront property" story. The Auto companies have their own newspaper in the Auburn heights area. I'd market to them. Bob's next test date: 12/10/07
How busy are you right now? I'll give you a call this week, maybe we can get something going. Anytime better for you to talk? Arent you 2 hours behind me in Texas?
Craigslist is great, I just reposted my skilled trade ad there and added one to the RE section.
Mark call me anytime. We are Central Time: one hour behind you. Bob's next test date: 12/10/07
Edited 6/11/2008 8:49 am by Jim_Allen
Got it.
Is that really the kind of work you'd want to be doing, though?
In MI, you either sit home or find like a foreclosure to close up. According to Frank, every job will be different. He is given a schedule of payments: per sq ft, per doorlock, per cubic yard etc. Its a service business. He's decided to do that rather than frame house at a net $2.00 per square foot loss LOL! Bob's next test date: 12/10/07
Sounds like hard times, for sure.
Glad I came west as a young man.
$2/SF isn't really a big loss, is it? I mean, a guy could get by for a while on that, ride out the recession and try to make it up on volume!
"...try to make it up on volume!"I was in need of a laugh, I love that.
What's wrong with that?
I wouldn't, but only because I have plenty of work with my hadful of really nice customers that all know eachother. But I'd rather knock out a punch list for a banker than have the customer following me around asking what I'm doing and why and how. It seems to me like pretty good work if you can get it and it pays well. --------------------------------------------------------
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What's wrong with that?(quote)Nothing I can see, but on the other hand......your projecting into someone's misery. It's a thing most of us have hated to see all out working lives as a carpenter/builders job is to make people smile not cry. Plus how long can it last?.....The whole idea is built on dead dreams.........sucks IMO.
I wasn't really looking at the sentimental aspect of it. Granted, it's a sad situation, but I don't see the correlation between someone loosing the house and someone else fixing it up for the reselling. If anything, I see it as move toward revitalizing our suffering economy. It will make available a house that someone really can afford, who otherwise couldn't.--------------------------------------------------------
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It just doesn't sound much like carpentry to me, that's all I meant.
Just sounds like a way to make a buck.
"
It just doesn't sound much like carpentry to me, that's all I meant.
Just sounds like a way to make a buck. "
Youre right its not carpentry exactly. Its what I do but Im buying them. Thats what buying and selling repos is about. Nasty work.
Tim
""If anything, I see it as move toward revitalizing our suffering economy. It will make available a house that someone really can afford, who otherwise couldn't." If they can afford it after it is cleaned and fixed then they could afford it before that. Nice try but that is a rationalization about turning a profit on the situation.
They can't get your Goat if you don't tell them where it is hidden.
If they can afford it after it is cleaned and fixed then they could afford it before that. Nice try but that is a rationalization about turning a profit on the situation.
It wouldn't be the same person buying it as the one who lost it. Also, buyers who can afford more aren't going to buy a dump. No matter how you look at it, boarded up forclosures are bad for the neighborhood and bad for the economy. Cleaning them up and getting them back on the market is good for both. --------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at TedsCarpentry.com
Maybe the economy has to fail before we change. Propping up a sick model isn't necessarilly good in the long run.
Maybe the economy has to fail before we change. Propping up a sick model isn't necessarilly good in the long run.
Point well taken.
I still argue that it's better to fix up the place and resell it, than to leave it sit in squalor. Even better would be that somebody didn't lose their home in the first place. Fixing the economy would be the best of all. --------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at TedsCarpentry.com
Is that really the kind of work you'd want to be doing, though?
It's not what I'd choose but I've had to do a lot less desireable kinds of work in the construction industry, when business has been slow.
I posted the basic information to help anyone who might need a fresh idea or point of view on how to begin a simple, money making business, or add another source of work/income to their employment picture.
This is mostly inside work in unoccupied houses. Any part of it can be subbed to other trades and still make some money for the contractor.
A lot of it is just being readily available and responsive to the bank's scheduling needs, getting in and out on time.
Watching and listening to the enthusiastic contractor who was interviewed for the TV news story, I'm thinking that there's some serious money to be made by anyone who has some basic knowledge of the different trades and decent communication skills.
Of course we'd all like to be building new custom homes in ideal conditions for respectful, appreciative architects and home owners while making big money and paying everyone top rate with great benefits and percs.
But while waiting for that cow to jump over the moon, we've all got to make a living.
Edited 6/5/2008 7:36 am by Hudson Valley Carpenter
But while waiting for that cow to jump over the moon, we've all got to make a living.
More true words could not have been said...
Mike
I looked into this (scrapping out foreclosures) about 3 months ago. There are about 3 big outfits that handle the foreclosures for the banks. Got a look at a contract and said no thanks. Everything in the servicers favor. Nothing in yours.
They were looking for someone that would do all of it. Kicking people out, locking up, maintenence during the down time. As Jim said all per lock, yard, etc. Prices are pretty well set by HUD. One thing they were pretty adamant about (and scared me off) was that you were not to take the owners personal property. Well, who couldn't say that aunt Mary's POS couch/urn/vase was a treasure. After the fact.
