Property Services businesses

Anybody know anything about these? I've seen some that are PE-owned, I know one that was started (on the side) by a very successful broker who ultimately 'retired' to just run the commercial property services business, something like 70 employees.

6 Comments
 
"crusty bumhole" Whatchu mean by property services
basically 3rd party providers of anything and everything under the sun as far as R&M. Like even window washers of high rises.
 

I don't, but I'd imagine it'd be a really good business. You're basically connecting low to medium skill labor to institutional landlords and third-party managers. Seems like a pretty straightforward business and those contracts can be hundreds of thousands of dollars a year, the labor is generally pretty cheap, and the relationships (once won and developed) are likely pretty sticky. Seems like you could scale it pretty well in a good sized market and/or do some roll-ups once you reach some scale. Always about the balance between quality, level service, and cost.

Has to be a higher margin business than the property management business...

 
"Dumpster Fire Yuppie" Overhead burn in construction is very roughly 1.6, but the OH&P multiplier is 2-3x for services. Margins aren't that big if accounting for bigger management/overhead numbers.

I think a big question for this as well is why would you want to do this. As management of a small company like this, you'll end up swinging hammers yourself more than likely to reduce overhead or fill a demand.

can you explain the 1.6? Is that just how many months of cash these guys usually keep on hand? Or what you mean by multiplier? I know what OH&P is but otherwise confused.

Obviously the part about swinging a hammer doesn't apply to the guy in my OP so there must be a way in his case.

 

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