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Excavator purchase advice

1965IHdiesel

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Joined
Mar 5, 2016
Messages
15
Location
Under a shady oak tree
One other thing, around here, the excavator usually makes the water and sewer connections, if you need a licensed plumber to do that, that might be part of the cost?

We also have to get bonded with the individual cities we dig in, I dont know about your area, but it might be something else numbers wise to figure in.

Not trying to discourage you, but just remembered it. Its kinda one of those overlooked costs.
 

Hates

Member
Joined
Feb 10, 2017
Messages
15
Location
Indiana
The plumber or excavator does that by us, currently its my plumber only because he charges less.

Today I made some calls and got quoted 140/hr for an excavator with a 160 size machine. Stopped at that company and dropped off a print for bid. Will have an answer tomorrow. Ill post back with the pricing. As much as Id like to own an excavator I'll be much happier to hear I can some a pile of money without spending $160k to do so.
 

Hates

Member
Joined
Feb 10, 2017
Messages
15
Location
Indiana
Got quotes back today from the other excavator and low and behold i can save $680 on my small job and about $1,100 on my larger job. Effectively 30% savings.

I have to thank the people in this post that opened my eyes to what reasonable $/hr are for an excavator.

THis doesn't mean I am not still considering purchasing my own tho.
 

brianbulldozer

Well-Known Member
Joined
Dec 25, 2010
Messages
186
Location
W. Washinton, USA
Got quotes back today from the other excavator and low and behold i can save $680 on my small job and about $1,100 on my larger job. Effectively 30% savings.

I have to thank the people in this post that opened my eyes to what reasonable $/hr are for an excavator.

Cool. The new contractor you are talking to gave you an hourly price and a bid price? I would assume that when he worked up his bid price he figured the number of hours the job would take and then added some to it in the event that things did not go quite as well as expected. In essence, you are paying him extra for him to take the risk in the job. Have you considered trying a house or two on a strictly hourly basis and see how it works out? You would be assuming that risk but if your projects are pretty similar, you have a good operator, and/or you have the same operator each time you would get a feel for what it will take and it might work out to your advantage.

Would be interesting now to go back and figure the yearly cost of ownership (interest, insurance, maintenance, repairs, depreciation, tax consequences, etc) for the machines you are considering buying, divide by the number of hours per year of utilization you are anticipating, add in hourly costs for fuel and labor and see how you compare to the hourly rate you were quoted. Might help to see what kind of rate of return you would be getting on your investment and whether the investment would be better made elsewhere in your business. If it doesn't pencil out and you buy an excavator anyway, then congratulations, you must have a touch of "Yellow Fever" and will be hooked for life like so many of us on here.
 

Graham1

Senior Member
Joined
Mar 31, 2012
Messages
300
Location
Hampshire, UK
That is a pretty significant saving per year. Makes your own excavator harder to justify on purely return on investment. If you really want an excavator regardless then that is a different matter. After all who wouldn't want another excavator if they had the spare money?
Graham
 

KSSS

Senior Member
Joined
Feb 27, 2005
Messages
4,319
Location
Idaho
Occupation
excavation
Don't forget that quality of work, being on time and running a safe operation are also things that need to be considered. Sometimes you can check all the boxes with one guy, good price, good work, safe and on time. However the rule of thumb will always be, "You get what you pay for".
 

Hates

Member
Joined
Feb 10, 2017
Messages
15
Location
Indiana
Cool. The new contractor you are talking to gave you an hourly price and a bid price? I would assume that when he worked up his bid price he figured the number of hours the job would take and then added some to it in the event that things did not go quite as well as expected. In essence, you are paying him extra for him to take the risk in the job. Have you considered trying a house or two on a strictly hourly basis and see how it works out? You would be assuming that risk but if your projects are pretty similar, you have a good operator, and/or you have the same operator each time you would get a feel for what it will take and it might work out to your advantage.

