Trash Outs
The Vaunted "Clean Outs"
of Foreclosed Homes

Trash outs are generally understood to be the removal of all the debris (including personals and hazardous) at a foreclosed property. Some people also call them "clean outs". Normally these jobs are only performed just before an FHA home is conveyed to HUD, or after conventional home becomes a bank-owned property (REO). Prior to this, the mortgage company usually only removes hazardous materials and exterior debris in front of the house.

Conventional or FHA?

If the subject property has been financed by an FHA mortgage, then, before it is conveyed back to HUD, there is a long list of work that needs to be performed. One of those jobs are trash outs. Go here for more detailed information on these FHA/Final Condition work orders. The trashout includes leaving the interior of the property in "broom-swept" condition.

If the property has been financed with a conventional loan, there is also a long list of jobs that need to be done. Among these initial, or REO, services are trash outs. Go here for a complete list of the initial services that are typically performed on an REO property.

Subcontracting the Job

When we began working on foreclosed properties, we had little equipment for these larger trash outs, so we found someone who had a dump truck and a crew, and subcontracted the job to them. The biggest problem with this, is getting good quality and adequate quantity of photos. And this is no small thing, since we are paid on the basis of the photos we take.

When you give a job, or part of a job, to a subcontractor, it's always safest to take your own before and after photos. Also, it is best to visit the site during and at the end of the job, to take "during" photos, and to make sure the job gets finished well.

Get Free Help

We have a scrap metal collector that we call to bring his truck to large jobs. He and his helpers do quite a bit of the heavy lifting and metal debris disposal, and we don't have to pay for the labor or the dump fees. And he makes money on the metal. It's a win-win! We could separate the metal ourselves, and sell it to the scrap yard, but for us, this is more efficient.

We also found someone who took all of our tires for free. He filled up a shipping container with about a thousand of them, and shipped them to South Africa. He made about $10,000, and we didn't have to bother with the tires. Another win-win!

We have also used a junk collector, who sells second hand locally and on ebay. He picks out stuff that can be reused, and hauls it away for us. He makes money on it, and it's less work and expense for us. We would caution against posting photos or information about the property on websites like craigslist, since people who come to the home are likely to find out that this is a foreclosed home.

If you use any subcontractors or hired help, make sure that they are people you can trust. Having information about foreclosed homes is proprietary and you could be liable for disclosing this information, if damage were to be done to the property, and it could be traced back to you.

Hiring a Crew

One of the most significant differences between using a subcontractor and hiring laborers for trash outs (or any other work, for that matter) is when you pay them. We pay subcontractors when we get paid. Day laborers want to be paid TODAY. Also, we don't have to pay taxes to subcontractors; we do for laborers.

On the other hand, we have found that using a day-laborer service, has worked well for us. We have to pay a little more per hour, but we don't have near the bookkeeping to do. If you develop a good working relationship with the manager of this service, you will get the best quality of workers they have. And it doesn't take much training to fill up a truck or trailer.

Get the Best Equipment,
Tools, & Supplies You Can Afford

We started with one, then two, 4x8 utility trailers, and two towing vehicles. These worked for us for most of the jobs. As we said, we subcontracted out the larger trash outs to someone who had a dump truck.

After we had a few thousand dollars in reserves, we found and purchased a used dump truck. It isn't pretty, and it gets terrible mileage, but it can haul and dump 30 cubic yards of trash. With a crew of four laborers, we can finish most big jobs in one day, with two trips to the dump.

We've found that buying good quality 3 mil trash bags are well worth the cost. They don't tear, our crews can put all of the small stuff in them, and they eliminate the possibility of stuff blowing out of your vehicle on the way to the dump.

And one more thing — buy several good quality ratchet straps and learn to use them. They're one great invention...way better than ropes!

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