“I really want to start a company cleaning and fixing up bank-owned homes but someone told me that I need to have a general contractor’s license to do this.  Do I need a license?  How do I find out if I need one and how do I get one?”

- Billie

Hi Billie;
 
Great question - let me try to answer it for you:
 
The Foreclosure Cleanup Cash program covers how to start up two types of REO services: 1) cleaning up foreclosures (removing junk, cleaning the inside of the house and yard cleanup) and 2) property preservation services (minor repairs, painting, some remodelling, etc.)
 
If you're just providing the first kind of services (cleanup only), you won't need a general contractors license as this is a non-specialty service.  If you're providing property preservation services, some states do in fact require a General Contractors license if you're performing work over a certain value or if you're contracting out the work to another trade.  Otherwise, you may be able to perform basic “handyman work” (such as small repairs) if it’s under the specified value; usually under $1000 or $500 but make sure you check with your state’s requirements first.
 
What many people do when they're first starting out in the REO industry is just offer cleanup services first until they start to generate income and build a customer list.  During this time they'll work towards becoming licensed (if required by their state) and once they're ready, they'll get their license and then offer property preservation services. 

In order to find out if you need a license, contact your state’s licensing department (the Foreclosure Cleanup Cash program lists direct contact information for each state for the appropriate licensing division).  Here you’ll find out which trades require a license, how to get a license and how long the process takes.  Some states are rather strict and require a few years’ of experience in your trade and others simply require classroom hours on topics such as contracts and business law.  All states that license contractors generally require successfully passing a proficiency test.

You're definitely on the right track thinking about starting a foreclosure cleanup company - there are many opportunities associated with this kind of business and lots of work out there.  It's one of the best ways to start making some good extra money (you can charge anywhere from $400 - $1500 for each cleanup, depending on the property and you can usually get it all done in one (long) day) and you don't need very much start-up funds or any type of specialty knowledge.  Once you start getting into offering property preservation services such as painting and minor repairs, the financial returns can be much higher.  It’s definitely hard work, but definitely worth it.