Thinking about joining the biz... PLEASE HELP - REO Property Preservation Forum
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post #1 of 14 (permalink) Old 02-26-2014, 04:58 PM Thread Starter
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Thinking about joining the biz... PLEASE HELP

Hi my name is Nick!

I am completely new to this industry although I did work for a company called AMS back in PA, which would send work to PP companies all over the nation via HUD, Fannie Mae, etc. So I get the industry from that point of view, but here are my questions that I would greatly appreciate it, if someone could help me with answering them.

For your knowledge, I am currently located in Southern California (San Diego) and plan on starting my company here, and doing all work within a reasonable distance (hour or 2) of San Diego.

1. What is the average start-up cost of a company of this nature?
2. What do I absolutely need in order to start one? (LLC, General Liability, etc)
3. How do I know if there is an abundance of jobs in my area?
4. Can I only do initials and re-occurring as a PP company? Do I need a contractor's license to do other small bid work?
5. For a small business what would be an average income in this industry?

Thank you so much in advance... I'm feeling hopeful!
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post #2 of 14 (permalink) Old 02-26-2014, 05:26 PM
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Quote:
Originally Posted by ntrillo88 View Post
Hi my name is Nick!

I am completely new to this industry although I did work for a company called AMS back in PA, which would send work to PP companies all over the nation via HUD, Fannie Mae, etc. So I get the industry from that point of view, but here are my questions that I would greatly appreciate it, if someone could help me with answering them.

For your knowledge, I am currently located in Southern California (San Diego) and plan on starting my company here, and doing all work within a reasonable distance (hour or 2) of San Diego.

1. What is the average start-up cost of a company of this nature?
2. What do I absolutely need in order to start one? (LLC, General Liability, etc)
3. How do I know if there is an abundance of jobs in my area?
4. Can I only do initials and re-occurring as a PP company? Do I need a contractor's license to do other small bid work?
5. For a small business what would be an average income in this industry?

Thank you so much in advance... I'm feeling hopeful!
Welcome Nick,

The very first thing you must do is find a good accountant that you are in no way shape or form related to and have them help you set up your accounting procedures. This will save you when everything else fails. I have had the same accountant for 18 years now and he has saved me tens of thousands of dollars that I would have paid the IRS because there is no way I could possible hope to know all the tricks to filing my taxes correctly.

Start up depends on what you have vs what you need. At a minimum you will need a full set of commercial lawn equipment Ė a trailer, mower, string trimmer, edger and blower. You will also need tools for trimming hedges and trees. This can cost from a few thousand dollars for used equipment to over $10,000 for new equipment. One new commercial ride on ZTR mower will cost between $7,000 and $14,000. The stuff at Home Depot is NOT commercial equipment.

Then there is business licensing. I recommend a corporation for the protection it provides you. You will need general liability insurance and workerís compensation. You may also need errors and omissions insurance as well. Costs for this vary from state to state so you will want to check with you local insurance agent for that. I would speculate that you will need between $3,000 and $5,000 for down payments on this.

You will also need to have some sort of capital to live on for a couple months, at least, until you get your first check.

To do this right you need about $20,000. Or you can wing it like most of us did and scratch and claw for every penny you get just to survive until you learn enough from the school of hard knocks to start being more profitable.

There is really no way to know how many jobs are in your area at any given time. For example, I am negotiating a contract right now that will give me 20 more lawn cuts each week. However, during the peak lawn season I happen to know this guy needs someone to cut about 400 lawns per week. If I can prove myself with 20 lawns I will see if he will toss me another 100 to 150 when the season ramps up.

Diversify or die. In order to maintain a steady income stream I have several customers that are not P&P. Look for commercial and residential lawn accounts. My residential customers pay all of my overhead during the spring and summer.

The need for specialty licensing depends on your state and local municipalities. I have no clue as to what you need where you live.

There is no average income. During lawn season I tend to make 2 to 4 times what I make in the winter. So sock away some money to make sure you can pay your bills during the slow months.

Hope this helps.
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post #3 of 14 (permalink) Old 02-26-2014, 05:51 PM Thread Starter
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i think we'd be on a much smaller scale

Although this is very useful information... I think I am planning on a much smaller scale. Think like 10 grand max.

I have most of the equipment and tools necessary minus the trailer and mower. I am looking to start small and grow as I learn.

So as far as finding work and business opportunities... what would you suggest?

Thank you so much!
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post #4 of 14 (permalink) Old 02-27-2014, 08:03 AM
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Smile 5 answers, thanks nick for the ?s

Quote:
Originally Posted by ntrillo88 View Post
Hi my name is Nick!

I am completely new to this industry although I did work for a company called AMS back in PA, which would send work to PP companies all over the nation via HUD, Fannie Mae, etc. So I get the industry from that point of view, but here are my questions that I would greatly appreciate it, if someone could help me with answering them.

For your knowledge, I am currently located in Southern California (San Diego) and plan on starting my company here, and doing all work within a reasonable distance (hour or 2) of San Diego.

