Expert: Russel Ray - 2/23/2008

Question
Maybe you can send us in the right direction. My son and I would like to start a business cleaning up, painting and repairng foreclosed houses. Not interested in buying. Would like to work for the bank or the realtor only. any help you can give us would be greatly appreciated.  

Answer
Hey, Jo.

You probably won't get any interest from the banks, which I've always found rather odd.

However, you can definitely find Realtors who are interested, especially those Realtors who specialize in foreclosed properties and other distressed properties.

The best way to get started is to look like you've been doing it for years and years and years. So don't go begging for work. Just send them a brochure in the mail and let them wonder why they haven't worked with you previously. Do everything you can to beat your competition, be it by price, by working outlying areas where no one wants to go, by being available on weekends or weekdays before or after regular business hours, and by being available 24/7 by phone. Note that you don't actually have to answer your phones in the middle of the night (although I do), because occasionally people are on the phone or in the bathroom, or whatever, which means that a call occasionally goes to voice mail. Just make sure that you return all calls within a very reasonable amount of time; remember that real estate doesn't sleep, and in this type of market, many Realtors don't sleep either.

You can also differentiate yourself by price, but you'll really have to know what your costs of doing business are and what your competition is charging. I've always started out as the lowest-priced company, but not by much. What I'll do is call my prospective competition and get their prices, and then set my prices, say, $15 higher than theirs, and then I include a $20 discount coupon with my brochure, thereby making me the least expensive by a whopping $5, which quite often means something to many people. Depending on the industry and how much you charge, you can set your prices even higher and then provide an even better discount. So if the competition charges $500 for a 1,500-SF house, you could charge $550 and then provide a $75 discount coupon to make yourself the lowest by $25.

It should be fairly easy to find the Realtors who either have, or specialize in, foreclosed properties. Check the open house section of your newspaper first and look for "foreclosed" or "bank owned" or "REO." That's a good place to start.

Hope that helps. Feel free to come back for more help as you start doing things and I'll help wherever I can.