I posted on your other thread, but I'll add a little bit here. With the finance plan we got from Cat, our payments are about $4000 a month I believe for a machine that came in at $147K with tax and all our buckets. We pay no interest, and like I mentioned in the other thread, we originally were under the impression there were no payments either, but my dad misunderstand what the sales guy said. Either way, it still pays out the same, so we might as well be making payments now. $4K a month is not hard to generate during the busy months, maybe a little tough in the winter but we do orchard removal during the winter and spring and it is huge money up here. During the average removal, we bid by the acre and at our production rate we're making upwards of $200 an hour, which is quite a bit more than our hourly rate of $120/hr.
It all sounds fine and good, but you're still jumping into a very expensive business to start up. If it wasn't for our tight knit community, we wouldn't have a good company to move our machine for us. We do a lot of work with a lot of people and that's what's helped us get going in excavation, our networking with other excavation guys, general contractors, and a general connection with a lot of trade folk throughout town. At this point, I don't have my CDL so we have a good friend who is doing our hauling for us. We're holding off on a dump until next year, spending a couple hundred grand this year wouldn't have been a good move on our part just yet, plus insurance on a truck is ridiculous.
For someone who is going to get started doing landclearing, I would honestly get an 8 ton machine. I know a guy that does foundations with an 8 ton machine because he can't afford a larger machine just yet, it takes him longer, but if you're not swamped with work when you first start out, what's your hurry to get done? You can get a NICE 8 ton machine for around $60K with reasonable hours and if you're a decent mechanic, you don't need a brand new machine, although the peace of mind is worth something.
