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RandalatA1Sprinklers
02-06-2009, 11:51 PM
I am in the process of setting up to finance new systems. I get about 35% down, payments of around $100 to $150 a month. My security is a mortgage against the property. If I am a first or second mortgage I get 12%. If I am a third mortgage I get 15% cuz the risk is higher. This should start generating income and increase sales. My plan is to make lawn sprinklers affordable for everyone, and build myself a nice income at the same time. Customers can even finance the annual maintenance agreement for the term of the loan. Anybody ever do anything like this? Any ideas or input?

Stuttering Stan
02-06-2009, 11:55 PM
In the past, I have financed customers through JDL Finance. Haven't had any problems with them. It's been almost a year since I have done anything with them.

RandalatA1Sprinklers
02-07-2009, 12:11 AM
Did financing help your sales?

FIMCO-MEISTER
02-07-2009, 04:26 AM
Sounds doable. You are thinking. I'd still turn it over to the financing pros and just get my money. Why finance with you at 12% when they can probably get better else where. What if someone holds back payments claiming issues with service or the system? Looks like it has lawsuit potential as well. Check into JDL Financing.

EagleLandscape
02-07-2009, 07:04 AM
My thought is if someone can't afford a few thousand dollar sprinkler system, they shouldn't need one. In this economy, something like that would scare me if I was the one carrying the note. I would like JDL, or GE finance or something carry that risk.

Would you be doing credit checks, income verification, reference checks? I would think all of those would be necessary to determine if the customer is "bankable". And then by the time you have investigated what you need to, it might take 5-10 hours. About the time needed to supervise another installation...

It could increase your sales, but might kill your profits where it wouldnt be worth it. Extra time + high risk?

DanaMac
02-07-2009, 07:27 AM
Why not just accept credit cards? Just increase your rates a little to cover the CC expenses you will incur. I know you're not earning any finance charges, but at least you get your money now, and don't have to worry about them defaulting on your financing.

EagleLandscape
02-07-2009, 08:02 AM
Great idea. Most ppl that have a rate over 12/15% on a credit card tells me I wouldn't seller finance anything. My highest rates on purchases right now are like 6.9%. I'd rather do a lower rate credit card to buy a system, than to do a contractors in house deal for 12%.

DanaMac
02-07-2009, 08:07 AM
Great idea. Most ppl that have a rate over 12/15% on a credit card tells me I wouldn't seller finance anything. My highest rates on purchases right now are like 6.9%. I'd rather do a lower rate credit card to buy a system, than to do a contractors in house deal for 12%.

Right now my home equity line of credit is at 5 1/8%, which is less than my fixed mortgage rate of 5 5/8%. Easily pay for it with the HELOC.

DanaMac
02-07-2009, 08:16 AM
Speaking of credit card accepting, who here is now doing it? I have held off as long as I can. But I think I will set up a Pay Pay account which has lower fees and percentages than a regular merchant account. I'm not going to advertise it, or even make it available to everyone. Mainly for those that are late on paying. I have one right now that my neighbor/lawyer is going to now handle. $275 from last May.

AI Inc
02-07-2009, 08:16 AM
I financed 2 the yr before last and 1 last yr.
1st one was a small city lot , front yard only $1300 , $300 down , pay the rest before the end of the winter , was a cop here in town , was payed before the end of winter.
2nd was $4400 , $1000 down , $400 a month till payed. Payed on time in full and gave me 2 referalls that payed cash on same street each new job sold for $5k +
3rd $5600, for a DEA agent , next town over . $1000 down , $600 every 2 weeks till payed.

FIMCO-MEISTER
02-07-2009, 08:26 AM
Speaking of credit card accepting, who here is now doing it? I have held off as long as I can. But I think I will set up a Pay Pay account which has lower fees and percentages than a regular merchant account. I'm not going to advertise it, or even make it available to everyone. Mainly for those that are late on paying. I have one right now that my neighbor/lawyer is going to now handle. $275 from last May.

Rethink PayPal. It has worked for me but my understanding is PayPal is far more buyer friendly than seller friendly. A lot of EBay sellers have been burned by PayPal. I'd check your bank and see if it can't be integrated with your account for auto deposit and ease of record keeping.

DanaMac
02-07-2009, 08:33 AM
Rethink PayPal. It has worked for me but my understanding is PayPal is far more buyer friendly than seller friendly. A lot of EBay sellers have been burned by PayPal. I'd check your bank and see if it can't be integrated with your account for auto deposit and ease of record keeping.

My bank's rates aren't too forgiving either. At least not when I looked into it last spring. My GF has an account, she makes and sells handmade soap as a hobby, and it works well for her. No problems for her. I talked with two other people that set up merchant accounts and I easily said no way with their monthly fees, charges, and high rates.