I'm not cut out to put families to the curb.
I'm not cut out to put families to the curb.
I'm certainly not interested in doing that either. This is the first I've ever heard of that kind of contract with a bank and I'm somewhat surprised by it. In every state where I've lived, evictions are done by the county sheriff's deputies.
That's my understanding, too.
Also, I thing the part about not being alowed to take anything that belongs (belonged) to the previous owners refers to keeping it for yourself. Of course, you're allowed to take it to the dumpser.--------------------------------------------------------
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>>In every state where I've lived, evictions are done by the county sheriff's deputies.Perhaps its different from state to state, and town to town.When I was a landlord in Ohio, I evicted one tennant. The court order that is needed for an eviction is called a "Forcible Entry and Detainer". It empowered the Bailiffs to enter the premisis with the plaintiff/landlord, and to detain the defendant/tennant WHILE THE LANDLORD or his employees emptied the contents into the front yard.So evicting the people was done by the deputies -- the hard work was mine. Sure, there was a provision in the court system, that I could also hire the Bailiffs/Deputies to carry the belongings. But their price was astronomical. (IIRC, it was above $20 per man per hour, and that was in the early 1980's.)It was one of the worst days of my life.
Politics is the antithesis of problem solving.
When i was young in NJ i remember seeing furniture on the curb where people were throw out of there apts. They just moved it all on the curb and they had to deal with it. In the old Abbott and Costello shows they always kidded about MR Feilds the landlord going to throw them out.
It was supposed to be based in Paterson NJ and it was all to real to me. Even when i was married and lived in places like that i could imagine them throwing one out into the street. They got "Rocky" type characters to "help" you
Put in that perspective, it's a completely different story. They couldn't pay me enough to kick a family out of their home. The way I see it, the banks made the bad loan and it's the banks who shoud pay the price, not the unfortunate people who just wanted a home of their own. If the home is already vacated, then fixing it up and getting it back on the market is a good thing. But if the people are still living there, no way would I be the one to put them out. I just couldn't do that to another human being.--------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at TedsCarpentry.com
I was just watching the mid-day news and saw a report on small contractors who are making big money, working on foreclosure homes for banks.
Yup, and I believe everthing that is on the news without questioning it. LOL!!
I did an estimate for a local realtor a few years back who did this stuff. Actually his wife was the realtor, he just co-ordinated his high school son and football buddies on nights and weekends to work a little above minimum wage to "trash out" and sling some paint. Not "flipping" but preping houses, and then his wife would get the listing.
He was upfront that he had no intention of hiring me, and would pay for my time, to get an estimate from a legitimate contractor, to show the bank that this particular house was not worth saving.
Bowz
Yup, and I believe everthing that is on the news without questioning it. LOL!!
While I understand your cynicism about news reporting, I believed the two contractors who were interviewed, on the job, about what they were doing and how well it paid. Their enthusiasm was very evident.
If they had wanted to deceive anyone, why would they volunteer information about their success? That information is only going to hurt someone who tries to hide income from the tax man.
That's what makes them and that news story credible to me.
That's what makes them and that news story credible to me.
Could be, my comment was more tongue in cheek about contractors talking about how much they are making. Nobody talks about the times they lose.
I mean, if I had a ticket on a gravy train, I sure wouldn't get on the news and tell everybody else.
Their enthusiasm was very evident.
Yes, today I am cynical. (lots going wrong) Reminds me of a friend ofDW's who sold Mary Kay Cosmetics. For something like 3 years she bugged DW to get into it and always was "making money". When she finally quit, she confided that all in all she probably would have been better off at a minimum wage job. But most of the time she gave the impression it would be nothing to use $20 bills as toilet paper.
Bowz
The guy Frank is subcontracting with has subs everywhere. He says he has guys making 100k with one crew. He has guys with as many as five crews. He has some guys who have only one crew and isn't making much of anything. That same story would apply to every service industry crew in every trade. There are framers making good money with one crew (not in MI) and there are guys that couldn't put gas in their truck with one crew. It all depends on how efficient you are and how hard you work at it. Bob's next test date: 12/10/07
It all depends on how efficient you are and how hard you work at it.
Well, there's also local economics at play. If a person wants to enjoy a quiet life in a rural setting, he/she will usually have fewer opportunities in our trades and more competition than is healthy, for the amount of work available.
That's one of the thoughts that caused me to begin this thread. I know any number of skilled carpenter/contractors who live in rural areas and need to explore every option that appears, in order to have a very broad range of economic opportunities.
I had a guy pull up beside me at the dump with "nice"stuff from a foreclosure. He had a large trailer full of misc. house stuff.
The guy that worked at the dump came over and wanted alot of it but said he'd get fired if he took anything and got caught.
That might explain how the "trash out" contractor is making some of her profits.
I know of a few auctioneers who clean out foreclosed homes and sell the contents off at auction. One makes around $3000 - $5000 per week.