Would be interesting now to go back and figure the yearly cost of ownership (interest, insurance, maintenance, repairs, depreciation, tax consequences, etc) for the machines you are considering buying, divide by the number of hours per year of utilization you are anticipating, add in hourly costs for fuel and labor and see how you compare to the hourly rate you were quoted. Might help to see what kind of rate of return you would be getting on your investment and whether the investment would be better made elsewhere in your business. If it doesn't pencil out and you buy an excavator anyway, then congratulations, you must have a touch of "Yellow Fever" and will be hooked for life like so many of us on here.

He would let me go by the bid price or the hourly as long as we decide up front. Im still not sure which way im going with this. Id prefer to get a machine since i have an operator on staff, although he's not extremely experienced he is plenty capable and he can get better with time. And i expect to grow the home building volume which makes for more work which over time can be a tidy profit center if i do my own work.
 

Planedriver

Well-Known Member
Joined
Jan 10, 2017
Messages
131
Location
Central Michigan
Occupation
Farmer
There is one more consideration that I haven't been able to apply a monetary value to. Availability! As a for instance I own 2 semi trucks used only for hauling grain 3 months out of the year. My cost of operation per bushel is far more than the standard rate for similar equipment. The problem is.... No equipment is available when I need it because everybody is hauling grain! The bottom line for me is to bite the bullet and pony up. At least the grain gets to the market when it's ready.

Something to think about... If you are in charge of care, custody and control of the equipment, digging begins when you say go.
 

Hates

Member
Joined
Feb 10, 2017
Messages
15
Location
Indiana
Im typically very good with scheduling and don't run into much of a delay, if I do its usually the darn rain. But I hear you loud and clear.
 

cuttin edge

Senior Member
Joined
Nov 9, 2014
Messages
2,692
Location
NB Canada
Occupation
Finish grader operator
We had a 135 kobelco. Great little machine. Wore the undercarriage out on it twice. We have a 485, so far so good. They just bought another one. Haven't seen it yet, not sure what size. We were mostly John Deere, but we have a 350 lots of electrical issues, and they got rid of an 85 same types of problems.
 

Brad SEIN

Active Member
Joined
Feb 14, 2015
Messages
34
Location
SE Indiana
Hates,
We dig quite a few basements a year, have for several years. I work with builders and concrete guys. I have yet to see a builder have any luck getting into the dirt side of it. Almost all of them are like you with a track machine, or at least a skid loader. The problem with them getting into dirt work is they spend to much time with it, and lose focus on how they make their best money, building houses.

The prices you mentioned are high, but it depends on what your getting. When we dig a basement we use a Case 210 with a GCS Flex system (Trimble). But we always crumb with a track loader and someone checking grade with the stick. Basement guys love it when everything is within a half inch, and they always want every crumb out. Banks are always cut back, and dirt pulled and capped. You might be pumping everything so access with a concrete truck might not be as critical. We always take care of drains and stone also.

I'm not sure what part of Indiana your from but I think you could find some very competitive pricing. Talk to your concrete guys, they are typically happy to tell you who is doing a good job, or more likely who isn't! I'm not trying to scare you away from owning a hoe, but like one of the guys that works for me always says "it ain't as good as it looks!"
 

Graham1

Senior Member
Joined
Mar 31, 2012
Messages
300
Location
Hampshire, UK
You seem pretty set on buying a machine, but I would consider hiring (self drive) a similar sized machine to what you expect to buy and letting your guy have a go at a couple of basements and see how it goes. The cost will be minimal and you will have more data to work with. There is often a lot of difference in skill levels of someone who can drive a machine and someone who operates one all day every day. Unless your guy is going to stop what he does now for you and operates all the time he is unlikely to be as quick or good as a good owner operator whoes livelyhood depends on doing this job well so he gets the next one.
Graham
 

Hates

Member
Joined
Feb 10, 2017
Messages
15
Location
Indiana
Thought i would give you guys an update.

