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Need an opinion.

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Need an opinion.

Post by dp1 on Tue Mar 07, 2017 11:46 am

As you all know I am selling my vans, and as I'm talking to one of potential buyer yesterday through FaceTime to show him the van and stuffs, he said that the new transits are pretty much have V6 and that he prefers to buy my equipments only, I told him that I'm not desperate yet to sell just the equipments, last night I was looking at those new transits and they are crazy expensive, they are close to 40 k if not more after taxes and fees, and he's right, I didn't see any V8 motors on those new ones, this makes me considering keeping one of my van because both my E250s have V8s motors.
I think I would rather sell one van together with the equipments ( everest 408 with Nissan motor ) and keep the other E250 with V8 5.2 litre cause those bigger motor have a more reliable transmission, what do you think ?
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Re: Need an opinion.

Post by Devon07 on Tue Mar 07, 2017 1:08 pm

Im getting the Transit...I thought about the ecoboost which is an amazing motor but my ordered unit was with the 3.7 as it was all I needed....Mine is the mid size with two sliding doors....Im sold on them. I drove one and couldnt believe the power. fuel is a little better tooo.....I am keeping my V8 chevy though, so ill have both. Room is more valuable to me than v8 especially when I dont need to race....lol I can stand in this thing!

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Re: Need an opinion.

Post by milspec6 on Tue Mar 07, 2017 1:35 pm

Being able to stand up is the biggest selling point to non-van vehicles, but the motor has to have enough "torque" to haul a heavy payload 24/7.  Forget about "horsepower" numbers as they mean nothing in our industry since we do more stop and go.  You want to compare the torque and gear ratios of the vehicles you are considering as once you throw in a 700 lb machine, a couple hundred more of chemicals, tools, and of course a 1,000 lbs of water / tanks, it will no longer drive like it did on the empty test drive.

If it wasn't for the rusting issues, a diesel Sprinter would still be my first choice, but around here, it would dissolve in a couple of years.

What-ever you consider Dp, forget the sales garbage and compare the gear ratios (transmission, axle) along with engine torque curve to make the right decision.

For example, I used to drive old Jeep CJ's for a personal vehicle in the city.  It only had the inline 6 and people were all running around swapping in 350 Chevy V8's to get more power.  The problem was that both engines generated the same power and torque up to 2,000 rpm which was about all you did driving around town.  In other words, they had the same power despite the fact that one produced over 50 horsepower more at peak rpm.

Torque is gets your van moving, horsepower is what keeps it moving.  In city driving, the greater torque will net you better performance and far better mileage per gallon.
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Re: Need an opinion.

Post by dp1 on Tue Mar 07, 2017 9:26 pm

Yeah the new transit has better torque for sure, but the price point has me concerned, especially if I don't get a used Everest HP 650 then I would have to fork $ 35 k for a new one, and I don't know what's the market interest rate on those industrial equipment now, my credit is very good ( 740+ ) but as you know this is a high risk industry and the banks love us, lol.
The way I see it is if I end up selling both vans and both machines with all of the equipments, I will get minimum $ 47 grand and as much as I don't want to pay new everest but if I have to then I will pay cash on that and then put the $ 12 grand as a down payment on the van, but if the van's price is $ 40, that means I'm financing $ 28 grand, even at 2.9 % that they are offering now, that would still be around $ 470 / month ? Shit man, I really don't want to be paying that much for 5 years, best case scenario is if I sell everything and can find a slightly used van and slightly used everest hp 650 for the price I sold both units, that way I'm all even and then I can depreciate the rig for 5 years, win win situation, but we all know how difficult to get an almost new set up for that much ? Well okay even if I have to fork another 3 grand and make it 50 grand for an almost new set up, it's still a win win situation but that's the perfect scenario and we all know this industry is not all that perfect, lol.
Scott, if you don't mind me asking, how much are you paying for that new van ? Is it regular length or extended ?
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Re: Need an opinion.

Post by milspec6 on Tue Mar 07, 2017 9:33 pm

Dp, you have just illustrated why I am still working with an old Butler van and now a simple TNT. I paid cash for both and although I would love to be rolling in high style, I just can't see throwing 50-60k on a new rig.