But I will check the differences again before setting anything up.

FIMCO-MEISTER
02-07-2009, 08:35 AM
My bank's rates aren't too forgiving either. At least not when I looked into it last spring. My GF has an account, she makes and sells handmade soap as a hobby, and it works well for her. No problems for her. I talked with two other people that set up merchant accounts and I easily said no way with their monthly fees, charges, and high rates.

But I will check the differences again before setting anything up.

Stick with checks. CC are a PIB. Just more paperwork.

hoskm01
02-07-2009, 09:06 AM
I agree that time and paperwork spent filing a 2nd or 3rd on someones casa just for the interest will kill any profit you were planning to make on it.

Banks are going under with people defaulting on 1st and 2nd mortgages, your 2nd or third mortgage is just a vulnerable.

ARGOS
02-07-2009, 10:42 AM
I accept credit cards. I have found that not many people use them. It is handy when the customer is out of town and they can pay instantly over the phone.

Two months ago I made a mistake and accepted a credit card check. The check went through, but my bank has a ten day hold policy on credit card checks. I had to wait an extra ten days for $4500 bucks. At the time I needed the cash.

Dripit good
02-07-2009, 11:18 AM
I accept credit cards. I have found that not many people use them. It is handy when the customer is out of town and they can pay instantly over the phone.

Two months ago I made a mistake and accepted a credit card check. The check went through, but my bank has a ten day hold policy on credit card checks. I had to wait an extra ten days for $4500 bucks. At the time I needed the cash.

Do you charge a user fee when they pay by CC?

Wet_Boots
02-07-2009, 11:33 AM
What's the bank's take on the CC payments?

DanaMac
02-07-2009, 11:37 AM
What's the bank's take on the CC payments?

I'll have to dig out my paperwork. Someone else might have hard numbers. A lot of it depends on how many transactions you do. they have a per month fee, a per transaction fee ranging from a few cents to a few dollars, and a percentage of sale ranging from 1%-4% but usually in the 2%-3%.

Dripit good
02-07-2009, 11:40 AM
3% for us.

Is it unethical to pass it on?

DanaMac
02-07-2009, 11:44 AM
3% for us.

Is it unethical to pass it on?

I don't think it is legal to have a fee directly for it. But I think you can say, "Here is our regular price, and here is a percentage discount for cash or check". I could be wrong, but that was my understanding.

Wet_Boots
02-07-2009, 11:46 AM
There could be banking laws that prohibit you from passing on the surcharge. Laws that are routinely ignored - witness all the "minimum purchase required for credit cards" language you see, which I believe is also a violation. If they could get the percentage down to less than 2, I'd consider it.

Dripit good
02-07-2009, 11:47 AM
I don't think it is legal to have a fee directly for it. But I think you can say, "Here is our regular price, and here is a percentage discount for cash or check". I could be wrong, but that was my understanding.

I think you're right on that.

Dripit good
02-07-2009, 11:48 AM
How do gas stations get away with it?

Wet_Boots
02-07-2009, 11:51 AM
They aren't actually placing a surcharge on the credit card purchase.

DanaMac
02-07-2009, 11:53 AM
How do gas stations get away with it?

By doing exactly what I mentioned. Regular price with a 2-5 cent discount.

BSME
02-07-2009, 11:57 AM
I take credit cards.

Raise your price across the board 3% and whenever someone doesn't pay with a credit card you come out ahead. It's a lot more convenient. You can accept payment online.

RandalatA1Sprinklers
02-07-2009, 12:11 PM
My risk is secured with a mortgage against the property. The idea is to not only make more sales, but to build an income in the off months. Thats another reason I am making the payments "around" $100.00 per month. It makes it very affordable for them.

Dripit good
02-07-2009, 12:19 PM
My risk is secured with a mortgage against the property. The idea is to not only make more sales, but to build an income in the off months. Thats another reason I am making the payments "around" $100.00 per month. It makes it very affordable for them.

Do you really think this will get you more sales?

It's best to get you money quicker isn't it?

bicmudpuppy
02-07-2009, 12:33 PM
Dana, when I was doing irrigation on my own, I did the pay pal thing and the best part is/was that pay pal basically takes care of that up charge for you. You have a pay pal price list that is for the convenience of you customer. The "extra fee" at pay pal is for the on-line service, NOT for using the credit card. If they want to use pay pal, you don't really care if the use a pay pal e-check or the plastic. You care if you get paid. Pay pal then skims a percent for their service. They also do not care how the customer actually paid, as long as everyone gets paid. On the down side, pay pal is VERY buyer friendly. My pay pal transactions were for customers using plastic to finance systems. I allowed two payments. First pay was to schedule. Second pay was due when we showed up. I show up on Monday, if they pay pal doesn't post Monday night (visible in the account Tuesday from the midnight roll over), I find somewhere else to be Tuesday. For Turn-ons an winterizations, I would say it works the same way. Payment has to clear pay pal to show up. I would be leary of taking the payment via pay pal for service work, BUT what are you actually out? If pay pal credits the customer, they can't count it towards their percentage. All you now have is a non-pay. Same as you would have had before.

