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HOA Payment Schedule HELP!

Discussion in 'Commercial Snow Removal' started by snowbizplowing, Oct 25, 2009.

  1. snowbizplowing

    snowbizplowing Member
    Messages: 62

    So i got a pretty substantial contract that totals 48k over 3 years. They went with the 2 year option how should i bill them? i year at a time in advance? half now half at the beginning of year 3? I could use as much of the cash now as possible to buy more equipment and grow my business but i dont' want to scare them and demand the money up front with no motivation to do a good job? any help would be appreciated. i have a buddy in the biz for years and i got a call into him proly won't hear from him til tomorrow so i figured i'd ask. thanks
  2. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    well i hate to tell you this, but i would be very surprised if they were willing to pay you anything in advance, i would say get a month of snow under your belt first, then hit them up, keep one thing in mind, being paid in advance means you are on the hook for that service, what i am saying is there is expectations, the more they pay up front the more likely they are to be picky, or demanding. Learned this lesson the hard way, now we only take money when we are well into a job, that way my customers can't waffle at what should or shouldn't be done because they have already paid for it.
  3. snowbizplowing

    snowbizplowing Member
    Messages: 62

    Thanks for the input but they are payin something up front at least half of one year. i think i should take the total over 3 years and charge then more year 1 less year 2 and even less year 3 in order for them to have some incentive to keep me on.
  4. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    Well, it's extremely unlikely they will pay you for any future seasons now. Has nothing to do with honoring the agreement, it just doesn't make sense. The very best you can hope for is this season upfront. Maybe explain your situation, and the cash right now would be a big help. I have two small accounts through one agency that pay in October for the season. It doesn't make sense to track down 6 or 8 little checks. I gave them a competitive price in exchange for payment up front. There may be tax implications for the association too, they may want to do one half this calendar year, the other half next calendar year.
  5. snowbizplowing

    snowbizplowing Member
    Messages: 62

    Thats exatly why they will have to pay up front i gave them a VERY competitve price to secure the bid and need the cash to stay operational and take on more customers to balance out the seasonal.. we will see i have to talk to the property manager on tuesday.
  6. Pennings Garden

    Pennings Garden Senior Member
    from VA
    Messages: 242

    Just snow services?
    snow season is 5 months, 3 years, 5 X 3 = 15 }{ 15 / $48K = $3200.-
    15 Monthly payments of $3200.- every month during the annual snow season, if you are lucky up front of the month serviced, most likely, right after.

    Summer work also?
    12 months in a year, 3 years, 12 X 3 = 36 }{ 36 / 48K = $1334.-
    36 monthly payments of $1334.- every month during the duration of the contract, if you are lucky up front of the month serviced, most likely, right after.

    If you expect anything else you should have made that VERY clear in your bid!
    I don't mean to sound like an ass, but if I accept a bid for any kind of seasonal work from any contractor that is what I expect, unless otherwise explained while presenting me the bid.

    And as for incentive to keep you?? are you kidding me? That's why you have a contract and that's why you have to do a good job!!!
    Last edited: Oct 25, 2009
  7. 2COR517

    2COR517 PlowSite Fanatic
    Messages: 7,115

    If that's your attitude, and it's not in the contract, you might be in trouble.
  8. snowbizplowing

    snowbizplowing Member
    Messages: 62

    This is my first year really taking on and going after larger accounts the past couple years i did almost all Residential so its a learning process for sure. I'm going to feel out the PM on tuesday and see what we can work out. I'll post an update after i get the deal done..
  9. djagusch

    djagusch 2000 Club Member
    from mn
    Messages: 2,107

    This is how it will go unless it was written another way in the contract.

    The HOA doesn't have money for the next 3 years sitting around. If they do the money is set aside for other projects (sidewalks replacement, roofing, etc.).

    It sounds like your bid might be really low since you need other work to make ends meet. Are you losing money on this account?
  10. snowbizplowing

    snowbizplowing Member
    Messages: 62

    No matter how you quantify it i'm making money but i really would like more up front to buy additional equipment to expand even further. i have subs sitting and waiting also but i'd rather buy more equipment myself and pay a guy to drive it.....
  11. Pristine PM ltd

