Considering a start up in Akron,OH - REO Property Preservation Forum
 
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post #1 of 7 (permalink) Old 07-18-2015, 02:28 PM Thread Starter
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Considering a start up in Akron,OH

Hello everyone me and a friend of mine are thinking of starting just a trashout buisness and working our way up to property preservation. Currently I am a CNC Machinist and my buddy is a installer for AT&T. We are completely new to this industry and have a couple questions that I would greatly appreciate it, if someone could help me with answering them.

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

1. What is the average start-up cost of a company of this nature? and is it possible to just be a trashout company or will we need to do lawn care, winterization ect.?
2. What do I absolutely need in order to start one? (LLC, General Liability, etc)
3. Who should we talk to when starting out. Was just gonna find some realtors who do business in foreclosure? What are these nationals I see everyone talking about?
4. Do I need a contractor's license to do other small bid work?
5. Would anyone like to mentor us during start up?

Thank you so much in advance...
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post #2 of 7 (permalink) Old 07-18-2015, 07:06 PM
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Brother. I hate to tell you this but you came to the wrong place. Lol. All your gonna get here is the old, you can't do it run away fast speech. That being said I'll try to answer some of your questions.

1. start up costs vary greatly. Who's doing the work? Who's work are you doing? If you just wanna start on trash outs your gonna have to work for either realtors that only need a rough job or other contractors in the area looking to off load some hard labor jobs. In this regard you'll need a very efficient system in order to make money. It can be done though.

2. You should have some type of limited liability structure just as a form of protection however it is not necessary. Insurance is a must. General liability and possibly errors and omissions depending on how far you take it.

3. Realtor are a best bet but it's harder than it sounds to find them. Again. It is possible.

4. Don't know the rules for licensing in Ohio. You'll have to look that up.

5. I couldn't commit to a mentor ship but I could certainly answer when I can any questions you have.
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post #3 of 7 (permalink) Old 07-18-2015, 09:03 PM Thread Starter
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Originally Posted by oteroproperties View Post
Brother. I hate to tell you this but you came to the wrong place. Lol. All your gonna get here is the old, you can't do it run away fast speech. That being said I'll try to answer some of your questions.

1. start up costs vary greatly. Who's doing the work? Who's work are you doing? If you just wanna start on trash outs your gonna have to work for either realtors that only need a rough job or other contractors in the area looking to off load some hard labor jobs. In this regard you'll need a very efficient system in order to make money. It can be done though.

2. You should have some type of limited liability structure just as a form of protection however it is not necessary. Insurance is a must. General liability and possibly errors and omissions depending on how far you take it.

3. Realtor are a best bet but it's harder than it sounds to find them. Again. It is possible.

4. Don't know the rules for licensing in Ohio. You'll have to look that up.

5. I couldn't commit to a mentor ship but I could certainly answer when I can any questions you have.

Well thanks for not being one of those guys. The work would be done by me and my friend. We have another buddy if needed for a larger job. I have a landscaping size dump truck& trailer. As of right now we don't have any work. This is pretty much in the concept stage and lots of research! I was actually happy I found a forum with people with this experience.

From the research I have done I seen that you should try to work with realtors in this specialty area like you said. But where would I find these contractors who need to unload some of as you say hard labor jobs? We aren't afraid of some hard work! Living in Akron I have been over people's houses that I imagine your speaking of haha. I figure more trash more cash right? When you say efficient system what do you mean?

My partner in this works for AT&T and was gonna be a sub contractor for Time Warner said we could get a 1,000,000 liability policy for around $25 a month does this sound right for this line of work?

What would you do pricing for the trash taken out to be competitive?
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post #4 of 7 (permalink) Old 07-19-2015, 08:50 PM
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You could call some of the nationals like Safeguard (in your back yard) or the supply companies specific to our industry, Bargin Locks and MFS and see if they will give you info on contractors covering your area. You might find it difficult to get them to give you contact info but its worth a shot. It worked for me once.

the truck and trailer will certainly come in handy for trash-outs so that's good. I say you'll need an efficient system because if you work for regional service providers or contractors looking to have the trash-outs out sourced there's little profit left in the job. Efficiency will lower your costs in general though no matter where you get your work.

as for the insurance, you need at least 1,000,000 in gen liab, but you might depending on where your work comes from need additional coverages which can range in price a lot. I think i remember paying about $45 a month for gen liab only policy from a local agent some years back. the gen liab and e&o combo policies are typically tied to income with a minimum premium of about 2500. I once paid 2500 per year for that policy, then was sued and the premium increased to 9800.

Pricing is completely relative to your costs. It would be very hard for me or anyone to tell you how to charge. I can say that most of the industry has standard pricing which you can find on some website like cubicyard.us and google searches for Fannie Mae, Freddie Mac, VA, FHA pricing matrix. At the very least you need to be able to cover your insurance, labor (including you), fuel, dumping and administrative costs. These costs will change over time and a lot of things could be added to that list.

a little more on efficiency;
efficiency is way too often overlooked in our business but it can quite literally mean the difference between profit and bankruptcy. I use to use box trucks with dove tails. This seems to still be the most common (at least in my neck of the woods) vehicle of choice for reo/preservation. However they are more expensive to insure and repair, more difficult to load and unload and harder to garage (unless you live in a place where parking is not an issue, i'm in a deed restricted community) than trailers. However even though a trailer is cheaper to operate in general, a traditional landscape trailer is limited in its capabilities as well. For me, I have designed and built a trailer that allows me to do any and all jobs that i've decided to add to my personal scope of work, without ever needing to bury my mower with debris, remember to grab the pool pump, or load the bed of my truck with random materials and tools. There was a time where I needed to do jobs in a specific order due to the limitations of a standard box truck or landscape trailer. If i had to, say, board a pool at one house, perform an initial grass cut at another, and remove 8 yrds of debris at yet another all in an area 90 miles from my office, it would be difficult to complete all in one outing. Now i can do all of those jobs and more in whatever order makes sense because my mower can be loaded and unloaded while the trailer has debris in it, and debris can be loaded and dumped while the pool boarding materials are on board. I can't tell you how many contractors ask me about my trailer. For me efficiency is why i'm still able to do this work. Its getting harder, but i always find ways to reduce costs and increase productivity. When i can't stay ahead of that curve anymore i'll probably have to get out.
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post #5 of 7 (permalink) Old 07-23-2015, 09:30 AM
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Pics of the trailer?????



I can tell you it could be tough to build a legit bidness because of all the hacks.
Guys that have no insurance, in it for beer money, and willing to work for $10 a cube because some office monkey told them they can do 2 cubes an hr and "make" $20 an hr.
What about dump fees????????
I know of a landfill I've used that the rate for debris is well north of $100 a ton.
There is no way to recover costs at $10 or even $20 a cube.

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.
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post #6 of 7 (permalink) Old 07-24-2015, 05:45 PM
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Pics of the trailer?????



I can tell you it could be tough to build a legit bidness because of all the hacks.
Guys that have no insurance, in it for beer money, and willing to work for $10 a cube because some office monkey told them they can do 2 cubes an hr and "make" $20 an hr.
What about dump fees????????
I know of a landfill I've used that the rate for debris is well north of $100 a ton.
There is no way to recover costs at $10 or even $20 a cube.
Pics were posted under the equipment sections a while back. The post was called "primary preservation trailer" but I'll repost some. I did some recent add ons anyway.
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post #7 of 7 (permalink) Old 07-24-2015, 07:15 PM
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Its hard to just do debris removal, most want you to be all around. I will not speak of the negatives unless you want to know. Nobody believes it anyway. lol
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