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sgl41377
10-04-2004, 11:07 PM
I am have been in business for 6 months and have license and insurance. I have been starting out slow. I am working by myself with two Snapper Lawnmowers, Echo Trimmer, Echo Edger, and Backpack Blower. I just recieved a call from someone who has a business cleaning up houses that are foreclosures. She wanted me to clean up a 1/3 acre lot that has been a little overgrown in the backyard and needs mowing around the front and sides of the house. I am not familiar with how to charge for a job like this. I knew exactly where the property was and actually lived next door to the house for 2 years. I sold the house because the property values were not doing anything. I had to make a decision on price fast because she needed the work done as soon as possible, like tomorrow. So, I spoke to someone I work with who has been doing yards for about a year. He said charge $150. I called her and took the job at $150. Did I make the right decision?

Precision
10-05-2004, 07:47 AM
not enough info. For overgrown properties the benchmark is what code enforcement charges. If they charge $250 for 1/3 acre then you got ripped. Remember 1 hour on your mower cutting down 3 ft grass is like 4 hours on maintained grass as far as mower life is concerned.

The realestate person knows exactly what it costs to have the county do it. YOu should learn too.

steve122
10-05-2004, 08:06 AM
Accoring to HUD's officail price list, an initial visit lawn cut on a lot 10,000 to 15,000 sq ft is $85. subsequent visit $50. The sub-contractor who contacted you probably won't even be re-imbursed that full amount, but is obligated to cut the grass as part of the intial services. So, they will pay whatever they feel is a fair price to avoid doing it themselves. Depends on how tall the grass and what equipment you have if you made right decision. Height of grass doesn't matter at all. Time spent on the job vs amount bid will decide if you made right choice.

SellPoint
10-05-2004, 03:35 PM
You bid about right. Hud specs are damn cheap and not many people can live off of what they pay. If you bid what the city would charge there would be nine other property preservation companies that will do it for considerably less. Repo stuff is a delicate balance between getting a decent rate and fighting off the scrubs. I've seen guys clean out a house for $200 bucks that would have taken me and another guy two days and a $350 40yd dumpster rental. I can only guess they had a spot in the woods to dump stuff. Initial mows for really tall grass I would charge 2 or 3 times a regular mow charge.

dkeisala
10-05-2004, 03:45 PM
I've never dealt with HUD but just recently mowed a few properties for a realtor that deals with VA foreclosures. Ocwen mortgage company has the contract with the VA to manage these properties. Maintained them from April through August of this year. Realtor owed me over $800 and just FINALLY got paid last week. It was a nightmare for both me and the realtor in getting the money from Ocwen.

It was never a question of getting the money but when. Of course, I don't know if HUD is the same but anytime you are dealing with a government entity, often times they pay you when they feel like it.

sgl41377
10-05-2004, 04:16 PM
Thank you all for your input. I finished the job in 4 hours and fell the price was right. The front and side yards were not overgrown with grass. The grass had been cut about 2-3 weeks ago. The backyard was a mess. Overgrown, I had to cut my way into it. The woman who hired me owns her own company. She was hired by HUD to get the property ready for auction. She told me that she gets paid a specific amount for each service. Cleaning the interior of the house, getting the exterior ready, pressure washing, etc. Depending on what the property needs. I am sure she was paid more than $150 for the job I did. But, she was very happy with the results and I will probably get more work from her.

steve122
10-05-2004, 05:49 PM
I've never dealt with HUD but just recently mowed a few properties for a realtor that deals with VA foreclosures. Ocwen mortgage company has the contract with the VA to manage these properties. Maintained them from April through August of this year. Realtor owed me over $800 and just FINALLY got paid last week. It was a nightmare for both me and the realtor in getting the money from Ocwen.

It was never a question of getting the money but when. Of course, I don't know if HUD is the same but anytime you are dealing with a government entity, often times they pay you when they feel like it.
HUD does not deal with individuals. They put up large areas of a state, or an entire state up for bid for what is called M&M (maintenance and marketing) and companies bid for this contract. I don't know the particulars of the bid, but recently the M&M contractor that I've worked for for the last 2 years as a subcontractor lost all five states that they had. The new company was awarded a contract worth over $100,000,000.00 for 2 years. Yes one hundred million. That is to take a house into its inventory, clean it out and maintain it until it is sold. The M&M contractor is responsible for the closing process also. I don't know how HUD pays them, but I invoice at the end of the month and have 2 options, quick pay in 10 days for a 2% reduction or net 30 days. Always on time, hope to get on with new contractor as a sub and that the newbies pay as quickly. And 99% of services are on a set fee that the M&M contractor sends out. HUD has one price, the M&M has another and makes a profit on the spread, along with whatever fees HUD pays. The winning bidder in this case was supposed to have their contract awarded on October 1, has not yet happened. They won on the basis of being a small business last year (under $500,000 income) and that is being challenged. Imagine from $500,000 to $5,000,000 per year overnight and have to set up offices in 5 states.

