All Forum Posts by: Chris Adams

@Eugene Beard

http://www.investopedia.com/terms/l/libor.asp

Sales update

Sales have slowed since its winter, they always do but here is where I stand right now.

I had a unit scheduled to close at the end of December, but thanks to the Frank Dodd Act It didn't close until Jan. So I closed 2 units in January. Numbers came in very well on both, actually I crushed my original profit goals I set at the beginning of this project.

Since starting this project I have closed 12 of the 46 addresses I purchased. As of today I have 5 more pre sold units that will be completed in early spring. Plus 2 turn key spec/models on the market ready for spring buyers. 

So in order to hit my original annual sales goal of 12 addresses per year for 2016, I need to build and sell 5 more address which is 3 buildings. Late fall early winter was very mild up here so I managed to get 1 last foundation in for myself. This foundation is purely a spec to ensure I have some type of inventory for spring buyers. Which means I really only have to build 2 more buildings and sell my existing inventory in 2016 to hit my goal. Im pretty confident in that. 

I put together a spreadsheet to see my 2016 forecast of sales along with the subcontracting work we do for ourselves. In this forecast I up'd my sales goals for 2016 and expect to that with my current pre sold units I should be able to hit 18 this year.

Please feel free to ask some questions and I will be happy to give some detailed answers.

Yes it really is time for an update.

I have been spending 99% of my free time (which isn't much) here

https://www.biggerpockets.com/forums/311/topics/18... which also needs an update

The last thing I was talking about was purchasing a skid steer. Which I did and I couldn't be happier with that decision. I am using this machine so much more than I could ever have imagined.

My company takes care of all of the land maintenance for the HOA. We cut the grass remove the leaves and clear snow from the driveways and sidewalks. This is a really fantastic gig and is fairly profitable for the amount of time I have to invest. But one of the problems I have seen coming is removing snow from driveways in a timely manner as the subdivision grows.

With sales going as well as they are, the number of drives ways has increased quite a bit from last winter. Last winter we used a nice commercial Toro single stage snowblower. 1 guy could clear a driveway in about 5 minutes on a 3" snow. And last winter we had 14 driveways. That was just over an hour for 1 guy to clear a light snow. Then he would have to shovel the sidewalks to the house. But last year we also had a 10" snow come thru on Superbowl Sunday that was ridiculously more than we could handle. It took us some 6 hours to clear this. Completely unacceptable, and with todays driveway count of 25 + 2 spec homes thats 27 driveways I need to clear in a timely fashion. 

I considered a few options

1. 1. Add a snow plow to my truck 
2. Cons - Its on my truck and there is a slew of insurance issues with this, and my main snow guy is to young (21) to have on my insurance for the truck. So that means I am the only person you can do snow removal. And finally snow plows beat up trucks.

2. Get another snowblower

Cons - this requires another person to run it, and I'd prefer not to depend on another person. It's also not a long term solution considering this time next year the driveway count will be around 40.

3. Add a snowblower attachment to either my John Deere tractor, or my skid steer.

4. Prices for each are 4k for the Deere, and 6k for the skid steer. Adding and removing the snowblower to the Deere takes about 30 mins every time we want to swap it on/off. Adding a snowblower to the skid steer takes less that 5 mins on/off. Deere has an open cab, skid steer has a closed cab with heat. Deere snowblower is 48" wide thats 5 passes to clear a 16' drive.  Skid steer snowblower is 72" wide. (they actually make wider) thats 3 passes to clear a 16' drive.

All things considered here you go, this is a snow clearing beast. On our first use, which includes a learning curve time we averaged 3.75 minutes per driveway. I was concerned that it wouldn't be very efficient on light snow but we have used it 2 times on 2"-3" light fluffy powder and it works great.

My calculations of 3.5 minutes per driveway means when the subdivision is full we can clear all 60 driveways in 3.5 hours. I also feel that regardless of the amount of snowfall the time will remain the same, or close to the same. I've yet to use it on more than 4" but I feel 8" of snow won't even slow this machine down.

I had another situation come up where I needed to dill a few holes for foundation footings in a basement unit when we hit some poor dirt. This was solved by a quick trip to the rental store to get a post hole drill attachment. 

I can go on and on but overall I'm very happy with this purchase. I am saving time, money and there is a huge convenience factor having this on the job site everyday.

@Jon Klaus Look up a Bradco ground shark on youtube and I'd think that would suit your needs. The price on a new Deere 5100 is comparable to my Case Skid steer but I think you would find the skid steer to be more versatile. Also my Case has rubber tracks which cost about $5k more than wheels. Wheels might be fine for you, I'd imagine you have pretty hard ground. Finally if your going to be running the ground shark you will want a high flow hydraulic system for the skid steer. If you looking to mainly clear land there are even more aggressive attachments that can turn 12" trees into mulch

@Jon Klaus Hi John, 

I have thought about snow removal since the snow usually results in some down time for us, but honestly I already work too much ( just ask my wife). 

I ended up getting a case TR270 for $46.5 with a 68" bucket. I didn't buy extra implements yet mainly because we have a rental yard 15 mins away that has literally every possible implement for the machine. I still have the small John Deere tractor which has a box blade and bush hog. Purchasing implements for the skid starts at about $5k and goes up from there. I can rent just about anything for $200-$300 per day. I rented a big bush hog for $650 a week that cost about $6k new because I had a job bigger than my tractor could handle.

100 HP tractors are pretty big machines, what are you planning to do with it.

@Devon Garbus

I have contracted certain stages of construction at a set price for the entire subdivision, but excavating varies too much from lot to lot.  I did purchase the skid steer and since my part time college helper went back to school I hired a guy with 4 years of skid steer experience.  On the very first lot we used it on I saved over 7k in excavating cost. I still have to pay for the man, machine and fuel, but overall i think i under estimated the savings from this machine. After paying for all of the cost (man machine and fuel) I show a profit of over $5k on the first job. 

Last week we did our first final grade with the machine, I normally pay my excavator $1,500 for that. We did it in 1 day, Total cost less than $350, profit $1,150. We are now doing our 3rd job and will profit well over $6k. 

There have also been numerous other small jobs we are doing that we didn't even think of. Overall it has been a life changing piece of equipment that we can not live with out.

@Kira Alex

Thank You. I am working with a realtor and about 75% of my sales comes thru the MLS The rest come from me meeting people as the come to our model home.

Your correct about winter coming soon, I am already struggling to get concrete work done as soon as possible since winter will make it hard to get driveways and landscape installed.

As for an update, all i can really say is things are going great. Sales are thru the roof and I have 7 pressed units to build by spring. In the next 12 months i expect to close on at least 18 addresses, and I wouldn't be surprised if that number is over 20.

I use QB for Mac, if you want to be able to use the Inuit payment network to email invoices and collect rents thru the email link you can not use this with Quick books online. I love the feature of the Inuit Payment Network. I spend less than 5 minutes a month invoicing and collecting rents.

 Your points are all things I have considered, Im not concerned about purchasing myself a job. I'm a hands on GC so I wear my tool belt daily anyhow. Im just not sure the profitability is where I need it to make the jump.

I would save an estimated 29k per year, but cost of ownership eats about half of that, probably a bit more than half. In the big picture 12k profit or so just doesn't make this that attractive. On the other hand I could use this machine for many other things that don't show up on the bottom line.    Still pondering this idea. 

Here is the new 2nd floor plan. The 2 bedrooms in front of the home ended up being 10' not 9'8 and the odd shape of the tub in the 2nd bathroom is so I can have a 6' jacuzzi tub. Space did not allow us to have a separate tub in the master.