Common seller tricks in roofing
The classic move is to treat a storm or insurance-claim year as the new baseline, and to stay quiet about leak callbacks that will arrive after close.
- A hail, wind, or insurance boom presented as recurring residential reroof demand.
- Manufacturer certifications (and the warranties that go with them) that do not automatically transfer to a buyer.
- Heavy use of subcontract crews whose quality you cannot see in the P&L.
- Workmanship warranties that outlive the seller, with no reserve.
- Salespeople paid on signed deals that have not been built, or that may cancel.
Which numbers to verify
Ask for monthly production and a split between retail, insurance, and commercial. Compare a storm year with the years around it. Reconcile deposits and look at draw schedules on larger jobs. Count jobs sold but not started — those are work and warranty you inherit, not just backlog to celebrate. Recast owner sales commissions if the seller is the closer.
Licensing and key-person risk
Contractor licensing and, in some cities, registration and permitting bonds are required. Manufacturer programs (certain shingle or TPO lines) can be the reason the company wins work, and they often require a new application, training, or a production history you do not yet have. Confirm what can be used on day one.
Equipment and condition
Look at trailers, box trucks, hoists, and safety gear. Commercial work may depend on a crane or a particular insulator relationship. Tear-off debris and dump fees should show up in the numbers. If the ‘crew’ is mostly 1099 labor, ask about classification risk and insurance certificates.
Seasonality and the calendar
Weather is the calendar. Winter, long rains, or a quiet storm season can starve a company that just staffed up. Insurance work arrives in waves and then disappears. A close date in late fall needs a cash plan through the slow months.
Customer concentration
A public adjuster, a single insurance contractor, or one commercial property manager can dominate a year. Those sources are not a moat. Retail brand and review reputation transfer better than a storm chaser’s phone tree, but only if the reviews are real and the phone number comes with the sale.
Questions to ask before you make an offer
- Please show revenue by month and by source (retail, insurance, commercial) for three years, including the last storm cycle.
- What jobs are sold but not completed, and what workmanship warranties will I inherit?
- Which manufacturer certifications are in place, and what is required for me to keep them?
- What share of labor is W-2 versus subcontract, and may I see insurance certificates?
- How are leak callbacks handled, and what did they cost in each of the last three years?
- Is any public adjuster or contractor more than 15% of volume?
- May I review dump, materials, and job-cost records on a sample of recent roofs?
- Will the phone number, reviews, and brand transfer, and are they in the company’s name?
- Are there open complaints, lien disputes, or unfinished punch lists?
- After an LOI, may I speak with your production lead and your accountant?