Foreclosure Cleanout Break-Even: About $38K Monthly Revenue

Fixed costs $25.6K/mo Monthly base cost

Contribution margin 71% After variable costs

Break-even revenue $36.1K/mo Revenue to cover

Break-even timing Month 22 Model break-even point

Break-even calculator

Test how monthly revenue, variable cleanup costs, and fixed overhead stack up against break-even for a foreclosure cleanout business.

Lean Base Full

Monthly revenue Revenue pays the variable work and leaves cash for fixed overhead. $ Slow month Busy month Variable expenses Use direct costs that rise with each cleanout and contract. $ Light cost Heavy cost

Money available to cover fixed costs $28,400 $40,000 revenue - $11,600 variable expenses

Margin ratio

71%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly overhead the business has to cover. $ Lean overhead Loaded overhead

Break-even chart Revenue Total costs

Which foreclosure cleanout expenses are fixed, and which move with job volume?

Cost classification

Break-even works only if job-linked costs stay variable and monthly overhead stays fixed. In the first operating year, disposal at 8%, crew labor at 12%, fuel at 5%, and commissions at 4% of revenue should not be buried in overhead.

Expense	Cost	Break-Even Treatment	Common Mistake
Disposal and Recycling Fees	Variable	Use 8% of first-year revenue.	Don’t bury landfill and recycling charges in overhead.
Direct Labor Costs (Crews)	Variable	Use 12% of first-year revenue.	Don’t treat crews like fixed admin payroll.
Vehicle Fuel & Maintenance	Variable	Use 5% of revenue.	Route density changes margin, so don’t flatten it.
Sales Commissions	Variable	Use 4% of revenue.	Separate commissions from base sales wages.
Office/Warehouse Rent	Fixed	Include $3,500 per month.	Include it even in slow months.
General Liability Insurance	Fixed	Include $300 per month.	Don’t wait for steady volume to model coverage.
Owner, Sales, Admin, and Supervisor Wages	Fixed	Include $17,500 per month in the first year.	Don’t mix recurring management payroll into crew labor.
Marketing Budget	Semi-fixed	Use $15,000 per year, or $1,250 per month.	Don’t let monthly lead spend vanish from break-even.

How does break-even shift across lean, base, and full foreclosure cleanout scenarios?

Scenario table

Break-even stays tight because variable costs run at about 29% of revenue in each case. That leaves the base case almost flat, while the lean case still misses fixed overhead and the full case starts to build a cushion.

Planning assumptions only; actual jobs, disposal loads, and crew time can move results above or below these figures.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean cleanout case	$27,440	$7,958	$26,850	71.0%	-$7,368	Still below break-even; fixed overhead is not covered.
Base cleanout case	$37,730	$10,942	$26,850	71.0%	-$62	Almost at break-even, so small swings can flip profit.
Full cleanout case	$51,450	$14,921	$26,850	71.0%	$9,680	Creates a cushion before taxes, financing, and one-time capex.

What breaks the break-even plan for a foreclosure cleanout business?

Stress test

At the base plan, break-even sits at $37,817 a month, with 29% variable expenses, a 71% contribution margin, and $26,850 of fixed overhead. A 10% revenue miss, a 10% overhead bump, or 5 points of extra dump-fee and labor pressure all push it back toward loss.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; 29% variable expenses and $26,850 fixed overhead stay flat.	$37,817	$0 gap	No cushion, so a small miss turns negative fast.
Revenue shortfall	Revenue falls 10% to about $34,035.	$37,817	$2,685 gap	That month is still underwater.
Fixed-cost pressure	Fixed overhead rises 10% to $29,535.	$41,599	$3,782 gap	More rent, admin, or vehicle cost pushes the target up.
Margin pressure	Variable expenses rise 5 points to 34%.	$40,682	$2,865 gap	Higher dump fees or labor hours shrink contribution fast.
Combined pressure	Revenue falls 10%, variable expenses rise to 34%, and fixed overhead rises 10%.	$44,750	$7,072 gap	That mix puts the month about $7,072 underwater.

Before you sign the lease, buy trucks, and raise spend, can this cleanout business clear break-even?

Founder checklist

Only commit once booked work can clear the modeled $37.8K monthly break-even and keep cash above the $443K trough through Month 26. If that proof is weak, delay the extra truck, new hires, and higher marketing spend.

1Break-Even Load$37.8K/mo

Verify the booked revenue can stay above the modeled break-even level before you add fixed overhead or another truck.

2Access FlowPre-dispatch

Confirm property access, disposal and recycling accounts, and insurance before dispatch, because idle crews and failed drop-offs burn margin fast.

3Job Pricing4.0 hrs @ $75

Price standard cleanouts from the modeled 4.0 billable hours at $75 an hour, and keep surcharge items separate from the base invoice.

4Crew CoverageMonth 13

Line up crew labor and route plans before you book more volume, because the model adds an operations manager in Month 13 and fuel plus dead time sit inside the 5.0% vehicle cost.

5Cash Cushion$443K

Keep cash above the modeled $443K minimum through Month 26, since payback stretches to Month 46 and Year 1 EBITDA is still negative.

6Referral Engine$15K / $150 CAC

Use the Year 1 $15K marketing budget to build referrals from property managers, lenders, brokers, and preservation contacts, and do not push spend higher until CAC is near $150 and bookings are steady.