# Pricing a lot



## RandallJ (Nov 25, 2015)

This might sound odd but I have to price my own lot..

Purchased a 3/4 GMC with a basic 7.5 Unimount

Reason being is an expansion of our property and costs will get a bit out of control unless we bring plowing under our own roof.. Our current provider does a great job, just a matter of $$..

Trigger is 2" and lot must be "salted" when cleared (medical facility)

For this reason, a new company was formed to "plow" our lots and will be billing the parent company for services..

Current services are for "Lot A" (around 17,000 sq ft plus concrete drive to back parking under building)

New property acquisition is for lots B and C..

The B and C lots are the same property but depending on what the business plan is for this property, Lot C may not be used and so I must break that up a bit.. Lot C holds 140 cars

Current price for Lot A W/Salt is $300 a push.. ($85 for push $215 for salt) While salt is pretty easy to figure out (per square foot?) the snow removal is another animal..

Plenty of push off area all over the place so I guess no issues pushing piles a long ways..

for some kind of scale, the distance from sidewalk to frontage is 150'


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## Freshwater (Feb 28, 2014)

Not sure where your located but where I'm at all three lots would go for 300 with salt.


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## grandview (Oct 9, 2005)

Do this,take all the profit from your medical company and use it to pay the plow company. Then the plow company files its taxes and loads it up with a bunch of deductions.


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## SnoFarmer (Oct 15, 2004)

grandview;2063793 said:


> Do this,take all the profit from your medical company and use it to pay the plow company. Then the plow company files its taxes and loads it up with a bunch of deductions.


Why go legit?
Just pay the plow guy (yourself) in cash.

and why don't you know your costs in clearing these lots?
His cost doesn't matter, what are yours
Salt, your cost applied 
Your cost of Insurance:laughing:be sure to tell them it's a medical facility.. As the liability is diffrent for diffrent business types. 
They maybe you will understand his pricing better.

What exqupment are you going to use.
sq Ft of sidewalk
Etc etc

So your starting a plowing company to plow your other business lots.
Well, you know the drill.....


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## Mark Oomkes (Dec 10, 2000)

What is your location?


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## grandview (Oct 9, 2005)

Mark Oomkes;2063821 said:


> What is your location?


Kalamazoo


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## LapeerLandscape (Dec 29, 2012)

Mark Oomkes;2063821 said:


> What is your location?


I've complained to MJD about this a couple times before. I think its important that you have a location in your headline or log in line.


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## maxwellp (Feb 16, 2013)

Kalamazoo - is he not in jail because he brought his toys to the Library? Ha

If you are charging yourself charge whatever you like

With salt
A = $300
B = $300
C = $600

Where are you?

Here it would be 1/2 that. 
What Are the other sizes?


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## BUFF (Dec 24, 2009)

RandallJ;2063746 said:


> This might sound odd but I have to price my own lot..
> 
> Reason being is an expansion of our property and costs will get a bit out of control unless we bring plowing under our own roof.. Our current provider does a great job, just a matter of $$..
> 
> ...


Odd.....yes it is.

I get the plowing being brought in house (they'll soon learn it was a mistake), the piece that doesn't make sense is who formed this new company and why? Who's going to plow the lot, a parent company employee or a "new" company employee?
Typically business owners set up separate corps that own the property the business occupies, for leasing equipment but not for maintaining the grounds.


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## RandallJ (Nov 25, 2015)

This is in NE Indiana.. 
Why a new company... short answer is "liability"
Staffing? new hire at $24 an hour
Profitability is inconsequential at the moment.. 
current services on the last year were $3000 + (10 events) and will likely quadruple this year with new property.. Who gains from this expense, certainly not us.

We have at least two "experienced" operators already on staff and are more than happy to assume this job (in addition to their current duties).

In the case of a heavy snow fall year, our expenses will only go up on the hourly wage side and likely a bit more maintenance on equipment rather than $900-$1200 a snow fall...

I get the sour grapes about a customer pulling the plug on a profitable lot but by the same token, why do you work on your own trucks when there are professional technicians out there that do it all day long for a profit? Don't you feel bad when you take hundreds out of their pockets by doing your own hoses, belts, oil changes, brakes, plow service, tune-ups etc?

I would think to maximize profits and minimize expenses.. Currently it takes $300 to plow and salt the small lot (under an hour), adding lot 2 doubles the cost with lot three doubling up again.. Now we have $1200 X an average of 12 events per year (over the last 5 years) and $14400 out the window..

We bite the bullet and buy a $5000 truck and pay a driver $25 an hour to run the truck.. and this leaves us around $9000 for salt, maintenance and other expenses.. ( I think it is doable) 

Even if we repeat and buy another truck the following year, We should come out ahead..

