# Going broke



## Kc7998 (May 16, 2015)

Hey all first off I'd like to apologize for the lack of introduction. I'm C out of New Mexico I'm new to the industry. I'm a journeyman lineman by day and a wannabe p&p/reo contractor after hours. I always wanted to own my one business and thought hell this industry is the way to go boy was I wrong, I've been doing it for about a month now with costs out the ass not a single pay check yet and more underpayed work then I can manage. I don't know if I should get out now before I get to deep or just keep plugging along I figure worst thing worst is I come out of this with a tax write off. What do you guys think ??


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## GTX63 (Apr 12, 2012)

I'd use my electrical skills and get deeper into that trade. Lots of money in sparkies.


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## Kc7998 (May 16, 2015)

I'm burnt out in the electrical trade and I don't see much of a chance of me ever owning my own line company. No one ever got rich getting paid by the hour . I guess your saying get out of preservation. I just got an email from NFR to get on with them how are they ?


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## hammerhead (Apr 26, 2012)

Kc7998 said:


> I'm burnt out in the electrical trade and I don't see much of a chance of me ever owning my own line company. No one ever got rich getting paid by the hour . I guess your saying get out of preservation. I just got an email from NFR to get on with them how are they ?


Dude better to be burned out making money than burnt by crooked companies. Get a LLC and do licensed electrical work. around here i pay $1000-$1500 for a service upgrade on the houses I flip


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## Kc7998 (May 16, 2015)

I do high voltage I'll have to get back in an apprenticeship to do that type of work I wish I knew how do it


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## BRADSConst (Oct 2, 2012)

hammerhead said:


> Dude better to be burned out making money than burnt by crooked companies. Get a LLC and do licensed electrical work. around here i pay $1000-$1500 for a service upgrade on the houses I flip


$1600 - $1800 here for a 100A service upgrade. $1800 for the municipalities with high permit fees.


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## Field Audit Services LLC (Mar 24, 2013)

From one ex-lineman to another, I recommend you keep your day job and lose the night job. Being a lineman is soooooo flippin better than pres work. Everything you said is correct, the pay is too low, the pay is too slow, yadda, yadda, yadda...


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## JoeInPI (Dec 18, 2014)

Agreed- with a trade like yours, the last thing I'd be doing is trudging through junk houses with crap that has been left to rot for a few years, or cutting 3' tall yards for $30. It just takes time to build a business, especially now-a-days, but I'm sure you could pull it off with your experience in electrical.


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## RichR (Sep 22, 2012)

Kc7998 said:


> I'm burnt out in the electrical trade and I don't see much of a chance of me ever owning my own line company. No one ever got rich getting paid by the hour . I guess your saying get out of preservation. I just got an email from NFR to get on with them how are they ?


While I agree 100% with all the "Get out Now" recommendations, I will tell you that NFR is one of the best companies I have yet to partner with. If you insist on trying, I would say NFR is your best chance you have to making it work.


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## david (Apr 11, 2012)

*Hi*

stay in this business long enough you will go broke not a joke


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## Kc7998 (May 16, 2015)

I would like to make it work if I could I will give NFR a shot


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## BPWY (Apr 12, 2012)

david said:


> stay in this business long enough you will go broke not a joke






Know how to make a million doing P&P???????

























Start with millionS :yes: :yes:


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## BPWY (Apr 12, 2012)

david said:


> stay in this business long enough you will go broke not a joke








Know how to make a small fortune in P&P??????
















Start with a large fortune.


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## AaronMcKeehan (May 8, 2015)

Kc7998 said:


> Hey all first off I'd like to apologize for the lack of introduction. I'm C out of New Mexico I'm new to the industry. I'm a journeyman lineman by day and a wannabe p&p/reo contractor after hours. I always wanted to own my one business and thought hell this industry is the way to go boy was I wrong, I've been doing it for about a month now with costs out the ass not a single pay check yet and more underpayed work then I can manage. I don't know if I should get out now before I get to deep or just keep plugging along I figure worst thing worst is I come out of this with a tax write off. What do you guys think ??


