Looking for some insight on purchasing and running a ground route

instiches

Well-Known Member
I don't know your history, but I would bet you have been around a while and either got your routes free or cheap. This is an awful investment now. You need to find a real fool to buy these things for the money being asked for. Much better options out there.

So what fantastic "independent" business are you running?
 

FedGT

Well-Known Member
So what fantastic "independent" business are you running?
The DSVFF. It's a small non funded operation that brings light to dark corporate underbellys. The disgruntled single van freedom fighters is positioned to grow leaps and bounds. At the moment it is one guy and a dell.
 

dmac1

Well-Known Member
There are much better investments.

Residential multi-unit properties are a much safer and better investment requiring less work. As long as you buy a property where the rent covers the costs, you can't lose. Eventually, you own the entire asset, and still have income, without having to worry about hiring people, equipment breakdowns, Christmas rush, etc, etc, etc.

No one can come in and cancel your ownership on the whim of some 25 yr old 'manager' who doesn't have a clue. That can and has happened with fedex route owners. Some have sued and won after being 'fired' from their own business, many more have lost their entire investment.

In a multi-unit property, even if the property value goes down, other people are paying for the property. Try to find a bank that will give you a loan to buy a fedex route based on the value. You will need to pay cash, borrow against other assets putting them at risk, or get owner financing. And when you sell, you will not see the profit from a route sale like you would in a real estate sale. You will get your 'profit' back in dribs and drabs. You can buy rental properties using leverage, with the amount you may spend on a Fedex 'business' buying real estate with other people paying for it.

With real estate, you can even borrow against your first property to buy another, and another. Try that with a fedex route.
 

FedGT

Well-Known Member
There are much better investments.

Residential multi-unit properties are a much safer and better investment requiring less work. As long as you buy a property where the rent covers the costs, you can't lose. Eventually, you own the entire asset, and still have income, without having to worry about hiring people, equipment breakdowns, Christmas rush, etc, etc, etc.

No one can come in and cancel your ownership on the whim of some 25 yr old 'manager' who doesn't have a clue. That can and has happened with fedex route owners. Some have sued and won after being 'fired' from their own business, many more have lost their entire investment.

In a multi-unit property, even if the property value goes down, other people are paying for the property. Try to find a bank that will give you a loan to buy a fedex route based on the value. You will need to pay cash, borrow against other assets putting them at risk, or get owner financing. And when you sell, you will not see the profit from a route sale like you would in a real estate sale. You will get your 'profit' back in dribs and drabs. You can buy rental properties using leverage, with the amount you may spend on a Fedex 'business' buying real estate with other people paying for it.

With real estate, you can even borrow against your first property to buy another, and another. Try that with a fedex route.

No it is not! Real estate investment is for people that have a lot of money to diversify. You are banking on appreciation not liveable income. Anyone that suggests rental income as a great investment does not have any business in discussing these topics way too far out of date. What you suggest is rents that pay for the loan, that can happen problem is most don't account for the age of the home, the maintenance (all out of pocket from your day job which adds up a ton when you rents are only possibly cash flowing the loan), property taxes, income taxes, vacancy- will happen. So basically if you want to drop $500,000-$2,000,000+ In a loan and have no ROI for 20-30 years you better be content working that day job cause you are not going to be making any money on that and heaven help you when we hit another recession. Now you can run the numbers on no loan- $600,000 for a run down 4 plex, rent at $1,500 a month best case scenario gross $72,000 a year, plan for taxes, vacancies, evictions, maintenance and you may clear $35,000-41,000 a year (7ish% ROI). May get your money back in 15-20 years.

I give you that it is classified for the most part a safe investment but I guarantee you that for every contractor that has "lost a route" (which is due to their own incompetence) there has been 10,000 people who have lost their a@& in real estate 80's, mid 90's, 2007-2010. Rental market is so over built right now that you are competing with that it is by no means a sure thing.

In your last post you reference leveraging home on home on home. Banks will not do that anymore and if you are dumb enough to after what history shows us, you deserve what you get from it.

SBA loans will loan on FedeRx routes so I don't know where that information comes from, relatively dated info again.
 
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dmac1

Well-Known Member
No it is not! Real estate investment is for people that have a lot of money to diversify. You are banking on appreciation not liveable income. Anyone that suggests rental income as a great investment does not have any business in discussing these topics way too far out of date. What you suggest is rents that pay for the loan, that can happen problem is most don't account for the age of the home, the maintenance (all out of pocket from your day job which adds up a ton when you rents are only possibly cash flowing the loan), property taxes, income taxes, vacancy- will happen. So basically if you want to drop $500,000-$2,000,000+ In a loan and have no ROI for 20-30 years you better be content working that day job cause you are not going to be making any money on that and heaven help you when we hit another recession. Now you can run the numbers on no loan- $600,000 for a run down 4 plex, rent at $1,500 a month best case scenario gross $72,000 a year, plan for taxes, vacancies, evictions, maintenance and you may clear $35,000-41,000 a year (7ish% ROI). May get your money back in 15-20 years.