Now "why form company".. looking at the big picture, it would not be inconceivable to acquire a neighboring lot for "profit".. That would put the medical facility under the gun should something bad happen.. (not an option) The cost of setting up this company is under $300 and simply makes sense for the small expenditure..

This also insulates the company should the truck be involved in a crash, injury or worse a death... 

I drove trucks professionally for a lot of years and being a company driver certainly has it benefits over being an owner operator.. Just a matter of who is going to assume the risk of a loss. As we already stand to lose $15k moving snow, why not take that same amount and see if we can end up with an asset at the end of the year? (truck, plow, spreader) Company could just very well work out to be a money maker should it decide to take on another lot or two?

Prevailing wage in our area is $15-$18 an hour for a company driver that must be available 24/7, at $24 I think we can get a guy that just wants to supplement his income and can leave home at 5AM and be home again by 10AM..

Could very well be completely wrong about all this but hoping not..


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## Brian Young (Aug 13, 2005)

I thought this would be a big lot lol.


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## Brian Young (Aug 13, 2005)

I get what your saying and agree to some extent but remember your coming to a site where people do this for a living and asking us to reveal our cards so to speak . I worked at a state facility as a mechanic, we had our own plow truck (brand new Chevy with BOSS plow) and every time I'd go to plow the lot my supervisors said no he needs to be in here working on cars. Either the lot didn't get plowed when it needed it or I wasn't fixing cars when they needed to be fixed or they had someone who knew nothing about plowing trying to plow.


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## SnoFarmer (Oct 15, 2004)

LapeerLandscape;2063832 said:


> I've complained to MJD about this a couple times before. I think its important that you have a location in your headline or log in line.


Right on big brother, everyone's IP should be visible to all.

Pisssst some dont even use their real names....

I know,  crazy ain't it....


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## Herm Witte (Jan 27, 2009)

A 5000 investment for a dependable plow truck? I just sold two trucks over 10 + years old for more than double that. Why, because they were showing their age and reliability became in question. Your plan may work if someone looks after the truck as their own and if you have no significant repairs. I think you are misjudging our industry.


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## BUFF (Dec 24, 2009)

RandallJ;2063909 said:


> This is in NE Indiana..
> Why a new company... short answer is "liability"
> Staffing? new hire at $24 an hour
> Profitability is inconsequential at the moment..
> ...


Most of my customers were DIYers, sounds good at the time but at the end of the day it's not. Employees take vacations, call in sick, quit and get fired.

Spending $300.00 is the cheap part, for a standalone company add GL, WC, Com Vehicle insurances, Vehicle / equipment maintenance, materials cost and storage it becomes much more than most would want to bit off for a couple acres of parking lot and sidewalks.


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## SnoFarmer (Oct 15, 2004)

What does this new employee do in the summer?

Ho Ya you will need 2 employes. Jmo...
Cya a back up truck and snow blowers anda list of people you can call24/7 to hire.

Enjoy.


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## RandallJ (Nov 25, 2015)

Nothing better than a good challenge.. As a mechanic/garage owner/racer.. nothing ever motivated me more than "it can't be done" or "it won't work"  I will be upfront and report back the downfalls, trials and tribulations.. 
I have been self employed since 1977 and pretty sure I can pull this off.. This is not a commercial endeavor and the truck wont be seeing 18 hour days... I already have 2 drivers wanting the hours and so cross my fingers...

Worse case, I will go buy a brand new truck, new plow and write it off over 5 years (other ventures have left me in a position to do this but I like trying to be smart cheap too).. Even with that type of outlay, I am even at the end of the 5 years 

Do appreciate the insights and years of knowledge behind some of these warnings..


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## RandallJ (Nov 25, 2015)

Brian Young;2063931 said:


> I get what your saying and agree to some extent but remember your coming to a site where people do this for a living and asking us to reveal our cards so to speak . I worked at a state facility as a mechanic, we had our own plow truck (brand new Chevy with BOSS plow) and every time I'd go to plow the lot my supervisors said no he needs to be in here working on cars. Either the lot didn't get plowed when it needed it or I wasn't fixing cars when they needed to be fixed or they had someone who knew nothing about plowing trying to plow.


Oh I do get that... knowledge is income in the mechanics world for sure.. I never gave it away.. Not a stranger to the value of "free" advice.. one can expect to get what he/she pays for.. but some insight can be had from it all the same.. Will never get used to guys coming in wanting a "Free" diagnosis so they could go home and fix it.. (after asking to borrow my tools.. they would be better off to ask to borrow my girlfriend, I can work without her)

Have ushered in a number of new business owners over the years that had grandiose ideas of 6 figure incomes only to find out it was tough to clear 10% of gross..