I used to be in Property Preservation. We covered the entire State of New Mexico. I think you shouldn't get into this industry based on fact that you are in New Mexico. Otherwise expect a lot of Chargebacks, and return trips. The return trips are a nightmare in that State as you can imagine. 

NFR was, and might still be looking for Vendors out there. I have heard good things about them and M&M so you may want to look into those companies.

If you decide to get into it still, I can send you some contacts information out there and they might be able to help you.


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## Kc7998 (May 16, 2015)

Thanks Aaron I would like the contacts. I am going to give it a go I applied at NFR im waiting to see if that pans out. I hope I can use preservation work as a steeping stone into the real-estate world among other things. I know there is a ton of work out here but pricing isn't the best. It sounds like a bunch of the Regionals are having trouble finding good vendors. If the loses are getting to be too much I'll just pull the plug I guess


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## Splinterpicker (Apr 18, 2012)

CUT BAIT AND RUN At the height of profitability in 08 and 09 i almost lost my wife , daughter and sanity, the last some people KNOW i lost a long time ago! Seriously cut and run. in 2011 we were cut 65% by FAS in 6 months everyone across the board all states and all regions. That was the turning on of the exit sign and I was out after being in the industry for 16 years. Listen to the veterans and close this chapter in your life. If you have a full head of hair you wont in a few years in this industry.


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## Wannabe (Oct 1, 2012)

Kc,

You, like thousands of others with good intentions, will need to find out for yourself that the "good days are long gone". Can you make a little extra spending money and willing to work your butt off for a hundred bucks? The answer is yes. Can you run a legitimate business at today's numbers? Largely that is a loud NO.

Try NFR. They are all the same (Companies). Have a good friend lost several $10,000's with NFR and another who likes them. Both very good companies back in the day....now the only remaining company can't afford to hire good subs/employees due to pay structures and constantly complain and fail QC's. 

My advice:

Work hard and don't complain. 
Work for free for the first several months without complaint and work your way UP the vendor list to get the better jobs. (Free means keep your expense at or below your estimates)
Take ALL the job requests that the Company will ask you to complete. That may mean driving 200 miles 1 way to bid a property for repairs for a measly $25.00 bid fee that no way in heck will you get those repairs. Don't complain...be a team player
Work ONLY part-time BUT be sure to get to those 200 mile away jobs completed within 24 hours or risk YOU paying the necessary repairs out of your own pocket. 
Work with equipment that YOU already have....don't go out and purchase equipment until you are ready to make the switch. You should already have mowers, trimmers, compressors, trailers, trucks, ladders, assorted gauges and miscellaneous stuff. 
Work to pay for good E&O Insurance. 
Work hard to replace the nice truck you will scratch up and wear out within the year. 
Work hard to have plenty of spare tires you will need going in/out of landfills..I used to get a flat a week in the good days. Dang roofers. Should of bought stock in Fix-A-Flat. 
Be thorough on those nasty cleans since the "local" realtor in her high heels may get dirty and fail your clean and you get the pleasure of redoing for free. 
Stay diligent on unpaid invoices. Hope you get paid. 

These are just a few of the quirks of this business. You can do it. Keep your head up and trudge on my friend.


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## Kc7998 (May 16, 2015)

Thank you all for the reply it really helps. I am just doing it part time I most defiantly didn't put all my eggs in this basket. I'm hoping to use this as a stepping stone into real estate as long as I can cover my operating cost and put some money aside for equipment that would be great. I have turned down most of the out of town work for the regonials should I go the extra mile for NFR ? My biggest fear is the charge backs. I don't mind having to redo stuff I messed up but paying someone else is going to suck! I guess I'll just stay a one man show and do what I can to stay afloat. Is making a 1000 bucks a month outlandish ? NFR pricing seems great especially since I'm use to regional pay scale. I just can't bring my self to quit yet wish me luck I know I'm going to need it and a good insurance company. Thanks again I'll make sure to keep the operating cost super low 

What's FAS ?