I give you that it is classified for the most part a safe investment but I guarantee you that for every contractor that has "lost a route" (which is due to their own incompetence) there has been 10,000 people who have lost their a@& in real estate 80's, mid 90's, 2007-2010. Rental market is so over built right now that you are competing with that it is by no means a sure thing.

In your last post you reference leveraging home on home on home. Banks will not do that anymore and if you are dumb enough to after what history shows us, you deserve what you get from it.

SBA loans will loan on FedeRx routes so I don't know where that information comes from, relatively dated info again.


Real estate is much cheaper. Did you even read my post before going on your rant???? I stated that if rents pay the costs, you have other people buying appreciable assets for you. I said costs- those costs include maintenance, taxes, vacancies, etc. And Of course you stupidly assume that borrowing afgainst an asset isn't done by banks for some reason. If you have a property that has appreciated, and is still paying for itself, and you have also built up equity from loan payments, of course you can refi, pull the cash, and purchase another property. And it doesn't take hundreds of thousands of dollars. That is just ignorance. 30% down is enough, and you can do it with less.

And you may be uninformed about rental property and the housing bubble. Rents didn't decline, and vacancy rates for multi-unit properties went down. In fact, the vacancy rate was down so that apartment building recovered well before single family homes.

I have had rental properties since the early 80s, and they are both easier and less time consuming than fedex. The first was a rehab needing duplex that I got at a good price. Did the rehab, had positive cash flow, borrowed against the equity a couple years later,, still had positive cash flow. and purchased a 6-plex. Did some deferred maintenance, raised the rents, the rent from 2 units would cover the costs after about 4 years, had positive cash flow from 1986 through 2012 when I sold and retired. In the meantime, with money borrowed against equity, I bought and developed a single family home on a lot zoned for multifamily, and built three more units. Sold those, and moved to sunny California to retire. Long term, real estate is a much better investment that fedex could ever be. Ask Donald Trump.

I'd like to see the terms of any SBA loan that was secured only by the value of the contract. Maybe they'll loan based on value of vehicles, or you can pledge your 401k.

This took no special education or training, just some common sense and some due diligence.
 

bbsam

Moderator
Staff member
So taking two steps back, both Fedex Ground and real estate can be good investments or can be overpriced nightmares.

Keyword: investment.

NOTHING IS GUARANTEED
 

Bounty

Well-Known Member
So taking two steps back, both Fedex Ground and real estate can be good investments or can be overpriced nightmares.

Keyword: investment.

NOTHING IS GUARANTEED
One, you own the other your told what to do and how to do it. I'll let you guess which is which.
 

Bounty

Well-Known Member
really? owning rental property you just "do what you want how you want"?
Yes, I can hire who I want. I make the decisions on what is the best way to do updates. As long as it's within the laws. The only thing I can't do is audit the contractors that I hire employees.
 

STFXG

Well-Known Member
Yes, I can hire who I want. I make the decisions on what is the best way to do updates. As long as it's within the laws. The only thing I can't do is audit the contractors that I hire employees.
With guaranteed income... Right?
 

Bounty

Well-Known Member
With guaranteed income... Right?
I haven't lost yet, but it's always a possibility. You are guaranteed nothing either except the term of your contract unless X changes its mind on that. Feeling they will soon. Check what independent means In the dictionary it may clear it up for you.
 

bbsam

Moderator
Staff member
Yes, I can hire who I want. I make the decisions on what is the best way to do updates. As long as it's within the laws. The only thing I can't do is audit the contractors that I hire employees.
And why do you think X does what it does? Only to ensure compliance with the law.
 

bbsam

Moderator
Staff member
Patches on uniforms
Stickers on trucks
Auditing payroll
Doesn't sound like ensuring compliance wth the law. sounds like control!!
Get paid for stickers and patches. "Auditing" payroll is far less than you make it out to be.
 

bbsam

Moderator
Staff member
By the way your not getting paid for it when you have to buy their uniforms. They tell you that and you believe it....so gullible
Actually we are. Tried to get out of "Brand Promotion" and they said "Ok" but I couldn't get them to add the $7600 elsewhere.

Maybe you don't really know what you're talking about.
 

Bounty

Well-Known Member
Actually we are. Tried to get out of "Brand Promotion" and they said "Ok" but I couldn't get them to add the $7600 elsewhere.

Maybe you don't really know what you're talking about.
Did you negotiate the audit. No you did not because you can't.
 
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