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## LapeerLandscape (Dec 29, 2012)

Herm Witte;2063936 said:


> A 5000 investment for a dependable plow truck? I just sold two trucks over 10 + years old for more than double that. Why, because they were showing their age and reliability became in question. Your plan may work if someone looks after the truck as their own and if you have no significant repairs. I think you are misjudging our industry.


Most of us spend more then that for a good used plow alone.


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## BUFF (Dec 24, 2009)

RandallJ;2063995 said:


> Nothing better than a good challenge.. As a mechanic/garage owner/racer.. nothing ever motivated me more than "it can't be done" or "it won't work"  I will be upfront and report back the downfalls, trials and tribulations..
> I have been self employed since 1977 and pretty sure I can pull this off.. This is not a commercial endeavor and the truck wont be seeing 18 hour days... I already have 2 drivers wanting the hours and so cross my fingers...
> 
> Worse case, I will go buy a brand new truck, new plow and write it off over 5 years (other ventures have left me in a position to do this but I like trying to be smart cheap too).. Even with that type of outlay, I am even at the end of the 5 years
> ...


I can appreciate your gumption but you may be over looking many factors. I say this due to post 16 in this thread http://www.plowsite.com/showthread.php?t=164669 good luck to you.......


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## RandallJ (Nov 25, 2015)

SnoFarmer;2063796 said:


> Why go legit?
> Just pay the plow guy (yourself) in cash.


I could quite easily but my time is around $200 an hour so does not make good fiscal sense.. however, driving tractors etc is great down time for the brain.. at almost 60 years of age, humping snow piles with a shovel probably kill me.. "Free Time" is my most valuable asset at this time..


> and why don't you know your costs in clearing these lots?


I do, but wanted an idea of how it stacked up against the rest of the world..
$1200 a push with salt up to 4" add $200 over 4"


> His cost doesn't matter, what are yours
> Salt, your cost applied


Already done but maintaining an older plow is the big unknown.. I have more than the price of the plow/truck sitting in an account for "fix it" . I do have the capitol to just go buy all new equipment should I need to, just do not want to..



> Your cost of Insurance:laughing:be sure to tell them it's a medical facility.. As the liability is diffrent for diffrent business types.
> They maybe you will understand his pricing better.


As this is "our" facility, insurance is not an issue, we carry a 5M umbrella that covers slip/fall issues.. 


> What exqupment are you going to use.
> sq Ft of sidewalk
> Etc etc


already have a 98 3/4 ton 4X4 GMC Sierra with a Unimount, walkways are 125' (already do these ourselves due to the rather ridiculous cost to have them done, I have 2 blowers (large single and an 8hp dual) Even with a larger snow fall, they are done pretty quickly (cast the snow to the building side)
Salt (treated) is $114 ton with regular salt at $84.. Am hoping 1 ton covers all three lots (right at 60000 sq ft) figuring at just over a ton per acre, I should be good (hope that is)
What I do not have is a "salt spreader".. I am thinking a $4000 budget should get me something serviceable for the area



> So your starting a plowing company to plow your other business lots.
> Well, you know the drill.....


Pretty much the case.. I also own 2 retail stores (leased property for them) and so no snow removal costs (at least outside of the yearly lease costs).. If any of the savings pan out (have to fall under $1200 a push) I will go from there.. If it costs me more over 2 years, I go back to a contractor.. Just have to see what I can do with this.. Am not afraid to fail, but smart enough to see when I have (failed at a lot of things in my life but success at something more than offsets that feeling)


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## RandallJ (Nov 25, 2015)

BUFF;2064008 said:


> I can appreciate your gumption but you may be over looking many factors. I say this due to post 16 in this thread http://www.plowsite.com/showthread.php?t=164669 good luck to you.......


Have tried to factor in what I have learned over the last couple months and then added 50% to that number.. $5000 truck/plow with a $5000 repair fund.. I looked at more $$ trucks but they were in some cases not in any better shape than the truck I got..

It took me about 6 weeks of work to decide to try this little venture (staring at contract for snow removal this coming season)..


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## Mark Oomkes (Dec 10, 2000)

Did you ever put your log out to bid? Cuz you were getting hosed. Hugely.

215 for salt is a ripoff.


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## RandallJ (Nov 25, 2015)

Mark Oomkes;2064032 said:


> Did you ever put your log out to bid? Cuz you were getting hosed. Hugely.
> 
> 215 for salt is a ripoff.