I still think a lease deal from Butler makes more sense to me these days and just trade-in for a new one every 3 years. That will be my path in the fall if I am still operating at that time.
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Re: Need an opinion.

Post by dp1 on Tue Mar 07, 2017 10:27 pm

Yeah Bob, I dislike loans, even though I have taken a few auto loans in the past especially the work vans, the interest rate has to be under 6% for me to sign the loan papers. The only one that I took over from my brother in law on 2008 is the combined loan of van and truckmount at 7.9%.
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Re: Need an opinion.

Post by milspec6 on Tue Mar 07, 2017 10:44 pm

I feel the same way.....funny how the lease doesn't seem to bother me as much these days despite being a cash and carry kind of guy. I try to look at this way, our van is our business so we will always require one and they are normally wore out in 4-5 years anyway. After that, you don't own anything except a worn out rig and headaches.

A lease gets you a clean rig always under warranty. You never end up owning anything, but you will always have a top flight unit to work from.
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Re: Need an opinion.

Post by dp1 on Wed Mar 08, 2017 3:26 pm

If you ask me about a lease for a personal vehicle, I'll flat out say hell no, for carpet cleaning rig, no headaches is always a win in my book, like today we were at our last job and something blew, water everywhere ( near the outer perimeter of the exhaust ), good thing we were 3 blocks from home, went back, took the other rig there and got the job done, will take the cover out in an hour or so, let things cool down a bit.
I really wish Prochem has the lease option, I would jump all over that.
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Re: Need an opinion.

Post by Devon07 on Wed Mar 08, 2017 6:39 pm

DP....you need to do something before that $47k turns into $27k....use it while you have it....

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Re: Need an opinion.

Post by dp1 on Mon Mar 13, 2017 8:20 pm

So I just sold my everest hp 650, we settle on 22.7 instead of 23.5 but I keep the hose reels and hoses, basically just machine, waste tank, pump out and chemical rack, I just unloaded everything out and I can't believe how much crap I have in there.

I figure if I don't get lucky with another unit that comes complete, I don't have to buy a whole new reels and hoses, I'm not looking just yet, but if there is a super good deal, I might pull the trigger, in the mean time I'm still debating if I should sell the other van with everest Nissan motor. A new van and equipment sounds really good but now if I go that route, it's going to cost close to 70 grand and I really don't think I want to spend that much.

Decision, decision, decision.....
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Re: Need an opinion.

Post by milspec6 on Mon Mar 13, 2017 8:55 pm

Well, you have two questions to answer in my view:

1. Are you planning on staying in this business for another 3 years?

2. Are you staying busy enough?

Your area seems to remain busy year round, so I think question 2 supports the value of a new unit. It is question #1 that has me troubled with all the talk about looking for a day job.

I think if you can commit to staying in the game for at least 2 years if not 3, then the new unit would probably be worth it.
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Re: Need an opinion.

Post by dp1 on Mon Mar 13, 2017 11:00 pm

I'm not planning to sell the business or stop servicing people even though I get another job, I've been applying to jobs only through zip recruiter but I haven't gotten any interview just yet, I am a little picky on the jobs I'm applying for though, so to answer your question, I guess I can't personally commit to be a major part of the business for a couple of years, of course that can change in a few months as soon as things start to get too busy and I get comfortable making too much money, ha..ha....
The 2nd question, right now not busy at all, but last week we got 2 days that we hit over $ 1000 / day, which is a very good sign that spring cleaning season might arrive soon, but tax season still worries me, people tend not to spend in April around here.
I just looked at the everest hp 650 with e idle, it's $ 33.5 plus taxes and install ( have to have Prochem dealer install it for warranty purposes ), that would've been $ 37 grand at least, that's a brand new Lexus IS250 man, that's way too much money in my opinion.
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Re: Need an opinion.

