Lawn care for foreclosures carries risks, rewards
Anyone who owns a home knows just how much work is required to keep up with maintenance. So it’s no surprise that when homes are abandoned, or homeowners are evicted as part of the foreclosure process, maintenance suffers. Roof leaks are left unattended, swimming pools turn brown, trash piles up, and the lawn continues to grow. In past years, foreclosures were relatively limited in most parts of the country, representing an isolated problem that wasn’t too difficult to contend with. However, with the recent recession and collapse of the U.S. housing market, foreclosures have skyrocketed. Nationwide, there were 803,489 foreclosures, default notices and repossessions reported in the first quarter of 2009.
That’s a lot of lawns. For those in the lawn maintenance business, foreclosures mean there are fewer homeowners to solicit business from. Some in the green industry have found that opportunities exist to serve the foreclosure market. In some cases, the per-cut rate can be extremely attractive. In other cases, the sheer volume of lawns available through a bank or real estate company can make up for a lower-than-normal fee. In all cases, though, those with experience with mowing lawns at foreclosed properties say it’s important to fully understand what you’re getting into.
“Here in southwest Florida, foreclosures have been around for at least three years. We’ve gone through spells of having a bunch of them, and then spells where we have none,” says Jason Cutright with Cutright Lawn and Landscape (http://cutrightlawnandlandscape.com) in the Ft. Myers, Fla., area.
Cutright says that most foreclosed homes his company takes on have gone without maintenance for quite some time and are very overgrown. “We try to cut it and edge and trim it out the best we can,” he explains. There’s usually so much grass— “it’s hay, really” says Cutright—that the debris needs to be raked and removed. “If it sits on top of the grass, the grass beneath it will end up dying.”
Some lawn care companies that handle foreclosures use a dedicated fleet of older equipment to avoid damaging newer mowers during the initial mows of overgrown grass, when bottles, rocks or other objects might be hidden in the grass. Cutright uses his regular mowers (Grasshopper 52-inch zero-turns), but avoids taking a full swipe of grass in order not to overtax the unit. “On the first mowing, we might mow the whole lawn two or three times, but only in half-size strips. That takes some pressure off the mower. And, we usually start by raising the deck all the way up to 5 inches. Then, we’ll come back and cut it at a normal height. The lawns usually don’t look too good after the first one or two times we service it, but, believe it or not, after we maintain it a few times, it starts to look good again.”
Depending on how detailed the customer wants to get, and how devastated the property is, Cutright also performs an initial analysis of any irrigation system that might be at the property and also sprays for weeds. “We’ll also redo mulch beds,” he explains. “We try to do the least expensive things we can to get the property looking good again. The banks that own them usually don’t want to spend any money on them, but they’ve come to the realization that they have to spend some, because they don’t want fines from the county. And, there are so many foreclosures on the market that they have to compete against now that it’s in their [best] interest to make their foreclosure look as good as they can.” For a small amount to make the lawn look good, a bank can really make their property stand out from the others in the area, often with exactly the same floor plan, lot size, etc.
Whatever work Cutright does at foreclosure accounts is carefully documented with digital photographs. “Banks don’t take your word for anything; we have to budget a little extra time on each job because we have to take ‘before’ pictures, ‘during’ pictures and ‘after’ pictures to show the work we’ve done,” he explains. “We take about 15 to 17 digital photos with the date on them at each stop, and they’re submitted with the bill.”
While banks sometimes oversee maintenance of the foreclosed properties, Cutright says the trend now is for them to hire a property maintenance company. That management firm, in turn, hires lawn care companies such as his to handle that aspect of upkeep. “One of my biggest customers is a service company that specializes in foreclosures,” he says.
That’s also the case for Chad Clark of Clark Unlimited Lawn Care (www.clarkunlimited.com) in Prairieville, La. He kept busy this past season with a steady stream of work from a property management company handling a large number of foreclosed homes. While there are many stories about late payments or nonpayment for work on foreclosed properties, working for a property management firm rather than a bank may explain why Clark found the experience successful. “It was a smooth process for me. I didn’t have to deal with any banks directly. The property management company would cut me the checks, and it worked fine,” he says.
Clark says that some foreclosure lawns he worked on were initially overgrown, “but for the most part, they weren’t in horrible shape. Considering the houses were abandoned, the lawns really weren’t too bad.”
