Do commercial properties see their landscape bill...

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Jan 17, 2006.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    go down every year?

    My best friend just left his law firm to be the head attorney for a small real estate company. This real estate company buys retail shopping centers, runs them for a few years and then sells them. They own 20+ shopping centers in the DFW metroplex.

    He just got hired and it's taken him a while to dig up the landscape maintenance bills. I am going to look at two of these properties today that are close to my house. The landscape maintenance bill for one of them is $67K per year and for the other one it is $22K.

    Now those figures sound incredibly insane to me. I mean absolutely nuts. But until I see the properties, I will not jump to any conclusions. Back of the envelope numbers tell me I could have a two man crew devoted just to the $67K landscape every year, 40 hours per week, and I could probably still eak out a small profit. But I will go look at it later today.

    Here is my concern: They have one guy who maintains all 20+ of these properties. What sounds amazing to me is that my friend tells me that when they buy these properties, their guy is undercutting the existing LCO by 20-50%. Also, they are supposedly sending these things out for bid every year and this guy is always the cheapest.

    If I want these contracts, I could probably have them. The problem I see with this is, there is a large investment needed to maintain them. The other HUGE problem I see is, eventually someone else will get his foot in the door and undercut me. Then I've got all this equipment and the workers and nothing to do with it.

    My assumption is that these places are hit with ridiculously high maintenance bills by the contractors who install the landscape the first year. Then, as time goes on, the maintenance bill goes down more and more each year as they get bids from other LCO's.

    I will go look at these two nearby properties today and see if I think this guy is getting rich or barely eaking out a living.

    Later,
    DFW Area Landscaper
     
  2. mrusk

    mrusk LawnSite Gold Member
    Posts: 3,260

    Good luck. If it is priced right, it could be a big break for you. You could make a decent living this year!
     
  3. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    In order to make a profit you've got to be able to make your own repairs on older equipment. Because going out and buying new stuff everytime you get a big job isn't gonna make you any money.

    The guys who are usually cheaper tend to run older trucks, and slightly older equipment to keep the cost down. If you can turn your own wrenches, you truck and equipment cost will be next tot nothing, and your only big expense will be labor and insurance.
     
  4. MarcSmith

    MarcSmith LawnSite Fanatic
    Posts: 7,157

    67K with two men and eek out a small profit....Id rather not try....
    One good guy- 12 bucks an hour @ 2080 hours=24g
    one grunt guy- 8 bucks an hour @2080 hours= 16g

    just those two puts you at 40G which leave 27g for taxes, WC, fuel, repairs ect...

    I dont see why 2-3 guys could not easily do both places and then some provided they were equiped properly...Strip malls would be a good place to get en early start on the day....
     
  5. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    I do amost exclusively commercial and large ones. A $67K job if bid right is a ONE DAY a week 4 man job or a TWO DAY a week 2 man job. If a $67K job takes 2 men all week then it was bid wrong and the chump that has it is losing money. I just bid one at $99K that will take a 3 man team, two days and it is FULL Service, grass, fert, squit, mulch, fall colors, aero, seeding, etc.
     
  6. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Two guy's bring in 67K for one job? That's pretty sad IMO...
     
  7. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    It is not easy to say this will take this many men x number of hours per week. The fall overseed is a big time consumer. The color change outs are a big time consumer. Trimming the shrubs is a big time consumer. These activities are not taking place every week.

    I will drive out today with the digital cameraand measuring wheel.

    I still see the exact same problem as before. It is great news when this contract comes in but what about when they eventually cancel? We are talking large dollar investments in equipment that must be stored and maintained and insured against theft, not to mention the workers.

    Later,
    DFW Area Landscaper
     
  8. MarcSmith

    MarcSmith LawnSite Fanatic
    Posts: 7,157

    try to pitch mulit year contract with incremental increases....If you can fit it into your schedule and not need new equipment right away its great....but if thats not the case, you'll have to spend it to make it and use these jobs as a stepping stone to add another crew...
     
  9. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    I probably won't bid on them this year, but I am curious enough to drive out and take a look.

    Maybe next year.

    Later,
    DFW Area Landscaper
     
  10. MarcSmith

    MarcSmith LawnSite Fanatic
    Posts: 7,157

    If you don't look you'll never know....Worth the few bucks in gas IMO....
     

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