35 Years as a Contractor: How I buy equipment for Free

This is not going to be one of those entertaining videos. We are going to get straight to the point on this. This is going to be one of those videos that you're going to want to archive and put into your library because it's meant just for one type of person. And that's the type of person that wants to take their business to the absolute next level. Here's the scoop. I've been a contractor successfully, which is a difficult thing to say, for over 35 plus years. And today I'm going to knowledge dump a lot of the absolute most valuable information that I've ever learned the hard way into this video to help you guys not learn it the hard way. But on top of that, I'm going to take all of the things that I learned from the podcast. A lot of you guys know I had a podcast way back in the day called The Landscape Business Pro. Then I did a podcast for Element and I've done other podcasts on other things. And all of these guests that I interviewed, I interviewed with a strategy to take and extract all of their information out of their head for my benefit. And while I'm benefiting to help you guys benefit, and there's a few things that I learned that have stood out above all of the others like nothing else that I've learned nowhere else. And I'm going to share that with you. the absolute best of the best of the knowledge from myself and from hundreds of guests that I've interviewed, not to be light and fluffy, but to but to interview strategically and to dive into their brain and pull the secrets of success out of there. And then on top of it, unlike other social media influencers out there, I've had the opportunity to go behind the scenes with guys, people become friends with guys that have started businesses from zero and built them to a billion plus dollars. These are guys that are my friends, that I party with, I go hang out with, and I've learned a lot. And I mean, I'm talking a lot. And yeah, I may sound like I'm bragging, but I don't care. Some of you guys are going to start hating on this because it's not a typical video. [snorts] Get out of here. Go away. Go learn things the hard way. That was me and I would never go back to that ever again. But for you guys that want the cheat sheet, you want to get onward and upward as fast as freaking possible. I'm going to share with you the strategies for acquiring equipment that cost next to nothing. This is where it gets really good. So, there's three ways to acquire equipment. Buying, leasing, or renting. And we're going to cover all three of those, the benefits of each one. And the last one, buying equipment for zero dollars, is something that was taught to me through an hour-ong podcast. I typically do the podcast for 30 minutes, but I was pulling so much knowledge out of this guy that I doubled the amount of time and I just kept drilling him every single way I possibly could. I questioned him like nobody else because I could not believe what I was hearing from him. And after I was done, it was lifechanging. Absolutely life-changing. I'm not here to blow smoke up your kester. I'm here to help you guys become the absolute best version of yourself possible. And for some reason, some of you guys are going to hate on this. And those guys that do, I invite you to never come back to this channel. I don't care. I don't want you. I want people that want to take their business to the next level, that want all of the information they possibly can acquire to help them streamline the process to get to where they want to go as fast as freaking possible. I'm not going to throw a bunch of entertaining cut scenes in here. I'm not putting music in here. I'm not going to put a bunch of stuff over the scene. I'm just going to dial this in and you guys are going to need to wash, rinse, and repeat this video verbatim to take a lot of this stuff in. So, without wasting any more time, let's get into the first thing. The least effective way to acquire renting equipment. It's phenomenal. Renting equipment is phenomenal for a number of reasons, but it's also a con for a number of reasons. The biggest con is it's the most expensive way to operate your business by renting equipment, but it's also the absolute safest way because renting equipment, although it may be more expensive to acquire that equipment through renting, and I'm not saying acquiring it because you're not going to own that piece of equipment, but you're going to be able to use that piece of equipment. your average cost per hour per day is higher than anywhere else. So, you're going to spend the most money to rent equipment. But also realize it's a pure tax benefit. It costs you nothing. Remember, you're going to deduct 33% of the cost of your rent off from your yearly taxes right out of the gate. Plus, when you're done using that piece of equipment, you have no other maintenance expenses. Plus, when you're done renting that piece of equipment, you don't have to worry about repair costs. You don't have to worry about insurance. Well, you may need some insurance just during the rental period, but your expenses over the course of time as on a year-long basis is the least amount, but your amount of expense over the course of a job or a single project is the absolute highest. So, here's where that costbenefit discrepancy comes into play. I rent equipment. There's times when I don't want to beat the heck out of one of my loaders. We'll be doing a pool demo and I'll look at that pool demo be a concrete pool demo and I'll go rent an excavator that I own. I'll rent it from a different company, Chop, because I don't want the jarring or the abuse on that piece of equipment. And if I can get something that's even more efficient than what I own and get the job done faster, I can expense that against that job, I can expense that against my yearly income and take 100% of the expense of that piece of equipment off from my taxes at the end of the year. So the strategy with renting has this benefit cost association. The