Buying an excavator with resale in mind

[MickeyDBC]

I have an ancient Kubota 25 horse mini ex (presently down because I need to replace all of the lines and seals) but our dirt/clay turns to concrete in the summer and you can't get it out of the bucket when it is wet. Thought about getting a used 100ish HP excavator but maintenance and repairs on those is about as bad as a dozer plus they suck at moving dirt farther than they can reach. I know that everything used breaks and no way I am putting $150K into a new one so I bought a 27 year old cleanish backhoe for a lot less than a clapped out mini-ex. More awkward than a mini but it carries a yard plus in the bucket and will dig unlike a tractor, and at 90 hp it has real power on the boom. Big thing that sold me is that they are not much different than tractors to work on so I can keep it going myself (rebuilding the bucket curl cylinder this weekend actually). And like a tractor I can road it 4 miles to the gas station for diesel one less to fill with 5 gallon cans. If you are not in a giant hurry on your projects and want simpler maintenance look at a backhoe. Much cheaper and does more stuff but just not as fast.

 

[MMrbeef]

A friend sent me this thread and I can directly comment on the homeowner and excavator topic. I rented E35’s for several years (took a week off work each July to do house projects) before deciding to buy my own. Estimates from various companies told me I had somewhere between 30-50k of excavation work to do. Chased after numerous nice used units for 3 years. In early 2023 I decided to just go for it and walked into Bobcat and ordered a new E50. At the time it was cheaper than buying a 200 hr E50 at auction. Machine arrived in March/April of 2023. Took out some trees, did a couple small projects, then in June 2023 a house that was one of the few we would move for came on the market. We moved negating the need for an excavator. Still happy with my purchase and numbers wise it would have worked out fine but life happens. Total ownership cost would have been in the ~15k range. Plan was to sell in 3-5 years with 300-500 hrs. Instead I hauled it to the Bobcat dealer on Tuesday for a consignment sale with 114hrs on it. I’d say check it out if you were closer, should be posted on Bobcat of Brookings (SD) later this week or next week. Couple things I learned and would suggest:
1) You need experience! Before buying my E50 I already had several hundred hours running minis. Getting decent isn’t hard but getting those fine movements down takes more time than you thing. You should double anytime you think something will take.
2) Insurance, each state is difference but I would suggest speaking to your agent about ways to insure the machine for both machine damage and machine liability.
3) Despite being minis they take up room. We have that pesky winter thing here in SD. One of the reasons I’m selling it is I can’t stand for nice stuff to sit outside in the summer and certainly not in the winter, it takes up a huge amount of real estate in my storage shed.

Dollar wise if you use them for the hours you expect the cost isn’t terrible buying a new or close to new unit. I built lots of spreadsheet sheets analyzing costs, depreciation, and resale. If we hadn’t moved it would have been a great deal.

 

[mike69440]

I have so many projects in mind for the next 3-ish years (landscaping, retaining walls/terracing gardens, digging up boulders in the fields, root cellar, trenching for utilities for a few projects, etc) so I'm looking into buying an excavator. The rental options near me are very limited, and I have a long trailer-unfriendly driveway, so just getting an excavator here and back would take up a rental day (plus, the few rentals within an hour drive are 3-ton). Contractors are usually scheduled pretty far out too, and I don't want to wait around to get stuff backfilled so I can move on to the next project. I'm pretty well set on something between 5 and 8 tons. My biggest concern is usability in my rocky soil, so I ran it by a contractor who's had 304, 308 and 312 machines out at my place for various jobs. He thinks even a 4-ton would be fine for most of it, but moving some of the heavier boulders wouldn't be possible on the small end. I'm certainly not going smaller than 4-ton.

I've spent quite a bit of time perusing machinery trader and FB marketplace. Lots of options out there:

• $35-45k for 3500-5000 hour name-brand (Cat/Deere/Kubota/etc) machines usually from the kinda-shady used equipment dealers/lots. I always gotta wonder about the history of these sorts of things. I get especially nervous when they're also selling gray-market machines (and not listed as gray-market, but it's a model number that was never sold in the US). As an example, $35k for a 5000-hour 2006 Kubota KX161-3 that's clearly had a hard life, and despite a new engine needs attention elsewhere.
• $45-55k for nicer off-brand machines that are going to be harder to get service, especially where I live. For example, $45k for a 5000-hour 2014 Hyundai Robex 80cr-9 that looks to be well-maintained (two owner), has a new-ish track, etc.
• $55k+ for low-hour name-brand machines. For example, $65k for a nice-looking 500-hour 2019 Cat 305E2 CR with a few buckets.