    Pristine PM ltd PlowSite Veteran
    Messages: 3,891

    Most condo's pay around 15 days after the month of service has ended... the payment schedule should be in the contract. You work Dec 15 to Jan 15, Get paid around Feb 1st if you are lucky. Most pay late!
    Last edited: Oct 25, 2009
  12. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    If you are antsy to get some working capital, how is your relationship with your bank? When i took on a large contract a few years ago, i was in a similar position, so i took my contract and a letter from the place i was contracted with to my account manager, and he worked out a loan amount to help me get the money i needed for equipment. Don't know if this is going to work for you, but it is what i would suggest.
  13. snowbizplowing

    snowbizplowing Member
    Messages: 62

    LOL, i've already done that i got a $20,000 small business loan against a savings account with a 3.25 percent interest rate so now i can't really tough the savings and i just need around 10k more to feel comforatable with this and another decent sized account and i want to add another nicer truck to mainly service this account. I'll figure it out i just don't want to finance another vehicle and my personal vehicle is a 2005 chevy tahoe and i've thought about making it a plow truck and i would be alot more comfortable my other two trucks are a little older and a little less reliable.

    I've heard it's not good to use the 05 tahoe for plowing... if i did want to would i have to beef it up?? depending on cost i'm wondering if that isn't a better way to get the security i need an leave me with enough working capital for payroll, expenses, ins, advertising etc etc etc.. there sure are alot more bills when you take the next step. but feels kinda cool to have a cert. of ownership on my shop wall... don't know what to do???
  14. Bird21

    Bird21 Senior Member
    Messages: 539

    1. If it is a Townhome community get a Skid steer with a plow on it.

    2. All HOA have budgets and services are paid monthly. What you are asking is like having the residents pay their dues a year in advance.. Not gonna happen!

    3. Most that we bid on give out specs that outline the payment schedule, and that is what we follow.

    4. Remember this is a service that is provided and HOA can be very picking, walk the site with all that will be working onsite, point out and MARK all obstacles, choose areas where to put the snow, and so on.

    5. Ask yourself a few questions-- How many events are covered in my contract, is salting included, what if it doen't snow this year do I have a retainer in order?, Do I have the ability to move snow onsite if it I run outta room to stack it or is that an extra. Do your homework.

    And never post prices of jobs you have in contract it is not a good idea nor does it impress anyone. Remeber the internet is public.

    I have been doing HOA for years and you will find out quickly what you think is a good job may not be. All residents have an opinion and with a thirty day cancellation clause I would make sure I do a 200% job and then some.
  15. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    have a question, please don't take offence to this, but what equipment do you have arranged so far?, if you want, you can private chat me.
  16. jimspro

    jimspro Senior Member
    Messages: 200

    i did a HOA a few years ago, it was a 2 yr deal, but it was price specific for each year, and we split the payment over a 4 month period, we got payments starting on Dec 1st, and then on the 1st thru march.
    Also i wouldn't use a tahoe for heavy commercial plowing, the front end isn't tuff enough, and the transmission won't last very long, i found this out the hard way, a good hd 3/4 ton pu works the best
  17. snowbizplowing

    snowbizplowing Member
    Messages: 62

    I truely appreciate your response and i know although some clients are impossible to please i plan on making this my #1 priortiy thanks again and do you mind if i send you a pm from time to time for a little advice?
  18. Bird21

    Bird21 Senior Member
    Messages: 539

    Yah thats cool pm away. With HOAs I am the first one out and I drive thru everysite before I call it a day, night whatever just to check and make sure all is complete. There will always be someone to complain so I try to catch any missed areas if there are any. Never just hand an account off no matter how tired you are YOU double check everything it's your nuts not your employees, espcially with a new account.

    The Property Manager will tell you what they want in detail.

    I would highly recomend utilizing the Skid Steer for Townhomes. Most are tight and the time saved will be noticed right away.. Plus stacking the snow is easier as not to damage the landscape. I only use skidders when it comes to Townhomes and trucks for the main runs.

    Don't shoot yourself with a seasonal unlimited make sure you have an accumlation cap. Are call backs extra, what about walks, and so on.

    Remeber that a 8 inch plus storm will be hourly once the 8 inches is met, anything beyond that is hourly. Only applys to single events.

    Good luck.

    I am only telling you what is standard with management companys, they all seem to have the same specs give or take a few items.

    I wouldn't use the Tahoe unless you really have to.
  19. IMAGE

    IMAGE Sponsor
    Messages: 1,747

    ummmm.....yeah........ wowzers big ben was a bad bad guy.

    And if that doesnt make sense, then how is it gonna make sense to an hoa that you want them to pay for 10/11 services before you even give them 09/10 services? I'd tell you to fly a kite.
  20. kcress31

    kcress31 Senior Member
    Messages: 451

    It sounds like you got a lot of good advice. For our large customers whether we quote hourly or seasonal or per plow, we are paid monthly. A $30,000 season would be divided by six months for the monthly payment schedule. In 25 years I haven't seen anyone pay up front.