I hired a different company to do my excavating and we agreed to run on a hourly rate, which varies based on what machine they bring. Don't quote me on this but I think im paying around 165/hr for the 210 and 145 for the 160.. either way it's close to that.

One the first couple of buildings they where slabs, i used to pay around 24-2600 for these. I saved over $900 each with the new company.

The full basement model, which is about 3500 sf plus the garages was costing me 4400 or so, with the new company I do have my guy run the skid to move first out of the way for the excavator, and im saving over $2k on this hole.

Overall im happy with my decision to hire this new company, I'm probably going to end up buying a mini exc around a 55 size to help with backfill and grading work we do, but at this point I'm content with my new excavation company.

Thanks for all of the advice
 

Georgia Iron

Senior Member
Joined
May 6, 2012
Messages
872
Location
USA - Georgia
Occupation
Concrete building slab and grading contractor
I read this and I am not sure of what to really think about the pricing comments. Did you ask your other guy if he could work with you? A good reliable grading contractor that does not let you down is worth more than another unknown group. He has proven himself to you so he is worth more. Maybe you left something out about his work...

I have been played in this game by builders and they want a skilled reliable worker to work for lower wages.. Not me ... My construction experience and the equipment I use means I will not work for what a bobcat operator gets or lets say the local craigslist guy that will work for $50.00 per hour. Nope not happening.

It is funny it has happened twice to me in the last year. In both cases the builder and customer lost money buy not paying the HIGHER wage. The money you saved up front ends up costing you more at the end of the project.

In once case the grader left the stumps in the driveway. In another they cut the drive so that it slopes the wrong way...

They asked me to come back to fix the mistakes, I did not go back to the jobs to help fix the problems. The attitude I got when they felt I was charging to much. How much is a man worth when one always shows up to work and you cant get the other one on the phone.... How much is it worth when the job is on hold because your new guy does not show up...

I now try to work for better customers...As a matter of fact I PICK customers now... If it does not feel right I would rather sit at my shop and work on my own junk..

If you do buy a machine... I don't think you need a 2d system to dig out a house site. Unless the basement does not have a daylight side a 953 might even be your answer..

And for what its worth ... my rich uncle always tells me you can make more money off of other peoples labor than your own, its time to stop running machines and put someone else in them...
 
Last edited:

CM1995

Administrator
Joined
Jan 21, 2007
Messages
13,250
Location
Alabama
Occupation
Running what I brung and taking what I win
A few moons ago I was a home builder. I had a few skids, CTL's and a backhoe to backfill, cut driveways, rough grade for landscaping and general clean up. It worked well and was profitable as we saved enough money doing those things ourselves it allowed the use of the machine for other things like moving materials, cleaning streets, cleaning up trash, etc.

12 foundations a year IMO is not enough to invest in a big excavator to do your own excavation. All the normal costs of ownership, maintenance and labor add up and in the end you can hire it done for about the same money. Now if you're building 50-100 houses with basements the economics change. However, every business is different in how it's ran and what the ultimate goal of the business is.

When I was building my time was better spent managing subs than self performing. I could oversee many trades in the same amount of time I could self perform. As Georgia Iron said - I made more money being a manager.

The homebuilding industry in my area has transformed significantly since the crash of 2009. There are now two types of builders - national/regional big boys who spit out cookie cutters and the custom homebuilder. The small/medium local guy building affordable houses has went the way of the dodo unfortunately.

I've been solely in the commercial site work market since 2011, dabbled in it from 2005-2008 but nothing major. Commercial site work is not as profitable as building houses in the mid 2000's but I enjoy it more and since the market here has changed, I might as well as those times are gone.

Personally I don't want to build houses again. I loved the process of building and the creativity but the customers and builder chasing lawyers took all the fun out it..

I prefer the business to business work model of the commercial construction market. Profit is not a dirty word like it is dealing with retail customers. Not afraid to tell a PM or estimator that I don't need the experience - we are here to do a good job, on time, on budget and make a profit.

Just my $.02 others milage may vary.;)
 
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