Well that is great... the $300 is the lowest bid we have received in some 5 years.. It looked to me that the cost of the salt should have been around $35 plus labor, figuring markup of 50% on product, $70 and now $145 to spread it? 
I had to look at this number X4 with the new lots and so is why I am pursuing this idea.. free enterprise and the open market are ruled by supply and demand.. I guess we have a lot more demand for snow removal than guys to do it..


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## halfkeck (Sep 9, 2015)

I wouldn't let the cost of the truck deter you. We gambled on a used 2500 GMC 2500 with a straight blade as our weather is very sporadic. First year no revenue was generated. The sidewalk philosophers were all questioning me. Year two saw the truck pay for itself in a week. It never missed a beat when the chips were down.


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## SnoFarmer (Oct 15, 2004)

Ok it sounds like you have crunched some numbers.
A few things 
Yes you say you have a 5 mill umbrella.
1 snow plowing has to be listed on yourolicy and your insurincance company will have a higher rate for a medical facility , it doesn't matter that you own it,
Someone else is leasing it. There is just a much higher liability with druged up folks walking out on a snowy day. 

And a 5k truck so you have 5k to fix it, what truck do you use in the mean time when its in the shop.
And what if the plow goes out of service?
Falling to preform services and the office can't open, you could find yourself in hot water.


And what does the plow guy do in the summer?
Collect unemployment.
Do you have a pool of compendent operators for your truck ?


Well, good luck, it should be snowing soon.
Let us know how things progress .

We're not hear to say you can't do it,
We just want you to go into it with your eyes open as we see a lot of folks with
Quick money aspirations .


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## RandallJ (Nov 25, 2015)

SnoFarmer;2064099 said:


> Let us know how things progress .
> 
> We're not hear to say you can't do it,
> We just want you to go into it with your eyes open as we see a lot of folks with
> Quick money aspirations .


Appreciate it thank you..
I already employ the two guys.. I own a couple retail stores they run for me so not an issue.. they are chomping at the bit for the income and know how to take care of equipment.. We owned a water park in Tempe AZ and I can tell you that abusive operators probably account for more expense and damage than any product defect could dish out..

IF I was doing this to earn a living, it would be a much different setup.. I would in fact purchase a 2 year old truck and new plow and something like I have now for backup , would dedicate funds for advertising (I have opened a number of business's and this is a shortcut you can not take). Year two would either see it close up and go away or double in size.. no in between.. A business that is not growing is in fact dying.. Numbers must go up or you need to take an out..

I have been pretty lucky at business choices (a tad paranoid with a good dose of "go for it"). I could retire now without too much worry but frankly, I like working for myself and enjoy the freedom that my income provides..

Alternate plan is to have a contractor I know come in and wipe the lot clean if I hit a wall.. he is new last year to the biz but has 3 trucks and I am thinking I will work out a deal with him in case one of his trucks quits on him so he can sleep better.. He is a competent wrench twirler as well so that gives me an out if I need it..

I am sure this is going to be a bit of a challenge with the parameters I have set for myself but I think it is going to be fun in the end.. I can buy my way out of a mistake but that is not so much fun as it is humbling..


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## FredG (Oct 15, 2012)

I have seen many Company's try to do there own snow services, From big small and in between. I have yet to see one succeed at it. Most of the time you are taking your help from there everyday duties and puts you in trouble inside,

My shift starts at 7am I been here since 3am I'm tied cold and hungry I'm going home.

The truck they got is a piece of **** and I froze fixing something and I took the heat cause the lot was not cleared in a timely manner.

Screw this I get 14 per hr in the plant most guys are getting 25per hr plowing snow.

I'm taking the heat they are complaining over the salt usage.

My kid come home with the flu I will not be able to work as I'm sick now.

The wind blew a snow drift in the loading docks suit up and get him out of there trucks are waiting.

I got stuck in a pile I had to call a wrecker to get me out.

My main machinist slipped and fell he the only one with enough sense to plow snow he's out on WC.

Should I go on?? This is not something you put together overnight. What is your backup plan. Oh I forgot snowplowing is not hard, What do you have to do. Just get the snow off the pavement where good to go a monkey can do that.

I wish you luck plowing snow and taking care of your other ventures at the same time.


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## RandallJ (Nov 25, 2015)

Well Fred, hope to be the first then.. if not, I will gladly accept defeat.. 

Knowing myself from past business, I would regroup, figure out where I failed, fix it and try again..

I think I should start a personal journal of this "can't be done" endeavor.. might help me root out issues in the end..

