Measure Every Opportunity … Always Do The Math!

I’m a systems engineer with a Masters Degree in Aeronautical Systems and an MBA. I love math! I taught as a mathematics adjunct professor for Embry-Riddle Aeronautical University when I lived in Spain. I have always subscribed to the principle of measuring every job opportunity by first doing the math.

Let’s examine the $3 mortgage inspections. Let’s do the math and compute the profit.

The large national mortgage field service firms will tell you that $3 mortgage inspections are real money-makers … lots of volume … lots of money to be made. If you work in any large metropolitan area, your working hours for inspections is going to be from 9 AM to 3PM. Traffic does not move before 9 AM or after 3 PM because of what is called rush hour. So you have about 6 hours of drive time a day. The $3 mortgage inspection does not yield $3 in profit. When you consider all of your expenses, you will be lucky if your profit is $1.50 per inspection. The $3 mortgage inspections often require as many as 7 digital photos to manage, tag and upload. Let’s suppose that you perform 5 mortgage inspections an hour (one every 12 minutes), or 30 within a 6-hour drive day. Your net income will be $45 for the day. When you add in the time that you will spend with data processing and uploading photos in the evening, you have made about $6 an hour for a day’s work.

Perform 10 mortgage inspections an hour (one every 6 minutes … maybe not that achievable), or 60 inspections in a 6-hour drive day and that will provide a net income of $90. When you add in the time that you will spend with data processing and uploading photos in the evening, you have made about $11 an hour for a day’s work. 

My analysis says that you will be earning a profit of between $6 and $11 an hour. Performing an inspection every 6 minutes seems to be difficult to achieve, so you are probably going to earn closer to $6 than to $11 an hour. If you drive only about 100 miles a day, you will drive about 26,000 miles in a year. That’s a lot of business driving. Now add your personal driving. I did not include in my calculations, the $1,200 required E&O insurance … payable in an upfront lump sum. You will make a lot less in rural areas.

The McDonald’s store manager earns about $42,000 a year. The commercial insurance loss control inspector earns about $59,000 a year (according to Simply Hiring). What are you earning as a $3 mortgage inspector?

Do the math. What numbers do you come up with? Did I make any mistakes in my analysis? When a large national mortgage field services firm asks you to perform $3 mortgage inspections, ask them to show you their analysis of how much profit you can expect to make on these inspections. They won’t do it. You have to do your own math.