- After all is said and done, does the net income the business generate actually worth it? Or is it just better used as a way to save costs in in-fill projects from MHP’s you currently operate and make some side income to cover it?
Only you can answer this question. I don’t know what your business looks like. We have about 100 pads to fill over the next 4-5 years and it’s not like we’re going to stop buying parks either. At 15-20 per year just for ourselves, it made a lot of sense when you consider the going rate for moving a singlewide is $3500. I’d say if you’re not filling 15 of your own pads per year then it’s probably not worth it unless this is a business you really want to expand into. What I don’t recommend is buying all this stuff and then just letting it sit most of the year because you only set 8 or 10 homes per year. When your equipment, trucks, etc sit, it’s almost worse than working it to death.
- what’s the cost for you (employees, and other on- going costs) to set a home versus hiring it out? What’s the margin you are saving? I’m sure the benefits in speed are amazing, however.
This is a loaded question since this is a business for us, not just a side venture so we can set our own stuff so I’ll give you our numbers but if you just do this on the side for yourself you’ll be able to trim these down.
Singlewide
Anchors, Straps, Bracing systems, ABS footer pads: $4-500 depending on size of home. Variance is due to how many footer pads you’ll need.
Labor: 2 guys, 8 hrs @ $15/hr = $240, before I catch some flak for just having two guys, yes you can run a 2 man crew if you have the equipment. Before we found good, consistent help that actually showed up, my partner and I could dig in a 76ft singlewide in 2 hours but we bust ass because time is money and we aren’t hourly. Two guys who know what they’re doing can set a singlewide in a day and be home for dinner.
Fuel: 2 trucks, $50 per truck per job average. Housecat and Platypus get filled up once a week or so. $15 for housecat, $5 for platypus.
Transport: Can vary but we pay $1000 per floor.
Total: $17-1900. Transport is what kills you if you don’t pull your own homes but like I mentioned above. Where we save a tremendous amount of money is new homes. I’m licensed as a dealer and we buy about a dozen new homes each year. For those you’ll spend an extra $150 or so on block but to set a new house will cost $8-900 AND you get axles, wheels, tongue, and all the hardware.
The overarching fixed costs not mentioned above are loan payments (equipment and trucks) and salaries. My business partner is our crew lead now until we get one guy trained up and he is salaried at $40k/yr. If you get to the point where you can train somebody good with a brain in their head to run your crew then you can get away with paying them $18-20/hr. $18-20/hr comes out to roughly $40k/yr but one good guy that can run your crew is worth that and more.
- at what scale would it make sense for somebody to follow this model? I’m currently struggling finding reliable people who can do this and seriously considering just doing it myself, but alas, it’s not so simple.
All in all, unless you’ve got a spare $250k laying around and you can buy everything you need for cash and just run it as you need, I would 100% NOT recommend getting in business just to save yourself money. You’re trading one rusty knife for another. Unless you set 20 of your own homes per year, the cost savings really isn’t worth it. If you’re moving less than 15-20/yr it would be better to find a good mover to partner with. Pay them cash and keep them happy.
If you’re going to get into moving houses, get into it as a business, not to save you money. And to answer your question earlier, the older guys who run a setup crew and work it themselves have about a 50% profit margin. We run it like an actual business (not just our jobs) and our profit is about 25-30%.