Bank work versus local work as the volume source for a new cleanout crew

Question

For someone turning a truck and trailer into a real cleanout business, there are two distinct paths, and they tend not to mix well with one rig. Path one is bank and servicer work. Foreclosure and REO volume has been climbing, with repossessions reported up roughly 45 percent year over year going into this year, and the outfits managing that inventory need trash-outs on a schedule regardless of demand elsewhere. It is steady, high volume work, and getting on the vendor list is the hard part. The price is set by somebody else, the paperwork is heavy, and payment often takes a while. Path two is local work: flippers, small landlords, property managers handling turnover. The crew sets its own price and typically gets paid within a week or two, but the phone can go quiet for stretches, and every job is a fresh negotiation. A new operator generally cannot chase both effectively with one trailer. Local work tends to be the better starting point for someone building relationships and cash flow quickly, since bank vendor programs usually require capacity and a track record before volume shows up. Once the crew can run two trucks, adding a bank vendor relationship on top of a local base is a more sustainable way to smooth out the local slow stretches.

devon_pierce · Answer

Local, and it isn't close for a crew with one trailer. The bank lists reward capacity. If they hand a contractor four properties in a week two counties apart and only two get done, that contractor comes off the list, and getting back on takes longer than getting on the first time. Local flippers will tolerate "I can start Thursday" because they're waiting on a permit anyway.

stephen_ok9 · Answer

The part I'd want him to look at before deciding is how long the cash sits out. On the servicer side you're often fronting the dump fees, the fuel and the labor, then invoicing and waiting. Net 30 or worse is normal in field services from what I've read. So the question isn't which work pays better per job, it's how many jobs of float he can carry with one truck and no line of credit. If the answer is one, path one is a trap for him this year, no matter how much volume exists.

paulgrant17 · Answer

Naive question since my first rental hasn't even turned over yet. Is property manager turnover cleaning the same business as a trash-out? I had it in my head as one thing, but the way @nicole_adeyemi wrote it they sound like different jobs with different tools.

omar_haddad · Answer

@paulgrant17 they overlap but no. A trash-out is muscle and disposal, you're moving somebody's abandoned couch and forty bags of whatever out to a trailer and paying by the ton at the transfer station. Turnover cleaning is detail work, appliances, grout, blinds, and the customer is judging you on how it looks under the sink. Same client sometimes, different crew skill.

The reason I care: guys who are good at trash-out are often bad at final clean and they bid it like it's the same job. I've had a cleanout crew leave a house "broom clean" and then paid a second crew $340 to make it show-ready. If your mowing guy wants both, he needs two price sheets and probably two people.

dpatel_re · Answer

Property manager turnover, on the grounds that it's the only one of the three where demand doesn't depend on anyone's decision. A flipper decides whether to buy. A servicer decides how to route work. A tenant moving out is just a date on a lease. Turnover runs somewhere around $1,750 all in per unit on average with cleaning as one line of it, and a PM with 80 doors is generating that steadily whether the market is good or bad. One caution. PM work is priced hard because they're comparing against whoever cleaned last month, and they'll drop a vendor for $25 a unit. The margin is thin and stays thin. What's being bought is a schedule that can be planned around, which is worth real money when a truck payment is on the line.

jordan_ellis2 · Answer

Six months of watching this from the sidelines and the thing I notice is that everyone who's actually on a servicer list got there through a person, not an application. Two of the crews I've called said they were subcontracting under a bigger regional vendor rather than holding the contract themselves. That seems like the real answer for a one-trailer guy: sub for someone who already has the relationship, eat a cut, learn the photo and documentation requirements on someone else's paperwork, then decide.

kevin_lombard · Answer

What does "photo and documentation requirements" mean in practice? Is that just proving you did the work?

samantha_ruiz · Answer

@kevinlombard proving you did the work, and proving what was there before you touched it. On my last two REO-adjacent buys the previous vendor's file had before shots of every room, a count of what got hauled, and dated after shots. Part of that is so nobody bills for a load that never left, part is that abandoned personal property has rules that vary by state and the file is the record if someone shows up claiming their grandmother's ring was in the dresser. Which is exactly why I'd send @nicoleadeyemi's guy at local investor work first. On a flip nobody is going to sue him over a dresser. He can learn to price a load and load a trailer fast before he learns to run a compliance file.

bmoreno23 · Answer

I'm the guy in this thread with no truck and no crew, so take the vote for what it is, but I picked hoarder and estate cleanouts. Everybody in here is talking about clients who buy cleanouts constantly and therefore know exactly what one costs. A family clearing out a parent's house buys one of these ever. They're paying to not deal with it. That's the only version of this where a new operator sets the price instead of matching it. Bad news is you find those jobs one at a time.

ehernandez74 · Answer

@bmoreno23 that's the answer worth giving, with one worry. Estate and hoarder jobs are the highest variance work in the category. Bid the visible pile, then get into the crawlspace. @omar_haddad probably has a story. The better landing spot is local investors and PMs, mixed, staying boring for two years. The distressed pipeline growing is real and it does put a floor under the work, but a floor under demand doesn't put a floor under price. What gets repeat calls is showing up on the day promised and leaving the house in the state described. That sounds like nothing until you've been the one waiting on a crew that didn't come.

Bank work versus local work as the volume source for a new cleanout crew

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