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HUD Foreclosure Property Estimate

Discussion in 'Lawn Mowing' started by sgl41377, Oct 4, 2004.

  1. sgl41377

    sgl41377 LawnSite Member
    Posts: 191

    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?
     
    lee b likes this.
  2. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    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.
     
  3. steve122

    steve122 LawnSite Member
    Posts: 208

    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.
     
    lee b likes this.
  4. SellPoint

    SellPoint LawnSite Member
    Posts: 32

    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.
     
  5. dkeisala

    dkeisala LawnSite Senior Member
    Posts: 911

    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.
     
    lee b likes this.
  6. sgl41377

    sgl41377 LawnSite Member
    Posts: 191

    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.
     
  7. steve122

    steve122 LawnSite Member
    Posts: 208

    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.
     
  8. sgl41377

    sgl41377 LawnSite Member
    Posts: 191

    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.
     
  9. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    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.
     
  10. Mikes Lawn Landscape

    Mikes Lawn Landscape LawnSite Senior Member
    from Texas
    Posts: 458

    That there is some FUZZY MATH
     
    lee b likes this.

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