I don't want to keep the excavator forever (more precisely, my wife doesn't want me to keep it forever), and I expect I might put a couple hundred hours on it in a few years. Resale after that time is top-of-mind. I'm willing to spend the money to get a nice machine, and the conventional wisdom is that a name-brand excavator holds value well, but then I'm worried about finding a buyer who can purchase it without financing or perhaps taking a bath on resale if the economy tanks. And the more I spend, the more exposed to the possibility that I way overpay due to my lack of knowledge about excavators. I'm also not opposed to getting an older machine that's a bit sloppier around the corners and harder to work with, but still digs holes faster than a shovel, but then I'm worried about all the issues with high-hour machines. Any nuggets of wisdom? My gut instinct is to get a beater and embrace the adventure. Should I get over my fear of investing in a newer machine? I know so little about excavators (how difficult major repairs are, how often they need major repairs) that I'm having trouble evaluating the value proposition.

And I recognize there's a non-zero probability that I'll fall in love and never sell it.

If you can swing it get a +5 tonne machine with some life left in it. Have it independently evaluated. I take it you will not be trailering it? Then go as large as you can get. Steel tracks are nice. Hydraulic thumb and blade also.

 

[Hay Dude]

It sounds like our OP really is a very good candidate for a JD-35/50/70 class machine. (or other make)

This is a big investment; so cost out multiple options; spec the way you want. Look at month cost lease vs purchase. Warranty, service, parts, whole package.

Do realize even a small (midi I've seen it called) hoe is in for a rough day with trees/stumps/boulders. They make a 2 part chemical injection to crack big rocks. It's not fast, with the drilling and all. Consider working around the biggest stumps/rocks. Sometimes its better to build a grade up to go over a rock than remove the rock.

Then think, will a JD-35 do 80% or so of what you want. Not 100%. Maybe you rent, hire, or dont do the 20%. Maybe a 50 class is better? This is a big investment, and make sure it is well thought out.

I'm not against a hydralic thumb on a small machine; but it often makes me think; does this guy know the limitations of a 3.5T or 5 T machine. Putting a thumb on a JD-50 doesn't turn it into heavy land clearing equipment.

Amazing isn’t it? You have a rock sticking up 8” in a field. The other 99% is under the ground and weighs like 5+ tons.

 

[M59]

Amazing isn’t it? You have a rock sticking up 8” in a field. The other 99% is under the ground and weighs like 5+ tons.

View attachment 3708349

It is amazing how a little nub sticking out of the grows manages to grow so big. Was tidying up lawn by removing rocks so I didn't hit them while mowing. Ran the M59's hoe out to full extension, 12 feet, and started lifting. Rock wasn't moving. Ran up the engine rpm and tried again. Now I'm lifting the M59's back wheel off the ground with the rock slab that was 99% buried.

Will have another go at it now that I have the KX80. Always need good rock to shingle the creek bank with to manage erosion.

Buying equipment is fun but scope creep always sets in and you want something with more grunt and capacity.

 

[Merck]

I have so many projects in mind for the next 3-ish years (landscaping, retaining walls/terracing gardens, digging up boulders in the fields, root cellar, trenching for utilities for a few projects, etc) so I'm looking into buying an excavator. The rental options near me are very limited, and I have a long trailer-unfriendly driveway, so just getting an excavator here and back would take up a rental day (plus, the few rentals within an hour drive are 3-ton). Contractors are usually scheduled pretty far out too, and I don't want to wait around to get stuff backfilled so I can move on to the next project. I'm pretty well set on something between 5 and 8 tons. My biggest concern is usability in my rocky soil, so I ran it by a contractor who's had 304, 308 and 312 machines out at my place for various jobs. He thinks even a 4-ton would be fine for most of it, but moving some of the heavier boulders wouldn't be possible on the small end. I'm certainly not going smaller than 4-ton.

I've spent quite a bit of time perusing machinery trader and FB marketplace. Lots of options out there:

• $35-45k for 3500-5000 hour name-brand (Cat/Deere/Kubota/etc) machines usually from the kinda-shady used equipment dealers/lots. I always gotta wonder about the history of these sorts of things. I get especially nervous when they're also selling gray-market machines (and not listed as gray-market, but it's a model number that was never sold in the US). As an example, $35k for a 5000-hour 2006 Kubota KX161-3 that's clearly had a hard life, and despite a new engine needs attention elsewhere.
• $45-55k for nicer off-brand machines that are going to be harder to get service, especially where I live. For example, $45k for a 5000-hour 2014 Hyundai Robex 80cr-9 that looks to be well-maintained (two owner), has a new-ish track, etc.
• $55k+ for low-hour name-brand machines. For example, $65k for a nice-looking 500-hour 2019 Cat 305E2 CR with a few buckets.

