Kansas City, Missouri.

Home to great barbecue, the reigning American League champion Royals, and Schlitterbahn – the site of the world’s tallest water slide.

But Kansas City is also home to, well, homes. And not just any homes, but abandoned homes. Lots of them.

The numbers don’t lie.

Graph abandoned homes

Last summer the city boasted the fourth-most abandoned homes in the country, with a 36 percent rate on foreclosures vacated. That percentage trailed only Wichita, Kansas (49 percent), Portland-Vancouver-Beaverton, Oregon-Washington (37 percent) and Birmingham-Hoover, Alabama (37) percent).

Depending on which way you look at it, foreclosed homes can either be a bad thing or a good thing.

To some, foreclosed homes may come across as cold, dark, and downright creepy. To others, foreclosed homes present an opportunity. While it’s never a good thing to see someone lose their home, the outpouring of foreclosed homes offers lucrative job opportunities.

That includes the cleaning business.

Did you know you could potentially make anywhere from $250-$2,000 for each foreclosed home you clean out?

If you’re thinking of starting your own foreclosure cleanup or property reservation business in Kansas City, consider these tips.

Seek the bank, because banks seek to hire foreclosure cleanup businesses

Like any place that is being rented out or sold, that place needs to be cleaned before hitting the market. Foreclosed homes are no different. Homes that have been foreclosed upon are in need of, at the very least, some clean up, repairs and basic maintenance before they can be put on the market.

Most of these homes are oftentimes left vacant, and their condition worsens by the day because not many banks have the resources or time to devote to cleaning them. As a result, banks lose money when they aren’t able to sell a foreclosed home.

In that event, banks seek to hire foreclosure cleanup businesses. Since homes are continually being foreclosed upon, there is a constant need for those willing to provide cleaning services.

You’ll want to locate and start building a relationship with the local REO (Real Estate Owned) listing agents in your area. Check out the REO Industry Directory for Kansas City, or see listings on Zillow.

REO companies

What to expect before starting a foreclosure cleanup business

Before you go diving into something you want to make sure you know what you’re getting into, right?

With any cleanup project, you can expect some cleaning. In the case of a foreclosed home, the amount of cleaning and what needs to be cleaned really depends on how long the home has been in foreclosure and left abandoned.

The longer a home is left unoccupied, the dirtier it gets, thus creating more work.

Indoor projects you could expect include painting, carpet cleanup, general household maintenance and trash disposal. With that, consider a residential roll-off dumpster when it comes to junk removal and home clean outs. These dumpsters are perfect for disposing any type of furniture and other household materials.

They’re also useful for landscaping projects, which are also expected with cleaning out a foreclosure. The removal of concrete, asphalt, dirt and general yard waste calls for a landscaping dumpster rental. Check out these great dumpster rentals in Kansas City.

Roll-off dumpster rental

Getting started on a foreclosure cleanup business

Contact the HUD (Housing and Urban Development) office in Kansas City or real estate agents in the area that specialize in HUD foreclosures. There you will find out how to get a contract as a cleaning service.

You can also contact banks, which will not only let you know what you need to do to obtain a contract, but whether or not your services are needed.

Establish your cleaning business

Next you’ll want to set up your business structure. In other words, what legal entity are you going to operate under? The most common legal entities are sole proprietorships, S or C corporations, general partnerships, and LLC (Limited Liability Company).

The LLC is one of the most popular entity structures because it provides the best layer of protection for your personal and professional assets. The LLC not only combines the benefits of the corporation structures but eliminates some of the negative aspects as well, allowing losses to be passed through to the people in the company. This means that they have the ability to claim the losses of the company on their personal tax returns.

Business structure

Employees or sub-contractors?

Deciding on whether to operate with employees or sub-contractors depends on your situation.

Employees will work for lower pay but you may have to spend a lot of time in the beginning training as you get started. Sub-contractors can usually help offset costs. They have most of the supplies you’ll need to get going and, since they own their own business, they’re already skilled at a specific trade.

Another option, of course, is to do the work yourself.

Other resources for starting a foreclosure cleanup business

Still in need of some motivation?

Don’t worry, there are plenty of resources available at your disposal if you’re looking to start a foreclosure cleanup business.

Check out Kansas City’s Business Resource Guide for a breakdown on starting your own business in the city. There’s also plenty of books on starting a foreclosure cleanup business, including “How to Start a Foreclosure Cleanup-Property Preservation Business” and “How To Get Into The Property Preservation Property Industry And Not Get Screwed”.