The property management company didn’t require photos of each mowing job, as many banks and realtors do for foreclosed homes. “I even offered to take photos, but they didn’t need them. I think they drove around pretty regularly to check up on the houses in person,” he says. The agreement was that the foreclosed homes would be maintained on a two-week basis, unless there was a showing. “Sometimes they would ask if I could jump on those right away, and I would break my route and go to take care of it,” he says.
The foreclosed homes Clark maintained were beyond his normal service area. “But, because the property manager gave me so much work, wherever they wanted me to go, I went,” he says. Because of the travel involved, Clark didn’t actively try to retain the account of any of the foreclosed homes that were sold and had new homeowners move in. “Unless I could get four or five lawns in the same subdivision, it wasn’t really worth it,” he points out.
Dontaye Hamilton with Bull’s Eye Lawn Services (www.bullseyelawns.com), covering Palm Beach, Miami and Broward, Fla., says his company works for a number of realty companies and banks. “We’ll do anywhere from 65 to 200 foreclosure lawns a week,” he explains. He says he never actively tried to get into the foreclosure maintenance business. “For us, it was a lucky strike. We got one or two just from our regular advertising, and it just grew by referrals.”
Bull’s Eye takes a different approach with foreclosures than it does with its more traditional lawn care accounts. “On a regular property, we might spend 20 to 30 minutes. On a foreclosure or realtor property, we price them as a bulk package, so the rate for each lawn is lower. We try to get in and out in 15 to 20 minutes at the most,” says Hamilton. Of course, the first couple of visits to a particular site usually take a lot longer. “We’ve gotten onto some lawns that haven’t been mowed in five or six months,” says Hamilton. “We’ve found that heavy-duty Bunton mowers seem to work best in being able to get through all that grass. Someone in our company once had a lawn so overgrown that he had to get the fire department to come out to do a controlled burn before it could be maintained.”
To keep the overall cost down for the customer (bank or realty company), Bull’s Eye Lawn Services typically mows lawns at foreclosed homes about every three weeks. Hamilton says that codes in that area typically require grass to be maintained under 4 or 6 inches, so it’s important to walk a fine line between not over-mowing and costing the client extra money and waiting too long and risk a fine.
Many communities have instituted codes regarding mowing requirements specifically because of the number of overgrown lawns resulting from foreclosures. In some places, the cities themselves have actually taken over the scheduling of mowing. In Cape Coral, Fla., for example, the code enforcement department must mow lawns whenever the grass reaches 1 foot tall. This past year, that meant mowing more than 4,000 lawns at a cost to Cape Coral taxpayers of $250,000.
Hamilton says that while many foreclosure accounts have proven profitable, there are risks to working in this market segment. “We’ve lost thousands of dollars; it’s a rough market. Sometimes you’re waiting on checks and they never come. Sometimes a realty company just goes out of business,” he says. “We usually have better luck dealing with banks; they’ve been great to deal with.”
Some lawn care companies decide that risk isn’t worth the potential reward. Cutright points out there can be other dangers, as well. Some foreclosures are in out-of-the-way developments surrounded by empty lots. In many cases, the vacant homes have been vandalized. Cutright says he’s never felt unsafe working on these properties in broad daylight, “but I sure wouldn’t be comfortable having my wife go out to do an estimate at some of them at sundown,” he adds.
Still, Cutright says that the foreclosure market has worked well for him. He also points out that while the work may be fleeting, foreclosure accounts don’t have to be short-term propositions. He estimates that his company retains 9 to 12 percent of the foreclosed properties it maintains even after the home gets a new owner. “Foreclosures are now priced so low that the new homeowners aren’t having to make a $2,000 mortgage payment every month. They might have a $700 or $800 payment, so budgeting an extra $80 or $85 a month for lawn maintenance doesn’t hurt them as badly as it used to,” he says.
To help market his services, Cutright leaves a business card in the door after the last mowing service provided for the bank, or asks the bank to give it to the new homeowners at the closing. “We do foreclosures because we try not to turn any work away,” he says. “But, at the same time, we understand that this market could disappear at any time, so it’s just one part of what we do; we don’t center our business around it.”
Patrick White is a freelance writer and editor who has covered every aspect of the green industry in the past 13 years. He is based in Middlesex, Vt., and is always on the lookout for unusual stories.