Gawd I hate that "I told ya so" thing at the end...  (hoping to avoid that)


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## FredG (Oct 15, 2012)

RandallJ;2064302 said:


> Well Fred, hope to be the first then.. if not, I will gladly accept defeat..
> 
> Knowing myself from past business, I would regroup, figure out where I failed, fix it and try again..
> 
> ...


I wish you the best,


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## RandallJ (Nov 25, 2015)

This thread kind of morphed... anyway.. serviced the hydraulics today.. Fluid was ATF, clear and just a bit of metallic laying in bottom of reservoir.. Filter screen was clean and so blew out pump housing and screen with some brake clean and put it all back together.. I did not pull the power leads to the pump motor, just laid it across the top bar of the plow..


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## maxwellp (Feb 16, 2013)

That will plow your lots - No problem.


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## maxwellp (Feb 16, 2013)

Only problem I see is will the "wrench twirler" Get your accounts done in time If your truck / plow has problems?
I have a backup truck and plow sitting ready to go. I plow with it every 3rd 4th time just to keep it working.


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## RandallJ (Nov 25, 2015)

maxwellp;2064444 said:


> Only problem I see is will the "wrench twirler" Get your accounts done in time If your truck / plow has problems?
> I have a backup truck and plow sitting ready to go. I plow with it every 3rd 4th time just to keep it working.


Only one account me  I can see your point about running the truck yourself on intervals.. Never fails.. "When did that start happening?" "oh, awhile back" ...

Meanwhile transfer case grinds itself into metal filings... If this year goes well, perhaps a different truck next year and use this one as a backup? Depends how lucky I get with breakdowns..

Saw your homepage.. I think that TIO-520 is what we had in our 206.. thing never missed a beat..


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## maxwellp (Feb 16, 2013)

That engine had 500 hours - I put it in there 3 years ago. It is a Picture airplane, has a huge camera in the belly. They got a new guy flying it this last year. He was running it at 75% at 14 GPH. Burned up all the cylinders, three had 0 on a leak down. Put 6 new ones on.


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## maxwellp (Feb 16, 2013)

I ran my first year with one truck and made it (1987). Next year got the second with it's own plow. With only 10 or so snow events I would chance it.


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## RandallJ (Nov 25, 2015)

maxwellp;2064495 said:


> That engine had 500 hours - I put it in there 3 years ago. It is a Picture airplane, has a huge camera in the belly. They got a new guy flying it this last year. He was running it at 75% at 14 GPH. Burned up all the cylinders, three had 0 on a leak down. Put 6 new ones on.


Pounding on that plane.. probably lean too.. EGT was probably through the ceiling.. new to constant speed prop maybe? I got my HP rating just so I could fly it (belonged to my step dad).. what a nice nice aircraft to fly..


maxwellp;2064496 said:


> I ran my first year with one truck and made it (1987). Next year got the second with it's own plow. With only 10 or so snow events I would chance it.


We average around 32 snow days with around 36" total a year (historically speaking)..

2 years ago was 9'.. and over the last 5 years, around a dozen days a year that need plowed.. Ice is a bigger issue for us (on our lot at least)


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## jhenderson9196 (Nov 14, 2010)

Randall, ever heard of running L.O.P.?


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## RandallJ (Nov 25, 2015)

jhenderson9196;2064587 said:


> Randall, ever heard of running L.O.P.?


as it pertains to aviation? yes.. outside of that.. nope..


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## KildonanSnowRem (Oct 17, 2015)

RandallJ;2064426 said:


> This thread kind of morphed... anyway.. serviced the hydraulics today.. Fluid was ATF, clear and just a bit of metallic laying in bottom of reservoir.. Filter screen was clean and so blew out pump housing and screen with some brake clean and put it all back together.. I did not pull the power leads to the pump motor, just laid it across the top bar of the plow..


Haha love the car in the background. I'm on your team, all these guys say it can't be done but I definitely see where you are coming from. You can easily handle it.wesport


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## RandallJ (Nov 25, 2015)

KildonanSnowRem;2064603 said:


> Haha love the car in the background. I'm on your team, all these guys say it can't be done but I definitely see where you are coming from. You can easily handle it.wesport


Thanks, I tried to think this through to the bitter end (always looking for how I will be defeated)... I may lose this gamble but I plan on having fun with it regardless.. Been some time since I really got my hands dirty..

The car lives a pampered life.. is an 08 with 10k on the clock.. The climate control garage is a necessity for all the toys.. I keep my bikes in there also (no hot/cold cycles really save wear and tear on fuel tanks and other hardware)..


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## leolkfrm (Mar 11, 2010)

sounds like he wants to start his own property management co....find that a lot down south...works well when you need something done asap

why not come up with an hourly rate and charge accordingly


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