1. What is the average start-up cost of a company of this nature?
2. What do I absolutely need in order to start one? (LLC, General Liability, etc)
3. How do I know if there is an abundance of jobs in my area?
4. Can I only do initials and re-occurring as a PP company? Do I need a contractor's license to do other small bid work?
5. For a small business what would be an average income in this industry?

Thank you so much in advance... I'm feeling hopeful!
1: the average cost being around 10,000+ depending on equipment and areas being purchased at.
2: you'll need 2,000,000 general liability, 1,000,000 aggregate min, and must have the policy cover per errors and occurance.
3: for jobs you will need to know the preservation companies in your area and just give them a call and ask what type of work they have, like pmp, ppr, or reo. And how much reoccurring work and initials they have.
4: you should find out if you need a general contractors license, most of the time yes you will need one.
5: an average income of just a small area of preservation would be 1,200 a week. Now obviously this can be way different at different times and in different areas. Just know if there is a lot of work there can be a ton of money to be made!

Cherrys all cleaning services
Cherrys property management

Contact: [email protected]
Website: Cherryspreservation.com
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post #5 of 14 (permalink) Old 02-27-2014, 08:36 AM
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Quote:
Originally Posted by ntrillo88 View Post
Although this is very useful information... I think I am planning on a much smaller scale. Think like 10 grand max.

I have most of the equipment and tools necessary minus the trailer and mower. I am looking to start small and grow as I learn.

So as far as finding work and business opportunities... what would you suggest?

Thank you so much!
What I listed was for a one man operation with no equipment. The mower and trailer are two of the biggest expenses. If the rest of your lawn equipment is not commercial grade it will not last long, one season maybe. So you will need to plan to replace it as soon as possible.

When I started I searched for Property Preservation companies and checked them out. Check with local cities to see if they hire contractors for lawn abatement and property cleanup. I have found that being a member of the Chamber of Commerce has gotten me some work too.

The only way to find work is to look for it.
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post #6 of 14 (permalink) Old 03-02-2014, 11:24 AM Thread Starter
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Thank you guys for the help.. time to get started!
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post #7 of 14 (permalink) Old 05-07-2014, 09:51 PM
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i'll give you the best advice find a different field or you will regret it later
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post #8 of 14 (permalink) Old 05-08-2014, 01:00 AM
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i'll give you the best advice find a different field or you will regret it later

Their is a reason us old timers are bailing from this business left and right. I'm nearly out and couldn't be happier......
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post #9 of 14 (permalink) Old 05-08-2014, 12:57 PM
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Nick I'm already out and share the sentiment.

The P&P business model that you will be forced to work under does not allow you to control your own destiny!

Read that sentence again and let it sink in. Now spend a LOT of time reading what is already posted on this forum.
It should take you a couple days to read and digest. What is posted here is not doom and gloom or sour apples. This stuff actually happens.

Then spend some more time thinking long and hard about your future and if you wish to hitch the future of your business onto companies that operate like Buczek, SG,
Berghorst and the list goes on and on and on and on and on and on.
If you don't know who those companies are and what they've done............ you have not yet completed the home work assignment I outlined above.


IF you still choose to hitch your wagon to the P&P business model and have completely disregarded every thing else up to this point please for the love of God,
yourself and your family DO NOT have P&P as your only source of income!

If you can't comprehend what I just wrote..... there is no hope. By all means jump into P&P with both feet and become another very sad statistic in the P&P wall of sad stories.

Professionals are people who can do their job when they don't feel like it.
Amateurs are people that can't do their job even when they do feel like it.

Last edited by BPWY; 05-08-2014 at 12:59 PM.
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post #10 of 14 (permalink) Old 05-09-2014, 01:28 PM
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Hello everyone,
Sorry to budge in on this post. Not exactly sure on how to post/ask qs/ and get answers or to even answer on this website yet, so please forgive me. My name is Zack, Ive been working in this business since I was 16 on and off with a family company here in Fl. Now 24, Me and my fiance have decided to pursue this as our career. For the first 1.5 years we worked together it was rough, not because we couldnt get along, but because of the financial strain that my family put on us. We asked what counties needed to be covered, we had moved to that county to be closer for work. Get this after we moved the work was not here but in another county WTF!? We had to purchase a truck, equipment, trailers, etc etc. So we were in the hole by about 15k grand while barely keeping our bills paid. The work we do is everything, grass, p&p, reo, tashouts, evictions, boardings, maid, everthing! and i could give a list to what they pay us on a private message, and some of you would probably want to sue them or call them out your self!( 20 bucks for recut up to 1 acre, and under 12 in, and intial cuts is 30 up to 1 acre under 24in) And i dont even wanna talk about the money they owe us! sorry for venting guys but back to why im here. Im trying to know the ins and outs of this industry so my family and business can prosper. Im not looking to get rich, or to take over a state. Just to be paid fairly or close to fairly as possible. I have talked to one broker who might be interested but thats about it. Trying to start a business and work for one is difficult, especially when your being paid crap. If you guys could help my family out it would be greatly appreciated with any information on this. and also how to work my way around this website! Thank you everyone!
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