Newbie looking for some basic business numbers - REO Property Preservation Forum
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post #1 of 57 (permalink) Old 09-23-2015, 05:56 PM Thread Starter
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Smile Newbie looking for some basic business numbers

Hello there,

I'm considering getting into the preservation/maintenance business and was hoping someone could help me with a few business numbers.

I know, I know, best advice "get out before you get in."

I've read the posts on this forum that point out the downsides and doomsday forecasts for the industry. I'd like to do a little financial analysis of my own and so I'd like to hear from those who work in the PRESERVATION AND MAINTENANCE BUSINESS ONLY, and can offer some reasonably accurate numbers, regardless of their position on the financial viability of the industry.

In particular, I'm looking for general expense numbers:

Cost of Materials as a percentage of Gross Revenues
Cost of Insurance as a percentage of Gross Revenues
Cost of Fuel as a percentage of Gross Revenues
Taxes as a percentage of Gross Revenues

Unless I'm missing something, these seem like the major expense categories associated with this business. If anyone wants to share their sterilized (personal info and details blacked out) tax returns with me that would really be helpful.

I'm just trying to get a general sense for what the profit margins look like for this type of work. Can I make a decent hourly wage or am I going to work for peanuts?

Any response or info would be greatly appreciated.

Feel free to contact privately if you prefer.

Thank you in advance
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post #2 of 57 (permalink) Old 09-23-2015, 08:40 PM
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I think it is a little difficult to answer that question as some jobs are more profitable than others. It's also hard to say on a yearly basis as sometimes you need more tools than others. I'm not speaking of large tools, but disposable stuff. Also it can greatly vary from year to year depending on what type of orders you receive. You also spoke about fuel costs, I believe this can vary greatly depending on the type of vehicle you are driving and the type of equipment you are using.
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post #3 of 57 (permalink) Old 09-23-2015, 09:17 PM
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I actually just started like 2 months ago, I'm not getting rich I can tell you that but I like it, work my own hours ext. the one company I am thru I get a good bit of follow ups over little things I miss witch makes me utterly loose after gas expenses but all and all I like it
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post #4 of 57 (permalink) Old 09-23-2015, 09:30 PM
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Originally Posted by Prez567 View Post
I actually just started like 2 months ago, I'm not getting rich I can tell you that but I like it, work my own hours ext. the one company I am thru I get a good bit of follow ups over little things I miss witch makes me utterly loose after gas expenses but all and all I like it


best advice I can give you is take the work from the local guy or the regional, get some experience and then you can go the national and get better prices and a larger territory
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post #5 of 57 (permalink) Old 09-23-2015, 09:42 PM
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Yeah I go thru a company in NJ and another one also, so far no issues with the second company *knock on wood* I try n stay local in PA just doing my surrounding county's once in a while I get thrown pretty far out there witch I don't mind as long as I have a route but they like to throw some follow ups at me haha, I ain't looking to get huge just put a few extr bucks in my pocket,
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post #6 of 57 (permalink) Old 09-24-2015, 01:17 PM Thread Starter
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Quick follow up

Madxtrem01 - Thanks for taking the time to respond. Curious about a few things.

1) Do you do preservation/maintenance work full time or do you do other types of vendor/contract work also (ie., construction, remodeling, etc.)?

2) Based on your experience with only the preservation/maintenance work, would you recommend getting into the business to a friend of yours?

3) You mentioned disposable tools. What are the typical disposable tools that you are referring to?

Again, I'm just trying to get a sense for what to expect from the financial side of things. I have no issues with hard work, as long as the net pay (after taxes and expenses) is sufficient to justify the time and effort.

Thanks again!
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post #7 of 57 (permalink) Old 09-24-2015, 03:13 PM
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Quote:
Originally Posted by PreServe2015 View Post

1) Do you do preservation/maintenance work full time or do you do other types of vendor/contract work also (ie., construction, remodeling, etc.)?
I do anything that creates a profit. Preservation work when contracted thru third party companies almost always means less money and less control over your business. Don't limit yourself.

2) Based on your experience with only the preservation/maintenance work, would you recommend getting into the business to a friend of yours?
Not with nationals. Absolutely not. I have had family from Florida to Minnesota discuss signing on with nationals. No. Family reunions would turn into a lynch mob.

3) You mentioned disposable tools. What are the typical disposable tools that you are referring to?
I can't speak for others, but landscaping equipment tends to take a horrible beating at foreclosed property. For the cheap grass cuts, a $1000 rider that only lasts a summer should pay for itself and with little grief when it blows up.

Again, I'm just trying to get a sense for what to expect from the financial side of things. I have no issues with hard work, as long as the net pay (after taxes and expenses) is sufficient to justify the time and effort.

Thanks again!
Most of us can work hard but not everyone can work smart. Third party management companies make their profits off the former.
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post #8 of 57 (permalink) Old 09-24-2015, 06:01 PM
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So you don't want my advice saying not to get into the business but you are going to listen when I tell you how to lose money?

It seems that some believe they can succeed where others fail because they are willing to work harder or they have more business sense. They see low start up costs and an abundance of work and think these guys are all a bunch of idiots if they can't make money.

If you won't listen to my advice to skip this industry altogether, I'm not going to waste my time explaining to you the best way to minimize your losses.
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post #9 of 57 (permalink) Old 09-24-2015, 06:39 PM
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I only do preservation and I have so far only worked for the nationals. I have been in business since 2010 and have always been profitable. I have learned to not fight over the stupid zero pay orders and realize that a long term relationship with a good company is the most important thing. This industry is hard, they expect us to have all tools to do every job and always have these tools with us. It's not realistic and neither is the timeframes they expect us to complete the work in, but I've learned a few things over the years. Before we start working for a new company I tell them right away that we do not work weekends unless an emergency arises. We all have families and deserve time off even if it means sitting on the couch and doing nothing. As far as tools are concerned, don't go crazy, buy what you need as you need it, this industry for the most part isn't as glamorous and people think. We don't fix these houses to make them pretty to get ready to be sold, for the most part we protect the asset from deteriorating and from a town violation. In the summer we are landscapers, and in the winter we winterize, mold remdiate and pump basements. There are other types of orders as well, but the most important thing is the pictures. They tell the story of the work that we do, and also provide proof of issues that need to be addressed with bids. There is a ton of money to be made, but don't think you are going to make as much as a professional in the same field as the work order instructions. It's best to buy the right equipment the first time instead of trying to take the cheaper way out. Get the job done in the most efficient way possible to maximize profits by spending less time at a job and spending less in labor
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post #10 of 57 (permalink) Old 09-24-2015, 07:41 PM
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I've been at it for 4 months now. Started with $400 and now I have a better truck, 7x12 trailer, new tractor, new lawn mower, new hedge trimmer, weed whacker, blower, new generator, $4K engagement ring on fiance's finger all while she is taking 1/2 my pay each week.

so, no, there is no money to be made here.
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