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## Wannabe (Oct 1, 2012)

FAS "Found Another Sucker" or Field Asset Services. Either one is the same.


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## Evictor (Oct 5, 2012)

I have been in the bus for 17 years. you can make money, you just have to cya with everything. If you think you took enough pictures, take 100 more!! has I was told when I started, pictures are the gold in this business. If you have any questions I'd be glad to help.


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## mtmtnman (May 1, 2012)

Evictor said:


> I have been in the bus for 17 years. you can make money, you just have to cya with everything. If you think you took enough pictures, take 100 more!! has I was told when I started, pictures are the gold in this business. If you have any questions I'd be glad to help.



And every one of those photos have to be uploaded and labeled. HOURS ON THE COMPUTER UNCOMPENSATED! By the time you are done, An initial secure with a lock, wint, grass cut AT FULL HUD RATE pays $200-$220 MINUS a discount, Say 20%. Now your at $160-$176. Take a $5 lock, $5 deadbolt, $6 in anti-freeze off the top. Now your at $144-$160. Wear and tear on your equipment and gas to and from property. Whats it worth? $40?? Now your at $104-$120

Now comes time. Figure in travel time to the property. 1/2 hour each way?? IF YOUR LUCKY! Figure 2-3 hours on the job to complete all work, photos and bids. That's if your good. Now your home. Figure up all your bids, Upload and label all 500 photos, Invoice Ect. 1 hr? 

5 hours is a good average for an initial secure start to finish with all paperwork and work. Now IF you don't get a million e-mails back asking about this and that you MIGHT get paid in 45-60 days. Remember, YOU ARE THEIR BANK. What is that worth? In the end AT FULL HUD RATE if you make $20-$25 an hour your doing good. Personally i can do double that in the private sector and get paid right away without any of the headaches of photos, PCR's, uploads or the threat of chargebacks. What i don't get is how people who work 2-3 steps down from full HUD rate stay afloat????


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## Craigslist Hack (Jun 14, 2012)

mtmtnman said:


> And every one of those photos have to be uploaded and labeled. HOURS ON THE COMPUTER UNCOMPENSATED! By the time you are done, An initial secure with a lock, wint, grass cut AT FULL HUD RATE pays $200-$220 MINUS a discount, Say 20%. Now your at $160-$176. Take a $5 lock, $5 deadbolt, $6 in anti-freeze off the top. Now your at $144-$160. Wear and tear on your equipment and gas to and from property. Whats it worth? $40?? Now your at $104-$120
> 
> Now comes time. Figure in travel time to the property. 1/2 hour each way?? IF YOUR LUCKY! Figure 2-3 hours on the job to complete all work, photos and bids. That's if your good. Now your home. Figure up all your bids, Upload and label all 500 photos, Invoice Ect. 1 hr?
> 
> 5 hours is a good average for an initial secure start to finish with all paperwork and work. Now IF you don't get a million e-mails back asking about this and that you MIGHT get paid in 45-60 days. Remember, YOU ARE THEIR BANK. What is that worth? In the end AT FULL HUD RATE if you make $20-$25 an hour your doing good. Personally i can do double that in the private sector and get paid right away without any of the headaches of photos, PCR's, uploads or the threat of chargebacks. What i don't get is how people who work 2-3 steps down from full HUD rate stay afloat????


Great post!

This thread is the classic example of a newbie who won't listen. He's going to ignore the advice he asked for. Fight reality for 2-3 years then leave the industry with the same problems he had when he started. Rinse wash repeat.


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## safeguard dropout (Apr 21, 2015)

I am in the midwest. Living is relatively cheap. With all the uncompensated time and cost of self employment, you might make ends meet at around $50 an hr. That is paying the bills...no new equipment, no new truck, no college for the kids, and no retirement, and your wife's hairdo is a bowl cut on Saturday night.


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## safeguard dropout (Apr 21, 2015)

Maybe some some profit margins would help some new guys understand better. I work alone and only cut grass. One truck trailer, mower, edger, blower, and weed eater. Profit margin last year...61%. For those who don't grasp, 39% of the money I took in went to expenses, AND I WAS ONLY CUTTING GRASS. I can only imagine P&P numbers with dump fees ect.


