Fee or a piece, on a submetering program across nine parks?

Separate the two decisions. Whether to do the work at a fair margin is one question. Whether to take equity in someone else's value creation is a different business you'd be entering.

The thing I'd worry about at your size is client concentration. A $1.5M program is probably a year or more of your capacity. If you staff up for it and they slow-pay or phase it down after park three, you've got crews and no other work. I built a crew around one client in 2022 and spent the following winter unwinding it. Ask for the phasing schedule park by park with dates and payment terms before you hire anyone.

Cost plus 18 on a program like this is you pricing labor when the value is in the engineering. Split the scope into three contracts at three prices. A paid assessment and leak survey per park at a flat fee. The construction at cost plus, where 18 is defensible. And a program management fee, monthly, for running the sequencing, the meter data, and the reconciliation. That third one is where you should be making real money and it's recurring.

The participation is a different conversation and I'd hold it until you've delivered park one on time.

Watch out for the wells. If any of the nine are on their own well and treatment rather than a municipal master meter, submetering doesn't reduce a bill because there is no bill, it reduces power and chemical cost and it lets them bill residents. Those are different economics and the recovery is smaller per lot.

Same with septic and lagoon systems. I looked at a rural park last year where the fix was the drainfield, and no amount of metering was going to help that. Ask them which parks are municipal in and municipal out, and which are private on either end. Your $70 average is probably hiding two very different sets of parks.

Three states with nine sites means travel, per diem, and licensing overhead that eats a cost plus 18 alive. My crews cost me roughly a third more on out-of-region work once I count windshield time, lodging, and the productivity loss from unfamiliar suppliers.

If you quote 18 flat across the portfolio you'll make money on the closest two parks and lose it on the far ones. Price per park with a mobilization line, or set your fee at cost plus with the region loading built into the cost basis and show them the buildup so it doesn't look like padding.

What does the billing system and the person running it actually cost annually? You listed it as an afterthought and it comes straight off their $538k.

On licensing, plumbing and utility contractor requirements are state by state and some are local on top of that, including whether your out-of-state license reciprocates. Working on a community water system can require an operator certification held by a specific person in some states. Worth confirming with each state board in writing before you quote, because if you need to sub to a locally licensed outfit in two of the three states your margin structure changes.

Payback on their side is $1.5M against $538k a year, so under three years, which is why they're excited. Their $8M value number assumes the full $28 recovery holds and that the cap rate is still 6.5 at exit.

What their number leaves out is resident behavior. Once people pay for their own water, consumption drops, which is good for the bill and means the recovery per lot is lower than the modeled leak volume implies. Their $42 baseline probably falls to the mid 30s. So the $538k is maybe $430k to $480k. Still a fast payback.

On the participation, the reason I'd be cautious is that you'd be taking risk on their rent conversion, their collections, and their hold period, none of which you control. @lantern's program management fee gives you recurring upside without owning their execution risk.

The ongoing billing service is the part I'd chase. Reading meters, generating statements, handling disputes, and reconciling against the master meter across 1,600 lots is a monthly revenue line, and once you've installed the system you're the obvious vendor for it.

Does the operator want to run that in house, or are they hoping you will? That answer decides how big this actually is for you.

Managing the resident side of this is where it goes wrong. The month the first submetered bill lands, every office in all nine parks gets calls, and if the lot rent didn't come down by the amount you're now billing separately, residents read it as a rent increase and they're not wrong about their total housing cost.

What's worked where I've done it: written notice well ahead, a shadow billing period of two or three months where residents get a statement showing what they would have paid, a documented lot rent adjustment at conversion, and a leak amnesty so the guy with a running toilet isn't handed a $200 bill in month one. Also fix the leaks before you bill, not after, or you'll be charging residents for your infrastructure.

Build the shadow period into your schedule, @solder. It adds a couple months per park and it's the difference between a clean conversion and a resident association forming.