I don't want to keep the excavator forever (more precisely, my wife doesn't want me to keep it forever), and I expect I might put a couple hundred hours on it in a few years. Resale after that time is top-of-mind. I'm willing to spend the money to get a nice machine, and the conventional wisdom is that a name-brand excavator holds value well, but then I'm worried about finding a buyer who can purchase it without financing or perhaps taking a bath on resale if the economy tanks. And the more I spend, the more exposed to the possibility that I way overpay due to my lack of knowledge about excavators. I'm also not opposed to getting an older machine that's a bit sloppier around the corners and harder to work with, but still digs holes faster than a shovel, but then I'm worried about all the issues with high-hour machines. Any nuggets of wisdom? My gut instinct is to get a beater and embrace the adventure. Should I get over my fear of investing in a newer machine? I know so little about excavators (how difficult major repairs are, how often they need major repairs) that I'm having trouble evaluating the value proposition.

And I recognize there's a non-zero probability that I'll fall in love and never sell it.

Unless you find one that has been owned and used by the owner I would never buy used. They are just like trucks the people who work for the owner don't care and beat them to death.

 

[MarkFromWA]

One thing that I have left out of the conversation; as many others do... OP, are you any good on a hoe? If you have never ran one, its very simple, and intuitive, But, a guy that has 10,000 hours on one, will get more done in 2 days then you will in 2 weeks. The flip side, many of the small owner operators aren't really very good either. They watch Dirtperfect too much, and get a business loan, and charge you to learn how to do the job.

Hiring out is not cheap, but depending on skill, time, finances, its not always a bad choice. Thing is, $40,000 worth of budget just doesn't go far in earth moving. I would expect a small contractor, who is pretty decent, maybe with a helper (or not), to be roughly $2000-2500/day.

On used equipment, fiancing can be hard/expensive; eating up the cost savings pretty fast. Banks dont like used equipment loans, and charge a premium for them. If it comes down to fiancing a 1200 hour CAT-305 for $50,000 @ 12%; vs a new Sany for $72,000 @ 5%; I'm pretty sure I'd go Sany (or Takekuchyi, or Case).

I've never run one in my life. But I'm willing to spend the time to learn. I've hired lots of excavation jobs out previously, including a big one last year (312, 650J and a vibratory compactor for 2 days) that was $10k. Totally worth it: those were guys who knew what they were doing. I thought it'd take closer to a week. If you're curious you can look up my driveway threads, but trailering big machines up my driveway isn't really possible. Someone did once trailer a T320 with a mulcher, but most wouldn't attempt that. So, in addition to the work, I'm paying for an hour or two of them driving the excavator up my driveway. Same problem with a rental--if I rent for a week, 2 days of the 5 days are going to be mostly spent getting it here and getting it back. All that to say: if it takes me a little longer in the seat, I'm okay with that.

 

[MarkFromWA]

Unless you find one that has been owned and used by the owner I would never buy used. They are just like trucks the people who work for the owner don't care and beat them to death.

Yep, that's what I'm ideally looking for. I've had good luck buying used trucks private-party from original owners.

 

[Hay Dude]

Unless you find one that has been owned and used by the owner I would never buy used. They are just like trucks the people who work for the owner don't care and beat them to death.

I could dispute that. I own at least 15 pieces of equipment. At least 10 of them were well used. If you know what you’re looking for and you are good at looking at the proper areas, you can get excellent deals on very worthy equipment, even company or rental equipment.
Sure, I have been burned here and there, but not everyone can afford new. I know I can’t.
If it weren’t for used equipment, I wouldn’t be in business.

 

[blacktruck]

I could dispute that. I own at least 15 pieces of equipment. At least 10 of them were well used. If you know what you’re looking for and you are good at looking at the proper areas, you can get excellent deals on very worthy equipment, even company or rental equipment.
Sure, I have been burned here and there, but not everyone can afford new. I know I can’t.
If it weren’t for used equipment, I wouldn’t be in business.

Yep, what he said @Hay Dude .
Buying used equipment is always about doing your due diligence. Like others here I'm sure, I have bought new and used equipment. Buying used just means you have to look at the equipment closer to check for wear or damages. If you are looking to buy for resale, realistically you are looking for a machine with wear or slight damages to repair and flip it. Due diligence and knowing your market is important.