benefit is that it's going to be tax deductible. It's not going to cost you year round to rent a piece of equipment. And it also allows you to experiment with different kinds of equipment. Ultimately, if you do want to own a piece of equipment, you want to have some seat experience. You want to be able to sit in that piece of equipment and go, I like this, I don't like that, this, that, and the other thing. And renting is a great way to get that inseat experience. But renting is going to cost you the most on your overhead on an hourly basis. And some of you guys must calculate your overhead. We do it daily, but some guys will do it on an hourly basis. So, your profit per hour will be the least amount by renting when you expense it against a single job. Leasing is a phenomenal option. Let's dive into that. I lease equipment every single year. Let me get this. I lease equipment every single year. And there's ways to lease equipment that has all of the benefits of renting with none of the detriment of buying. Okay, so let's get into this a little bit more. Leasing equipment is a longerterm rental, so to speak. A lot of times for snow plowing, I'll rent a loader for the entire season. And although there's some risk associated with it, I know that I have to pay for this thing for 6 months. The lack of risk is I don't have to pay for this thing for the entirety of the life of that piece of equipment. So although I'll pay more to use that piece of equipment for 6 months, I'll pay less than what as if I had to own that piece of equipment and purchase it outright. Plus with leasing, everything is taxdeductible. 100% of your payments are taxdeductible. And a lot of times when you lease it the right way, the maintenance on that piece of equipment is also not on your books as well as renting. You don't have to do any of the maintenance on when you're renting a piece of equipment. That's on the rental shop. But you can also do that with leasing. Now, here's the thing. You can lease to own. And this is a beautiful option for guys that want to take it to the next level. They know they got that piece of equipment, but they don't want to finance it. Or maybe they can't finance it. So, they'll lease to own. And a lease to own, the benefit of that is 100% of all of your payments for that piece of equipment will be taxdeductible, but the maintenance typically on a lease to own will fall on you. So, it's kind of like that hybrid between owning and renting your leasing. And that lease structure can actually differ for how you want to acquire that piece of equipment. If you're just going to lease, like I have loaders that I do nothing but lease. I know I'm never going to own. I'm right now I'm leasing a loader from um Universal Truck Sales out of I think it's Rosemont, Minnesota. My big Hyundai loader. I've leased it for two years now and I love it. I have all the benefits of of being able to use that loader, but I am risking that if we don't have snow like we haven't had this year, well, I may not be getting my I may not be compensating for the payments that I'm making for the lease versus what I'm able to bring in in income. So, there is that associated risk and I'm stuck with it for 6 months. I can't get out of that lease for six months. And a lot of times a lease will be for a year, what have you. Now, buying equipment for free is absolutely possible. And I need you guys, we're going into the buying section of this video now. I need you guys to think about it this way. Equipment dealers make money by buying equipment. And there's zero reason why you can't make money by buying equipment. And I'm not talking about m I'm talking about buying a piece of equipment for the right price and then being able to use that piece of equipment and then being able to sell that piece of equipment and recoup 100% of the initial expense it cost you to buy that piece of equipment. I've done it. I've absolutely done it. And here's where things get really interesting. I interviewed a guy in a podcast. I don't remember his name, but I remember his message. And this was the one I talked about earlier in the video where the podcast should have lasted 30 minutes, but I went an hour. And the reason I went an hour is simply because this guy's knowledge was so dialed in on the right way to buy equipment that it absolutely made 100% sense. And since that point, all of the equipment I bought, I've utilized his principles. And I'm going to boil down everything that he told me in one hour into just a few very pertinent impactful minutes. When you buy a piece of equipment, you want to buy it with the end goal of selling it in mind. So you buy it thinking you're going to sell it. Okay? And when you do that, you want that piece of equipment to be absolutely as stock as possible. You don't want this to be a custom piece of equipment. And here's why. Because when you customize that piece of equipment, you're making it specialized for your particular needs or your particular taste, which may not be universal. You want that piece of equipment to be universally accepted across the board so you can have the easiest way to get out of that piece of equipment as possible. I bought a backhole loader on auction for 20 grand and I sold that backhole loader seven years later for the same price I bought it and then I did it again. I bought another loader and I sold it for more more than what I purchased it for. Now that does not mean that the maintenance and upkeep of that machine is free. It means that the acquisition cost of that machine cost me nothing. And like a dealer who buys equipment low, sells it higher, and makes a profit in between, I did that exact same thing, but over the course of years, and during that time, I was able to profit again exponentially off that piece of equipment by utilizing it in my business and making it make a living for me. Now, I did have upkeep on that equipment, but I was able to expense the profits from that work of that equipment towards the maintenance and upkeep of