ARGOS
02-07-2009, 01:06 PM
I don't think it is against the law to have a surcharge on credit card purchases. I think it is against the merchant-credit card processor agreement. So, contractually you cannot have a surcharge. Basically Visa and Mastercard don't want their customers to pay a surcharge, the merchant is supposed to.

I look at it like 2% discount for paying within 10.

RandalatA1Sprinklers
02-07-2009, 01:33 PM
I think it will increase sales. I am also accepting credit cards. We had some people last year use their cards on big sales so they can get their points or miles. In my eyes, financing them builds an income for me for the off months and the future. I used to be partners in a land company in California. Carry the paper is a great way to build an income.

RandalatA1Sprinklers
02-07-2009, 01:38 PM
Thats why it is all done through an escrow at a title company. It's the same theory as an owner carryback. They would have little ground to stand on as the sprinklers become appurtenant to the property once installed. If they did not pay, I foreclose on my mortgage. I knew my degree in business would help me someday, lol.

RandalatA1Sprinklers
02-07-2009, 01:40 PM
What kind of financing agreement do you use? Do you secure your loan with the property?

hoskm01
02-07-2009, 01:46 PM
Whats the process at escrow company cost?

TRILAWNCARE
02-07-2009, 02:10 PM
Whats the process at escrow company cost?


That's what I was wondering.

What is it going to cost to file all the proper paperwork. Like at the court house for a lien?

Should you have a lawyer do a title search, bring abstract up to date with your name on it, if so what is that going to cost, and who pays?

If someone is going to default on you, who is to say there not defaulting with the bank, and the bank is going to foreclose and take the property. What do you do then?

Dripit good
02-07-2009, 03:24 PM
I don't think it is against the law to have a surcharge on credit card purchases. I think it is against the merchant-credit card processor agreement. So, contractually you cannot have a surcharge. Basically Visa and Mastercard don't want their customers to pay a surcharge, the merchant is supposed to.

I look at it like 2% discount for paying within 10.

That is correct. They can cancel your agreement.

My perspective is a 3% loss when paying by credit card. One of our snow sites wants us to use his CC for his current bill (over $100,000.00). Of course he would like the miles and bennies that come with that. Even though we do accept CC's, I told him we won't accept CC payment on his snow, just send the check.

Initially that 3% can be a deal breaker when it comes to getting larger sites. The big picture shows the potential to lose a great deal of money by doing this type of transaction.

Dripit good
02-07-2009, 03:36 PM
My risk is secured with a mortgage against the property. The idea is to not only make more sales, but to build an income in the off months. Thats another reason I am making the payments "around" $100.00 per month. It makes it very affordable for them.

I think it will increase sales. I am also accepting credit cards. We had some people last year use their cards on big sales so they can get their points or miles. In my eyes, financing them builds an income for me for the off months and the future. I used to be partners in a land company in California. Carry the paper is a great way to build an income.

Forgive me, not knocking ya but isn't this considered budgeting?

hoskm01
02-07-2009, 03:49 PM
Forgive me, not knocking ya but isn't this considered budgeting?
I think it would be great to carry those notes, and to have some income, for any months. I still question the profitability after completing all the legal paperwork and the risks involved in this or any financial climate.

I dont think you can have it all and come out in the black on this type of setup.

Mike Leary
02-07-2009, 04:16 PM
Never, ever would I take a card, I don't give a rip about their miles. :hammerhead:

Waterit
02-07-2009, 09:47 PM
Banks are going under with people defaulting on 1st and 2nd mortgages, your 2nd or third mortgage is just a vulnerable.

More so - you're 2nd or 3d in line to get paid IF there's enough after mrotgage #1 is paid off. With foreclosures on teh rise, not a very safe bet IMO.

My risk is secured with a mortgage against the property. The idea is to not only make more sales, but to build an income in the off months. Thats another reason I am making the payments "around" $100.00 per month. It makes it very affordable for them.

See above.

kootoomootoo
02-08-2009, 01:29 AM
I finance systems through JD.
They don't pay not my problem.

FIMCO-MEISTER
02-08-2009, 07:58 AM
I think it will increase sales. I am also accepting credit cards. We had some people last year use their cards on big sales so they can get their points or miles. In my eyes, financing them builds an income for me for the off months and the future. I used to be partners in a land company in California. Carry the paper is a great way to build an income.