sgl41377
10-05-2004, 09:31 PM
Does anyone have any suggestions for pricing these properties? If I get a call back from the woman that hired me to do this first yard, should I give her a good price that is reasonable again, or try to get more? I dont know what she was paid to do the house, but I do not want her to take advantage of me. If she is getting paid $500 to do the outside work, should I get half, a third, etc? I feel like the 4 hours I worked today was well worth the $37.50 I got paid. She said that she owns a company and works on foreclosed properties. I dont know exactly how many she does per month, but I would like to get the majority of the work she needs to have done. Let me know your thoughts.

Precision
10-06-2004, 07:38 AM
Despite getting bad reputation points on this thread already, are you nuts.

you got paid $37.50 for 4 hours work. Might as well do it for free at that point.

That is like tipping $2 on a $100 dollar tab at your favorite restaurant.

$2 for gas to mow it. $2 for gas to get there. $3 for GL insurance $2 for comm car insurance, $.50 Advertising, $2 phone, $1 maintenance and repair of equipment and those are just some basic daily costs I can think of.

$37.50 less $12.50 in costs equals $25 divided by 4 hours $6.25 per hour to you and that is without depreciation, and expendables like blades, Weedeater string.

My thought is run while you still have gas money.

Mikes Lawn Landscape
10-06-2004, 08:31 AM
Despite getting bad reputation points on this thread already, are you nuts.

you got paid $37.50 for 4 hours work. Might as well do it for free at that point.

$37.50 less $12.50 in costs equals $25 divided by 4 hours $6.25 per hour to you and that is without depreciation, and expendables like blades, Weedeater string.
My thought is run while you still have gas money.

That there is some FUZZY MATH

tx_angler
10-06-2004, 08:52 AM
Does anyone have any suggestions for pricing these properties? If I get a call back from the woman that hired me to do this first yard, should I give her a good price that is reasonable again, or try to get more? I dont know what she was paid to do the house, but I do not want her to take advantage of me. If she is getting paid $500 to do the outside work, should I get half, a third, etc? I feel like the 4 hours I worked today was well worth the $37.50 I got paid. She said that she owns a company and works on foreclosed properties. I dont know exactly how many she does per month, but I would like to get the majority of the work she needs to have done. Let me know your thoughts.

Here's a link to the HUD P&P fees they pay http://www.hud.gov/offices/hsg/sfh/reo/pandpsched/index.cfm There is also a link on the state page to ask HUD a question.

We looked into P&P last winter and found it is very competitive here in Dallas and a lot of the properties were located in "crack central". It would take three folks to do a two man job cause someone would have to guard the equipment.

SellPoint
10-06-2004, 11:56 PM
[QUOTE=tx_angler]Here's a link to the HUD P&P fees they pay http://www.hud.gov/offices/hsg/sfh/reo/pandpsched/index.cfm There is also a link on the state page to ask HUD a question.

HUD has guidelines for what they are willing to pay without the realtor getting more than one bid.

Take for example a job I was sent to bid 2 weeks ago: Three picture windows needed boarding up, each of which would have taken a full sheet of plywood. Now, according to HUD/FHA guidelines you have to remove all remaining glass, put up the plywood, and secure it by putting at least 2 sets of carriage bolts going through the plywood into a 2x4 inside. Each window would have taken (1) 4X8 plywood (1) 8' 2X4 & (2) 10" carriage bolts with nuts and washers. By HUD guidelines, they will pay .50 per united inch in my state. That means length plus width in inches or 48 + 72 * $0.50 = 60 bucks per window and materials costs are my own.

Lesson being don't do these jobs for bare minimum.

Realtors are not supposed to make a premium on these services, they get paid by their commission when the property sells. There are middleman companies that do get paid in this way but they do it by taking a 10% - 20% discount on your bid.
If you bid $1,000 they take $100 - $200 and give you the rest.
These are companies such as, Five Brothers, Field Asset Services, Denali Ventures etc...

It can be good work depending on your market but usually you don't get much of it unless you dedicate your business to this alone or have a crew you can turn into a property preservation department.

This is mainly what I do so if you want some more insight PM or e-mail me.

beransfixitinc
10-07-2004, 12:12 AM
Despite getting bad reputation points on this thread already, are you nuts.

you got paid $37.50 for 4 hours work. Might as well do it for free at that point.

That is like tipping $2 on a $100 dollar tab at your favorite restaurant.

$2 for gas to mow it. $2 for gas to get there. $3 for GL insurance $2 for comm car insurance, $.50 Advertising, $2 phone, $1 maintenance and repair of equipment and those are just some basic daily costs I can think of.