Post by Matt; My carpet cleaner on Tue Mar 14, 2017 2:15 pm

$70k!!!! Hol* *#+t!
Me personally, (I know I'm different);
I'd put some of the money in retirement. And finance a used rig. Let the financed be a write off my taxes. Let regular business flow make the payment. I'd find the best used Everest out there for 20-25, and run that horse for several years to get my moneys worth. Put a little cash aside for any fixing up needed. And be 10's k ahead each year.

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Re: Need an opinion.

Post by milspec6 on Tue Mar 14, 2017 4:51 pm

You made me laugh Dp with the Lexus comment. I always find it interesting what people use for a basis for comparison.....we all do it.

For me, it is with guitars. When I pay a bill, I can't help think about what guitar I could have purchased for that amount. We all do it, but spending money on equipment is an investment and not a liability.

As the advice goes, spend your money on assets and not on liabilities. The Lexus is a liability, that machine is an asset. I would not be able to shell out 70k either, but I don't have the business traffic to support it yet.

Maybe you should consider coming over to the dark side and switch to direct drives? That Butler van lease is still at $800 per month I believe....you could pay for it after just one day of cleaning in your area.
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Re: Need an opinion.

Post by dp1 on Tue Mar 14, 2017 9:18 pm

Matt, thanks for your input, I'm all about savings as much as possible for retirement and such, but as of this tax filing ( 2016 tax year ) I'm paying some outrageous amount, I could almost buy a brand new everest with that money, a slightly used machine and a slightly used van is always the best route, the machine can be deducted under section 179 ( I hope that's not going to be gutted when these bozos do tax reforms ), and the van can be depreciated for 5 years, that will save me approximately $ 15 grand in taxes next year, which is huge, but if I go new, I may not even have to pay taxes next year and minimal amount the following year, so it's all about making a smart business decision, of course that also depends on what the tax reforms look like. Hopefully not "stick it to the middle class" type of reforms, lol.

Bob, that's also an option but with our cleaning speed, I prefer something with a larger blower.

As of now, I'm leaning towards Sapphire 870 SS, I found one online from out of state distributor at much lower price than listed price and he offers free installation, the warranty is 2 years vs 1 year with the everests, and after talking to Eddie and Carlos, I found out that the parts between the two are very similar, especially the electrical parts, I have quite a few parts I stocked up for those "just in case" moments.

The only downside of spending that much money is depreciation, after 5 years when I have no more depreciations left for tax purposes, the rig will only worth like $ 25 grand, hopefully by then some CEO I clean for would've offered me a job at his firm and I can work there for $ 200 k / year with full benefits Money Pile
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Re: Need an opinion.

Post by Mo on Tue Mar 14, 2017 9:27 pm

Congrats on the sale DP. How did the buyer find you?

Matt I dint belive a regular business vehicle finance payment is deductible but you can deduct a portion of a business vehicle lease payment
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Re: Need an opinion.

Post by dp1 on Tue Mar 14, 2017 10:01 pm

Thanks Mo, the buyer is the same buyer that's been talking to me the last few weeks, from Craigslist.

I'm not sure how the lease works with tax deduction, but when you buy and make monthly payment, your monthly payment is NOT tax deductible, your cost of ownership ( insurance, gas, repairs ) as well as depreciation ( which is huge ) are tax deductibles.
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Re: Need an opinion.

Post by Matt; My carpet cleaner on Tue Mar 14, 2017 10:47 pm

A business leased vehicle; the lease paymemt IS a write off. % of business use, of course. BUT, then you CAN'T take other vehicle expenses as write offs. Tire, oil, maintainance...
So you take one or the other.
Chech with your tax professional ...
My wife has our rough draft taxes done. "#&%&$' bend over and .......

Each one of us know OUR $#'s, and calculating what works best; for us.

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Re: Need an opinion.

Post by dp1 on Wed Mar 15, 2017 7:11 am

And you won't have depreciation to deduct with lease, that's the biggest downside with lease. BUT there is literally zero headache with lease, which is huge in my book.
Pretty soon I'm going to have to make a new payment policy, CASH ONLY !! Lol.
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Re: Need an opinion.

