Capital Crisis - REO Property Preservation Forum
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post #1 of 16 (permalink) Old 02-01-2014, 10:29 PM Thread Starter
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Capital Crisis

Hi to everyone and thanks for all the info.

Im fairly new to the industry and doing well with work. I started doing this due to being tired of making assholes rich and them treating me like ****. but anyway...

Im low on capital and not so good credit. Is there anyway that I can get working capital for my business besides a credit card or loan? thanks in advance for any advice.

ps. Im having this issue due to the 30-45 day wait on invoices. I currently have 5k worth of work that I have no idea how Im gonna get them done. (trash outs, pool removals ect.)
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post #2 of 16 (permalink) Old 02-02-2014, 01:08 AM
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Sounds like you shouldnt be in business for yourself... Maybe the rich as**s werent so rich after all and were just grumpy? The P&P "business" requires approx 3-6 months of capital. This capital of yours is used to make your National or Regional Rich As**s. Like Mr BPWY states about how to become a millionaire in the P&P business....start with 2mm.

Otherwise borrow (and lose) from your family...pick the ones you dont like that well tho....
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post #3 of 16 (permalink) Old 02-02-2014, 06:52 AM
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Already knowing how banks would look at a business loan app for this type of industry, I would not borrow a nickle to keep it above water. When you realize working for nationals and regionals that you are at times working for pennies on the dollar of what you should be getting, you'll see there are still some rich arses bleeding you.
Not what you probably want to hear, but you need to scale your business to clients that can pay your invoices quicker so you can keep your wheels turning. Your better off making $100 now than possibly $150 six months from now.
Preservation jobs should be supported with cash capitol only.
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post #4 of 16 (permalink) Old 02-02-2014, 07:13 AM
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There is more work than there is money to pay for it. What happens when you borrow money to do this work and either don't get paid or get charged back?

My advice is quit before you end up doing an eviction at your own house.
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post #5 of 16 (permalink) Old 02-02-2014, 11:06 AM
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Sounds like you're trying to grow too big, too fast. The first 30-45 days were tough for us, but we started small and with companies that paid quickly. Later, when the checks started coming, we were able to add more clients and grow a little. Right now we work for 6 clients, 3 that pay every 2 weeks (but are on a 30 - 45 day delay of payment), 2 that pay once monthly (but always on time and usually always right), and 1 that we're in the process of cutting ties with. They're a national that pay if & when they feel like it and I'm sick of dealing with them.

If you have to take out a loan to support your business, that should be a red flag that maybe this isn't the business for you. Not what you want to hear I'm sure, but P&P is far from quick, easy money. Better to cut & run now before you get further in and more in debt.
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post #6 of 16 (permalink) Old 02-03-2014, 01:02 PM
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Originally Posted by ej on the go View Post
Hi to everyone and thanks for all the info.

Im fairly new to the industry and doing well with work. I started doing this due to being tired of making assholes rich and them treating me like ****. but anyway...

Im low on capital and not so good credit. Is there anyway that I can get working capital for my business besides a credit card or loan? thanks in advance for any advice.

ps. Im having this issue due to the 30-45 day wait on invoices. I currently have 5k worth of work that I have no idea how Im gonna get them done. (trash outs, pool removals ect.)

The WORST thing in the world you could do would take out a loan to keep going in this biz. You will end up broke and in debt I promise. Best way to do it, is to reject the orders that you cant get done right now and hope a check comes in soon. Dont be afraid to reject work you cant cover costs for. Too many people think " if i reject an order they will stop sending me work" No! you are but a number to them. Best to have little to no work than no work and be in debt.
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post #7 of 16 (permalink) Old 02-03-2014, 06:02 PM
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NEVER,NEVER,NEVER take out a loan to stay afloat in this business you will regret it and it is the first step on the road to bankruptcy. Refuse the work if you can't complete it at a profit you will be much better off in the long run.
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post #8 of 16 (permalink) Old 02-03-2014, 06:58 PM
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Originally Posted by westcoast Man View Post
The WORST thing in the world you could do would take out a loan to keep going in this biz. You will end up broke and in debt I promise. Best way to do it, is to reject the orders that you cant get done right now and hope a check comes in soon. Dont be afraid to reject work you cant cover costs for. Too many people think " if i reject an order they will stop sending me work" No! you are but a number to them. Best to have little to no work than no work and be in debt.
Some good advise here. take it. only do what you can and no more until you get money coming in.

If you do good timely work they will be back asking you to do more.
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post #9 of 16 (permalink) Old 02-06-2014, 09:14 PM Thread Starter
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Thank you for all the replies and straight forward advise.

I ran into a guy 25+ years in the industry and we were talking. He told me to go fishing. I was confused. He said if your going to go bankrupt at least have some food to eat. LOL
And basically told me to go straight to the Realtor with a flyer donuts and coffee. Being my competitor he was very helpful.

Ive recently turned down work opportunities with nationals that pay initials for $300. That included grass trashout winterized and lock change. I contacted them and they were putting the pressure on my to quickly fill out paperwork to show that Im serious. I hesitated and it became a what can we do to bring you on. And basically it was the money they didnt want to give up.
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post #10 of 16 (permalink) Old 02-06-2014, 09:20 PM
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Originally Posted by ej on the go View Post
Ive recently turned down work opportunities with nationals that pay initials for $300. That included grass trashout winterized and lock change. I contacted them and they were putting the pressure on my to quickly fill out paperwork to show that Im serious. I hesitated and it became a what can we do to bring you on. And basically it was the money they didnt want to give up.
Those package deals don't pay well enough for us to leave the house. Read the other thread about $350 initials. They usually include a sales clean too, which when done properly will take at least 3 hours, and that's assuming the house was clean to begin with.
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