$37.50 less $12.50 in costs equals $25 divided by 4 hours $6.25 per hour to you and that is without depreciation, and expendables like blades, Weedeater string.

My thought is run while you still have gas money.

He got paid $37.50/hr for 4 hours work, hence, where he states $150 somewhere in his thread. Not to get flamed, or tick anybody off, but do people even read a post slowly enough to pick up the facts anymore?

sgl41377
10-07-2004, 08:54 AM
On the HUD website, it gives prices according to the units. What exactly is a unit? 1 house? From the circumstances that I was a part of, this is what I found out. The woman who hired me is hired by HUD. She called me to do the exterior while her company team did the interior clean-up. I want to find out from the information on HUD.gov how much she was paid to do the work. I want to get more work from her and want to make sure I give her a good price depending on what she is getting paid. Each property is different, but I dont think HUD prices like that. Thank you for your help.

SellPoint
10-07-2004, 05:13 PM
A unit could easily described as each individual dwelling.

1 House= 1 Unit
1 Duplex= each side of the duplex or 2 Units
1 Apartment complex= however many apartments there are as in a "20 Unit" apartment complex

Generally it is interior work such as debris removal, board ups, winterizations etc.
that are bid by unit. For lawn maintenance, you calculate by the property as each property will only have one "yard". I hope that makes sense.

HUD work is relegated to the Broker to whom the HUD contract was given so it sounds like you were either contracted by them or this women was contracted by the listing firm and then your were subbed by this agent. Either way, you have to go through the HUD assigned listing firm to get the work. I say all this
because it's sounding like you are two or three rungs down the pole on this work. I'm not saying you shouldn't't work for this woman or anything but, if you
want to expand into this field you may want to start contacting the asset management or property preservation companies directly to try to cut out some middle men. With HUD/VA properties this is not possible because of the listing structure but there are lots of REO's (Real Estate Owned's) not owned by the government.

As for finding out what this agent is getting paid....not very likely. She could be doing the work for spec price or it could be a bid job it's hard to tell. I have a friend locally that recently bought a property service company from a gentleman that has been doing this for over a decade. He and I contract to some of the same companies and yet on a lot of his jobs he gets much more than I do even though these same companies have set pricing guidelines. Such is life.

I'm trying to give you what info I can without getting too long winded. If you want to pursue this line of work more exclusively then I can probably give you more info over the phone as I can speak muuuuuch faster than I can type. Or if you only have a few questions here and there I will try to answer them here as best I can.

If we all try to lift each other up eventually we'll all get to the top.
:cool2:

steve122
10-07-2004, 06:50 PM
Does anyone have any suggestions for pricing these properties? If I get a call back from the woman that hired me to do this first yard, should I give her a good price that is reasonable again, or try to get more? I dont know what she was paid to do the house, but I do not want her to take advantage of me. If she is getting paid $500 to do the outside work, should I get half, a third, etc? I feel like the 4 hours I worked today was well worth the $37.50 I got paid. She said that she owns a company and works on foreclosed properties. I dont know exactly how many she does per month, but I would like to get the majority of the work she needs to have done. Let me know your thoughts.
I think your mistake is worrying about what she is getting paid or if she is making money on you. What do you care what she makes or loses as long as you get a price that you think is fair? If she is going to lose money on a yard because of what you want, but is willing to pay it so she doesn't ahve to do it, are you going to worry about that? Probably not! Worry about your cost and profit and don't ruin your day worrying about what she/they did or didn't do. Good way to drive yourself nuts.

Precision
10-07-2004, 09:15 PM
I am sure she was paid more than $150 for the job I did. But, she was very happy with the results and I will probably get more work from her.

Are you saying that this means he got paid $150 for the job. I read this as him thinking she got paid $150 for his work. Perhaps I am wrong.

Precision
10-07-2004, 09:18 PM
[QUOTE=sgl41377] I feel like the 4 hours I worked today was well worth the $37.50 I got paid. QUOTE]


Now this flatly states that he recieved $37.50 in compensation.

If that was meant to be per hour. Obviously much better, but IMO still too low especially for that kind of work.

If I misread, I apologize.

sgl41377
10-07-2004, 10:55 PM
Yes, I agree I should just worry about what I am getting paid and not worry so much about how much the woman that hired me is getting paid. I do feel like I did a good job and the $37.50 per hour was well worth it. I do not think I am ready to advance into doing a large amount of these, as I am a small business working by myself as I grow. So, I thank all of you for your input. I hope the woman hires me again, so I will give her a good/fair price again if she calls. Sellpoint: Thank you for the great information, you are truly an asset to this site and the people you inform with your knowledge. I look forward to reading your responses in the future.