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## Kc7998 (May 16, 2015)

61% of what you made was profit ? So every 10 dollar grass cut you put 6.10 in your pocket or am I reading that wrong ?


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## BRADSConst (Oct 2, 2012)

Kc7998 said:


> 61% of what you made was profit ? So every 10 dollar grass cut you put 6.10 in your pocket or am I reading that wrong ?


Be very careful with this. Many self employed people call things "profit" incorrectly. Profit is what the company makes. Labor is what you make.

I would suspect that the 61% goes into both his pocket as well as his companies pocket. Forgetting about your companies pocket will put you in a world of hurt quick. When your beat the chit out of your truck and equipment doing P&P work and the company pocket is empty and can not afford to replace it.


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## safeguard dropout (Apr 21, 2015)

Yes, I was trying to simplify things. Part of the 39% expenses were miles driven. The tax write of is around 55 cents...actual cost to operate the truck with purchase price and resale figured, fuel, repairs, tires, oil, everything is around 43 cents per mile. So at 72,000 miles, almost $31,000 PER YEAR spent on truck and fuel repairs ect. Expensive !


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## Kc7998 (May 16, 2015)

That still looks good to me even a 30/30 business owner split that looks great. I would love to have a company that would cover all expense pay me 30% and reinvest 30% to the business. Like I said earlier I'm doing this part time so 90% of what the business makes can be reinvested to cover cost and expand. I'm sure you guys think I'm not listing but I am. Did everyone on this form start out in P&P and transition into something else? If so what did you guys get into ?


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## safeguard dropout (Apr 21, 2015)

I started out doing P&P trashouts, initial clean, initial lawn. 4 months after starting and still broke, doing a trashout one day and spotted a good solid piece of rope and a chair and it was tempting. Time to find something else.


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## BRADSConst (Oct 2, 2012)

Kc7998 said:


> That still looks good to me even a 30/30 business owner split that looks great. I would love to have a company that would cover all expense pay me 30% and reinvest 30% to the business. Like I said earlier I'm doing this part time so 90% of what the business makes can be reinvested to cover cost and expand. I'm sure you guys think I'm not listing but I am. Did everyone on this form start out in P&P and transition into something else? If so what did you guys get into ?


Taking percentages and splits without analyzing the hours, total money and overheads, payment terms, etc. etc. etc is foolish.

Lets use your $10 grass cut as and example.

40% overhead = $4
30% profit = $3
30% labor = $3

But how long did it take? Include the billing/accounting time as well.

If the total time was 20 minutes, including driving, cutting, invoicing, etc. Congrats you just made $9/hour. Looks pretty foolish doesn't it?

I bill out my carpenters @ $50/hr min. Roofers is higher. General labor is a little less. There is a reason I can't work Nationals or Regionals. That reason is I can not afford to.

As for my story, I got into P&P due to a failed partnership and starting over from scratch with little construction tools left. My first roof I did for free labor. The company needed money to purchase a new compressor, ladders, hoses, guns, etc. P&P filled in the down days, Looking back, it was a big waste of time. I spent so much time working for peanuts I didn't have the time to focus on where the real money is at. Trust me, it's not $20/cyd or $25/grass cut.


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## hammerhead (Apr 26, 2012)

Kc7998 said:


> That still looks good to me even a 30/30 business owner split that looks great. I would love to have a company that would cover all expense pay me 30% and reinvest 30% to the business. Like I said earlier I'm doing this part time so 90% of what the business makes can be reinvested to cover cost and expand. I'm sure you guys think I'm not listing but I am. Did everyone on this form start out in P&P and transition into something else? If so what did you guys get into ?


dont forget to figure in tool/mower/trimmer replacement.these lawns will tear some **** up fast. Oh dont forget the all familiar CHARGEBACK/NO PAY that you WILL get:sad:. That and hope the company you do work for dont skip town or go bankrupt and your out everything you thought you made over the last 6 months.


