Thread: How is Business?

Hello everyone. I've been reading posts here off and on for the past several months. Seriously considering starting a HI business. It seems counterintuitive given the current economic downturn. Thus my question: How are you faring in these tough times? Is your business up? down? holding steady? I would assume that those of you who have been inspectors the longest are better able to weather a bad market. I also assume that regional differences, (i.e. north, south, west), also determine market conditions. I am thinking that now would be a good time to get training etc. behind me in anticipation of a general economic turn-around. This can't last forever.
Finally i would like a sense of how long it took some of you to become well enough established that you could make a full-time living out of HI. Any comments and responses would be much appreciated!
Thanks, Doug.

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In general, business is down. My company's been in business for over 20 years but we're still way down in volume compared to a couple years ago during the 'boom.'

Personally, I think this is a good time to start in this or another real estate based business. Like you said, this can't last forever. And if you wait for times to be booming again you'll likely be passed by. All of that being said, plan on not making much for awhile, possibly a long while.

As for how long it takes to get busy, in a normal market (is there such a thing?) it seems like there's a milestone around the 3 year mark where you establish some regular clients and business. Lots of things can cause that to vary one way or another, though.

Good Luck!

Originally Posted by Doug Scott

Hello everyone. I've been reading posts here off and on for the past several months. Seriously considering starting a HI business. It seems counterintuitive given the current economic downturn. Thus my question: How are you faring in these tough times? Is your business up? down? holding steady? I would assume that those of you who have been inspectors the longest are better able to weather a bad market. I also assume that regional differences, (i.e. north, south, west), also determine market conditions. I am thinking that now would be a good time to get training etc. behind me in anticipation of a general economic turn-around. This can't last forever.
Finally i would like a sense of how long it took some of you to become well enough established that you could make a full-time living out of HI. Any comments and responses would be much appreciated!
Thanks, Doug.

The South has fared better than many parts of the country, but starting a business now will be difficult. It takes on the average about 3 years to build a home inspection business up to a point that you have a steady income. About 90% of those that enter the profession will not make it to their second year.

As you are in TN, you will need to become licensed before you do anything. This will require that you acquire pre-license education, take and pass the NHIE and them purchase the required insurance. This will cost you around $5,000+ just to get your license. Then you will need to invest in your business an additional $5000 to $10,000 to get it off the ground. This money would be for equipment, computers, reporting programs, website (a must have) and any advertising you might want to do.

So before you ever have any income you will spend in upwards of $15,000 to start a home inspection business. This is a very conservative figure and does not include any other operating expenses.

I moved to Mid-TN in July 2006 after being established in Mississippi for 11 years. I knew what not to do and what I needed to do to get my business going in my new location. This and along with all of the contacts I have made over the years has been the only way that I have been able to survive! Well, having a spouse that has a good job didn't hurt either!

Yes, you can make a good living doing home inspections. Many inspector friends of mine earn in excess of $70,000 with many earning in the six figure range just doing home and related inspections. On the average I would say that the a good inspector will net around $40,000 to $50,000 if they work full time at it.

Thanks for the replies Matt and Scott. As for the south, I believe with the exception of Florida we have weathered the real estate storm better than most. And I am aware that Tennessee requires a 90 hour course of study and a license. What surprised me is that states like Florida and California have no such requirement. I am in this for the long haul, although at age 50 my haul is looking shorter by the day! Three years sounds about right to me. If you have not made a go by then, you might want to try professional fisherman!! Still like to hear from some others, especially those new to the business as to how they are faring. Appreciate so much the info I have garnered here and will continue full speed ahead.

I'd go after the fishing thing if I were you.

At least you'd be able to eat. Maybe.

rick

Give a man a fish and he eats for a day, teach him how to fish and he eats for a lifetime.

Ted,

My wife says, Give a man a rod and reel and he'll stand there all day with his line in the water and not catch a d*@# thing.

rick

Hey Rick

Most men don't care if they catch anything. Just the freedom thing.

Also, how are you doing for work on your side of town. I was dead most of the week and then yesterday I booked 2 for today and then lost one and booked 2 for Friday and 2 for Saturday. I truly thought this week was going to be a total bust.

Fishing is an avocation, but it does not pay the bills! This is exactly what I would like to know, taking the pulse of those of you who have been at this for awhile. Are you sitting? Somewhat busy? Not busy enough? Waiting for the phone to ring? How is the HI business in your neck of the woods? And all of you guys in the south, down 20%? Up from this time last year? Finally, spinner baits or worms! LOL.

Doug,

Business is definitely off. Not sure what percentage, I haven't run the numbers. It is reasonably significant, but not enough for me to drop out. It seems to me that this is the right time to get into business. Inspectors are dropping out and getting other jobs. Once the market recovers, there will be a shortage of qualified inspectors. Those that are around now will be the ones that get the calls as sales improve.

Ted,
I've done an average of two a day for the last 3 months I believe with the exception of several larger than normal ones that tied up a whole day. I'm about a week out right now. Can't complain.

Have a 9K sq. ft. foreclosure in Frisco tomm.

I was tiring of the trashed out smaller home foreclosures but I don't mind the larger ones like the one below from earlier in the week. Cool house, had a spa with a grotto and waterfall off the master bedroom. House had been listed for 975K, but my client was picking it up for 612K from the bank.

