HOA property - Need advice

Discussion in 'Bidding, Estimating and Pricing' started by Ben Harms, Feb 12, 2019.

  1. Ben Harms

    Ben Harms LawnSite Member
    Messages: 70

    Hi everyone,

    I have been running my landscaping company for 2 years to put myself through school. Saying that, I do not have much experience because of my lack of time in the industry and because the time school consumes.

    Someone from the board of an HOA recently contacting me about a full service landscape contract. Note that I have no experience dealing with type of account. The board member had shown me the service plan they were looking to get contracted - very extensive, full service / seasons maintenance.

    Realizing the amount of time, labor and expertise needed to complete this contract I reached out to a friend who has been in business for almost a decade (who also has experience with commercial properties and HOA accounts).

    What I plan to do is have him quote the property and then him and I will divide the work up. My friend is a good guy and I trust him. However, I do want to see the contract before making things final. I want to receive a commission based on me finding the contract (assuming the quote is accepted) - should I try to negotiate a percentage or how should I go about negotiating a commission?

    Also what are things I need to consider about the HOA?

    Pricing
    Timing
    Customer service
    Liability
    Contract details
    etc.

    All advice is greatly appreciated!

    Cheers,

    Ben
     
    hort101 likes this.
  2. PremierProperty518

    PremierProperty518 LawnSite Member
    Messages: 1

    I gave a bid on a HOA (for condominiums ) 2 years ago. It was a small place 15 units, however they wanted weekly lawn care, weekly garden maintenance, mulching, spring and fall cleanups, three applications of fertilizer as well as pesticides, buildings and sidewalks pressure washed once a year, general pruning, sidewalks shoveled, parking areas plowed.... tight quarters so we would need to remove snow after 2 decent snow falls (meaning I will need to bring my tractor in and pay drivers to move snow).... I wanted the account as it was good filler work for potentially new hires, so I gave what I thought was a fairly low price of $25,000.00 for the season... I was told I was outbid by nearly 7 thousand dollars. I personally would be in the negative after insurance fees, payroll, fuel ect at 18k for that job.. I’m not telling you not to bid because it can’t hurt, however keep in mind HOA’s generally go for the lowest price not the quality of work.. That being said your profit on a job like this is at risk of being fairly small, splitting A low profit with someone else can potentially be dangerous.. just make sure you know what you’re worth and stand the ground.
     
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  3. ssargcs

    ssargcs LawnSite Member
    Messages: 57

    HOAs are difficult to win and can be frustrating to keep the customers happy. Dividing the work can get messy. Personally I’d recommend letting your friend maintain it and sub-contract some work out to you. Come up with a profitable hourly rate and also ask him to let you help out on other properties. This will keep you from being tied to one property and also open up opportunities to grow at your pace. If you ask for an across the contract rate of say 10% you may find that you lose money based on the amount of work he asks you to do.
     
    Ben Harms likes this.
  4. OP
    OP
    Ben Harms

    Ben Harms LawnSite Member
    Messages: 70

    Thank you both for the responses - both extremely helpful and insightful. I had a weird misconception that HOA accounts usually pay well (perhaps I am connecting them with commercial sites).

    I'm working on sub contracting it right now. After getting in touch with other business owners I've been hearing a reoccurring theme of HOA generally being a pain in the butt.
     
  5. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 16,105

    My suggestion is you let him bid it on the condition he subs you for what you can of know how to do

    You can learn from him over the course of the contract
     
    Ben Harms likes this.
  6. OP
    OP
    Ben Harms

    Ben Harms LawnSite Member
    Messages: 70

    Also got a quick question. Who has the final say in the acceptance of which company a HOA community goes with?

    Is the board comprised of a small amount of community members who make the decision for their entire community? Multiple residents of the community know me and have recommended me for work.

    For example (@PremierProperty518) , your 25k bid would reflect a direct maintenance expense for the owners of the 15 units? Them seeing a cheaper bid for nearly 7k they decided to go with that because of the savings?

    Do you know how much say the homeowners of the HOA have in which company to they want to go with vs. the property management team of the HOA?
     
  7. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Messages: 16,105

    Actual homeowners have very little say

    Either the board officers or the PM make the decision
    9 out of 10 times, they make the decision based on price
     
    Ben Harms likes this.
  8. OP
    OP
    Ben Harms

    Ben Harms LawnSite Member
    Messages: 70

    Ok, thanks!
     
  9. ssargcs

    ssargcs LawnSite Member
    Messages: 57

    Yep, the board or PM company decide. I recently lost an HOA maintenance bid but they contacted me and asked me to do their weed control & fertilization. If you lose be professional and don’t take it personally. I’ll never be upset about losing a bid to a lower bidder. I bid at a price that makes it worthwhile, not a dollar less.
     
    Ben Harms likes this.

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