that equipment. So, I'm just analyzing the acquisition cost and the sale cost. And one of the absolute key fundamental things you want to do is to keep the equipment absolutely as stock as possible, but as high-end as possible. Here's where it gets really if you're you really want to dial this in. You want this piece of equipment to be a premium piece of equipment because typically a premium piece of stock equipment will sell at a premium price. This is where you need to understand the difference. Do not let's go let's use a truck for example. Buy the highest end truck package you can at the lowest possible price you can and then change nothing about that truck as soon as you put 37in tires on it with to 24in rims and you put a 6-in lift kit in it and you've done all of this stuff like we do with our truck builds, you're actually making the eventual resale value of that piece of equipment go down in a universal model because You're you may be making something that is amazing and awesome to the right person, but you have to find that right person. That doesn't mean that right person's going to be around the corner. And you want that person to be readily available. So as soon as you want to put that piece of equipment up for sale, you can sell it and recover as much expense as you as possible out of that piece of equipment. And typically that means buying a premium stock piece of equipment, keeping it premium stock without modifying it to specifically to your tastes or to your needs and then being able to sell that at a premium price. Now, every piece of equipment is going to have some discrepancies to it. So, utilize this with a grain of salt. But universally, these principles absolutely apply whether it's loaders, trucks, skid steers, or anything like that. So, here's example of how I screwed up. I bought a loader, a Bobcat 250, got a good price on it, and then I wanted to try something different. So, I rholined the entire loader from top to bottom. It cost me four grand. Now, I've got this amazing protection over the course of this over the entirety of this machine. But now, when I want to try to sell that, people are going to look at that loader and go, "What? What? What?" Do you see how that is a screw up? Although the machine is protected because it's completely Rhino lined all the way around, it's not going to fit most people's needs. And that is a screw up that I made before I watched that vid or before I interviewed that guest. If I could go backwards in time, I would never do that unless it specifically helped me accomplish a job or that I could pay compensate myself for directly in some way, shape, or form. My best course of action is to keep that skid loader 100% stock and 100% mint as possible. That's the strategy to get equipment for as close to free as you possibly can. Buy it premium, buy it stock, keep it premium, keep it stock. Do not modify it. It allows you to keep the resale value as high as possible for as long as possible to appeal to a wide of an audience as possible. Those are the secrets that I've learned after 35 years of being a contractor and interviewing hundreds of people. And I hope some of this stuff has struck a chord with you. I get it. This is not a flashy video. And I don't care. I want to knowledge dump into you guys. I want to give into you guys what originally got me started onto this channel. And that's helping you become better versions of yourself no matter what. Because a rising tide raises all ships, you guys. And what I've learned from other contractors in the field and other people operating their companies can apply to myself, which I've used successfully, and you guys can do the exact same thing. So, I don't know if you guys like a video like this or not. I hope you do. I hope it helps some of you guys. It's not going to be for everyone, and that's perfectly fine, but it's going to be for those guys that want to take it to the next level. So, make sure you save this because we just dumped tons of years of experience into your brain as fast as we possibly could. Now, if there's anything else you want me to explore, let me know. I've been doing this for a bit, and I've had the opportunity to interview hundreds of people, go behind the scenes in their companies, live inside of their companies, like legitimately sleep in the businesses. I've done it. It's a phenomenal opportunity that the good Lord has blessed me with. And I don't think he blessed me with that opportunity for me to keep it to myself. I believe that he wants me to share this with you guys cuz if this can help you, then we've accomplished what I wanted to pull off in this video. And I hope it has. I love each and every one of you guys. I hope for the best for each and every one of you guys. And I hope whatever happens, wherever you go with your business, the good Lord blesses you. It he shines upon you. And I hope that you learn to enjoy the process and enjoy the struggle because through the fire, we become better versions of ourselves. If everything is easy, then nothing will we will never gain anything out of it. It's only when we face those trials and hardships do we form the calluses on our hands which gives us the knowledge to face a bigger challenge down the road. And when those challenges come as our businesses grow, we use our past experiences to tackle future problems. So never look on a problem like it's a bad thing. I've never had a single bad thing happen in my entire life. I've just had a lot of amazing le learning lessons that came the hard way that helped me become a better version of myself. And when I can become a better version of myself, I can help everybody become a better version of themselves by not keeping it to myself. And I don't want to do that to you guys. I want you guys to learn everything that I've ever learned. And I hope you guys just pass it along upstream. That's it for this one. God bless and go get them you guys. Hard lessons learned make for valuable lessons down the road. See you on the next one.