The builder went bankrupt though. He had one next to this home that had been framed, had electrical in, and then out of money. House had been like that for now 2 yrs. I was told. You can see in the picture below. It still had the PT cables present that had never been cut off.

rick

Also, how are you doing for work on your side of town. I was dead most of the week and then yesterday I booked 2 for today and then lost one and booked 2 for Friday and 2 for Saturday. I truly thought this week was going to be a total bust.

I don't know about Rick, but my week was very similar to yours, dead all week and now I'm booked up for tomorrow and Saturday with the phone ringing all day.

Originally Posted by Gunnar Alquist

Doug,

Business is definitely off. Not sure what percentage, I haven't run the numbers. It is reasonably significant, but not enough for me to drop out. It seems to me that this is the right time to get into business. Inspectors are dropping out and getting other jobs. Once the market recovers, there will be a shortage of qualified inspectors. Those that are around now will be the ones that get the calls as sales improve.

Gunnar is correct. (BUT) I think that out about 3 plus years.

Hold on.

Best

Ron

I'll wind up with a total of six unless you count 2 large duplexes as 2 each. I have actually been doing pretty well but It has been next to nothing and then can't breath busy. May was great at a couple a day. Started June lousy the first week and then got buried. July has been average but I think will finish off really well.

The only reason I mention this is because every time I turn on the tube or the radio all you hear is crap about the market. I think we will be OK here with the oil and gas industry and lower home prices then many parts of the country.

Rick

I think I saw that house on one of the email fliers that get mailed out. If not it is the same plan. I almost got a 22,000 sq ft foreclosure/seizure to inspect about a month and a half ago. He decided not to go thru with it. Crazy things are happening.

I started in the buisness 5 months ago, Ironically I fished professionally in Alaska as a salt water capitan until my Awsome! 1 1/2 year old boy was concieved and it changed my guid life style. So now as a HI I now average 2.5 inspections a week. My buisness is in a rural community and I have to travel up to 75mi for inspections. As for the market 75% of realtors are slow and 25% are having reacord setting years. Inventory is high and quallified buyers are low most transactions are cash buyers. I will be here when it all goes.

My wife says, Give a man a rod and reel and he'll stand there all day with his line in the water and not catch a d*@# thing.

rick
Rick, Tell her it's not what I don't catch all day. It's what I don't hera all day!




Then run.

Originally Posted by Rick Hurst

Ted,

My wife says, Give a man a rod and reel and he'll stand there all day with his line in the water and not catch a d*@# thing.

rick

Funny...
What I heard is that if you teach a man to fish, he'll sit in a boat and drink beer all day.


Not that I know from personal experience, of course.

Doug, at the first of the year we had right at 110 home inspectors in the greater Nashville area and around 800+ licensed in the state. That is a large number of folks.

Anyway, the state is going through it first renewal of home inspector licenses last month. Already, the numbers have started to drop. Just in my area alone (20 miles South of Nashville) I know of 5 inspectors who closed their doors and got out of the business. I have heard that overall renewals are down about 30% statewide.

If I was set on getting into this profession I would start my schooling now and then plan on entering sometime in the winter months. Historically it is very slow from December to around March. This would be a good time to launch your business, you will be ready for the spring rush.

Being diversified is the key to success in this biz. If you're focused on one thing alone you'll fail.

Consider this down time (providing you're funded) for education, and building your biz (client base, business plan, policies & proceedures, lines of credit, tools, etc).

Don't just focus on H/I - consider component & environmental items as well (well water, pools, sprinker systems, mold, radon - consider marking up subcontracted work like lead based paint, termite, asbestos, etc)

The above items are bold italics because this is VERY contraverial in this industry - you'll hear liability, risk, looking for trouble etc. - BOTTOM LINE - the greater risks you take the more successful you'll become (financially)

Employ a GREAT construction attny. to reveiew your contracts and limits of liability.

Determine what types of homes you'll want to inspect, if you'll want to go multi-inspector down the road, etc (part of your biz plan).

The average inspector makes 60K - 90K gross a year.

Scott P is right regarding the mid-south and portions of the southern regions fairing better in the foreclosure market. I live in a area with 117 i Miami-Dade County with 200 forclosures in my zip code alone. Very few retail buyers - mostly investors (who are typically even more of a bargain hunter).

One key thing that is the cheapest for of marketing is a "Thank You" card. I send typically 4 when doing a H/I.

1 for the buyer, 1 for the seller, and 1 for each agent.

You can get them as cheap as $ .99 for 6 or you can go to sendoutcards.com to avoid the drive, stamps, writing, etc.

Marketing your biz is probably the toughest thing to do. The best & cheapest form is mixers and biz card exchanges.

Make it an Awesome and Prosperous day

[QUOTE=Scott Patterson;50550]Doug, at the first of the year we had right at 110 home inspectors in the greater Nashville area and around 800+ licensed in the state. That is a large number of folks.

QUOTE]

Scott

I am not sure of the population of your general area. That amount may be a large or small amount depending on that population. Texas has Thousands of home inspectors. North Central Texas has somewhere around (guesstimating) 1200 to 1500 home inspectors. I wish this area only had what your whole state does. That would be awesome.