Post by milspec6 on Wed Mar 15, 2017 1:02 pm

Top of the line Everest vacuum is 650 cfm compared to Butler's 500 cfm which is a pretty big difference on paper, but for residential I don't think it would really matter. Heck, 325 cfm is enough for residential and I routinely run hoses at 300 feet running 450 cfm without trouble.

Not to push the direct drive concept, but I would not let those specs bother you....they both are plenty powerful enough.
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Re: Need an opinion.

Post by dp1 on Wed Mar 15, 2017 10:59 pm

I don't think you're pushing Bob, and I believe you on that ( 150 com isn't a big deal ), it certainly can be compensated with higher heat ( evaporation ) to help with dry times, and I'm sure I can achieve that higher temperature in my area.
Another thing is I think going that route is not going to get me section 179 deduction which is what I'm going for, to help me reduce my tax bills.

Well one more van to go before I can get my new toy, lol.
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Re: Need an opinion.

Post by milspec6 on Thu Mar 16, 2017 8:07 am

Well, you are right, you will not get a benefit via Section 179 on a lease. The dry times will probably be about the same. I run a 450 cfm blower and I am dry before the van is loaded back up. The vac helps, but it is more about the wand, water psi, and stroke technique than the blower rating.

I feel your pain on taxes, I am estimating a big kick to the groin myself this year which is why I am waiting to file for a few weeks yet. Just makes me sick thinking about it.
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Re: Need an opinion.

Post by ACpower1 on Thu Mar 16, 2017 5:04 pm

70k on a set up holllllyyyyy shiiiiitttttttt

never in my book, I can put together a bullet proof brand spanking new 400cfm, 240f sustained temp unit for approx 9k

Then easily find a nice chevy express v8 with 60-80k miles for another 8-9 grand.

Then put 50 grand in the bank instead. Same cleaning results all day long every day.

Time is money and for me personally I would not want to trade that much time to make back the additional 50 grand.

I would take that 50 grand and put it down on a rental house, which in my area is a guaranteed investment.
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Re: Need an opinion.

Post by milspec6 on Thu Mar 16, 2017 6:59 pm

I understand that thought AC, a new Butler equipped van runs $70k as well and I just can't talk myself off the ledge when I think about it. What was it we used to say, they all suck and blow....and that is about it.

The only separation between machines are temp, vac cfm, pump gpm, and psi. They are all about the same except for gpm and vac cfm these days, so you have to ask yourself if all the extras are worth so much more money?

A low mileage 1 ton van will run you well over $22k around most areas and a good machine that specs out well will be another $12k - $17k. Throw in some shelves, tanks, reels, etc. and you are still under $45k tops.

I can understand $35k-$45k for a good set-up, but just can't see spending more than that. Of course, I don't pull the kind of business DP does either, so that would make a difference too.

My box truck will spec out at around $32,000 now that it is finished. Despite all it's headaches, that seems like a comfortable figure for what it is.

In the end it is very similar to the price of guitars. Some acoustics run over $7,000 while others might be as low as $500. Is the most expensive that much better than the $500? If you are Bruce Springsteen, that price doesn't seem bad at all, but to us mortals, $1,500 is plenty to spend of a guitar.

If your business is strong enough and your needs are best met by writing a check for $70k, then that is the correct choice for you. If I could afford it, I would as well, but I can't and so I will not.
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Re: Need an opinion.

Post by dp1 on Thu Mar 16, 2017 9:09 pm

Yeah, what Bob said !! Lol.
I remember 10 years ago $ 50 k will get you brand new everest in a brand new van, isn't that crazy that now it costs $ 70 k ?
If I'm not saving $ 20 k from spending that much ( assuming that I would, still not 100% yet ), I wouldn't even want to think about it. Plus I would be saving quite a few thousand bucks every year from depreciation, I don't know the exact figure yet on top of my head but even if I save a whopping $ 10 k at the end of 5 years, I would save $ 30 k in taxes over all, I'm pretty sure it would be a little more than that, so that 70 k van is really costing me $ 40 k for a VERY nice set up.
Everything is still up in the air now, only time will tell which direction I'm going.
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Re: Need an opinion.

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