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## GTX63 (Apr 12, 2012)

Kc7998 said:


> That still looks good to me even a 30/30 business owner split that looks great. I would love to have a company that would cover all expense pay me 30% and reinvest 30% to the business. Like I said earlier I'm doing this part time so 90% of what the business makes can be reinvested to cover cost and expand. I'm sure you guys think I'm not listing but I am. Did everyone on this form start out in P&P and transition into something else? If so what did you guys get into ?


Kc7998-Look at the list of members on this site. Hit the tab, pick any letter and scroll down. Notice how many have only 1 post, 3 posts, 6 posts. They no longer contribute. Why?
Because they are tombstones!

Just as those that came before you, you are not the first one advised to do something else, you are not the first one to ignore, or worse, not even comprehend what posters are telling you.
You started this thread over two weeks ago stating you had yet to be paid by the company you signed up with. Is that still the case? You have skills marketable in the private sector yet remain intent on pushing into the jaws of third and fourth tier companies that will eat you alive.
It was a mistake to even offer a breakdown of potential profitability. I'll tell you right now, if I ran a regional and someone like you kept hitting my inbox, I'd upload 20K worth of work orders to you and walk away. You'd get a check in 3 months for 1/3 or less of that and I know you would take it.
The ones that succeed take the time to market themselves, build a base of local clients, amass commercial equipment.
You just got a free lesson in how to prevent bacome just another loin in the meat grinder. None of the lessons you get working for national after this will be so cheap.


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## Craigslist Hack (Jun 14, 2012)

No matter which side of the fence you are on this is a great thread.

We were all new once and I admire the enthusiasm. I wonder how many people starting out today with the current rules and payment structures etc will be able to make it last? I suspect not even 1 out of 500?

This was a tough job back when it was profitable. The guys who are making it today were around in the good times and they built a solid foundation back then. That solid foundation is what gets them through the tough times now. Without that I don't see how anyone can succeed? Nor do I comprehend why any one would try.


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## Kc7998 (May 16, 2015)

Thank you craigslist that is what I was hoping to get from starting this thread was a lot of good response. Thank you all. Now I see that they are making it off of the old foundation I have seen post of people doing 20-100 k a month and I just didn't get it. To me it seemed like the money was there but it's based off of old systems. I guess all just cut my losses and have to just pay for the year of insurance I signed up for thank you .


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## Craigslist Hack (Jun 14, 2012)

Kc7998 said:


> Thank you craigslist that is what I was hoping to get from starting this thread was a lot of good response. Thank you all. Now I see that they are making it off of the old foundation I have seen post of people doing 20-100 k a month and I just didn't get it. To me it seemed like the money was there but it's based off of old systems. I guess all just cut my losses and have to just pay for the year of insurance I signed up for thank you .


We do a pretty high monthly gross ourselves. Keep in mind that is not net.:lol:

You hear it time and time again PRIVATE work is where it's at.


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## AaronMcKeehan (May 8, 2015)

...Increasing "Net" for Property Pres was the whole reason I started our Automation Service at ParadigmRPA. People are complaining about having to manage photos, invoices etc. I know what that was like because I used to do it all.

So I started automating a lot of the processes and increased our Net by 2-3k per month.


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## Kc7998 (May 16, 2015)

I can't wait to bust into the private sector


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## Zuse (Nov 17, 2012)

Craigslist Hack said:


> We do a pretty high monthly gross ourselves. Keep in mind that is not net.:lol:
> 
> You hear it time and time again PRIVATE work is where it's at.


I'm broke..:icon_rolleyes: been sued, and getting sued again, plus i closed on my 4 property today. that's why i couldn't reply to your text..all freaking day in lawyers office closing on just 1 property. raided the Chinese buffet, and took a nap. 

I'm really looking forward to Monday to start it all over again. 

Oh and i had a FedEx advance on a 24k job, they had no choice.. Ok so who said life was fair?? 

Oh, did i mention im broke.


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