You seem to know something about this so it may work for you. I think carrying paper on 100s of thousands of dollars is far more profitable process wise than carrying paper on 5,000. Also if you need off season cash flow that screams to me poor budgeting. Spreading 8 months of income over 12 months takes fiscal management and discipline. DON"T BUY BOATS IN JUNE.

bicmudpuppy
02-08-2009, 09:53 AM
DON"T BUY BOATS IN JUNE.

ROFLMAO, I did that ONCE :) I was 16 and working 2500-3000 hours per year already. I thought I had more money than I could burn. Paid 1600bucks for a sail boat. I got it wet three times (just because you spend some cash, doesn't mean you get any more time off). I had six days off that summer. I took a Fri-Sun to have my wisdom teeth cut out that Friday Am, I had the 4th of July off (middle of the week holiday), I took the Saturday before school started off (went to the football game that Friday night), and I had the first Sunday of the summer off for something at church. I sailed 3 of the four evening weekend days on either side of the 4th holiday. We camped at the lake 5 weekends and Dad and I drove back to the golf course (about a 70 minute commute) on those weekends. We brought the camper home on Monday nights late many of those days. I learned how to "fish" w/o baiting a hook that summer. Fishing under a shade tree is very relaxing, except the fish sometimes interrupt your rest.

Back to the topic. A few guys have mentioned using institutions to FACILITATE financing. I think a site search would prove we have talked about this before. I also think that if memory serves, all the guys who wanted to finance systems in those other threads...................are not here anymore. Maybe they got rich and famous and don't slum here anymore, but I kind of doubt it.

kootoomootoo
02-08-2009, 11:02 AM
If you financed through a facilitator 200K that would be a bad thing?

RandalatA1Sprinklers
02-08-2009, 12:54 PM
The title company handles the title search. I get prelim to reveiw. Process costs a few hundered. fees are financed with the loan. recording is about 20 bucks. if i am second and they foreclose on first i have to be in a position to take over first. not a problem.

RandalatA1Sprinklers
02-08-2009, 12:58 PM
well, b4 u go screaming bad budgeting, you should have all the facts. you are way off course. here is one for all of you. your mind is like a parachute, works a lot better if its open. if i have 20 $5000 notes isnt that $100k? hmm, sounds profitable to me.

FIMCO-MEISTER
02-08-2009, 01:11 PM
well, b4 u go screaming bad budgeting, you should have all the facts. you are way off course. here is one for all of you. your mind is like a parachute, works a lot better if its open. if i have 20 $5000 notes isnt that $100k? hmm, sounds profitable to me.

Money today is always more valuable than hoped for money tomorrow. I realize you are banking on turning a 5,000 system into a 8500 system with self financing. I personally would rather have the 100,000 paid upon completion. But try your concept and let us know how it works. If you can get 12-15% that is a pretty good return on investment. How does the IRS treat the 12-15% interest you receive? Is it taxed differently? I don't see how it can be treated as gross sales so you are forced to show that as earned income regardless of how you do biz wise it seems to me.

RandalatA1Sprinklers
02-08-2009, 02:04 PM
The IRS treats it as an installment sale. Just like if I sold my house on a land contract. I like all the responses and input on this. Never thought I would get so much input. Thanks to everyone!

RandalatA1Sprinklers
02-08-2009, 07:29 PM
I have done so much, with so little, for so long...I am now qualified to do anything with nothing.

Wet_Boots
02-08-2009, 08:06 PM
I have done so much, with so little, for so long...I am now qualified to do anything with nothing.What if we give you five loaves and two fishes?

RandalatA1Sprinklers
02-08-2009, 08:08 PM
I finance systems through JD.
They don't pay not my problem.

Hey kootoomootoo. How do you do that one? Did you set up an account with them to do this? This is another good idea. I didnt know they did that. I checked out their website but it is a little ambiguous. I'm going to give them a call tomorrow.

hoskm01
02-08-2009, 08:16 PM
Hey kootoomootoo. How do you do that one? Did you set up an account with them to do this? This is another good idea. I didnt know they did that. I checked out their website but it is a little ambiguous. I'm going to give them a call tomorrow.
Weve used JD Credit in the past. Works well.

"Heres the application, mam. YOU fill it out, YOU send it in, YOU get approved, YOU get your landscaping. I get PAID.

RandalatA1Sprinklers
02-08-2009, 08:29 PM
What if we give you five loaves and two fishes?

Life is like a **** sandwich, the more bread you have the less **** you have to eat!!

RandalatA1Sprinklers
02-08-2009, 08:31 PM
Weve used JD Credit in the past. Works well.

"Heres the application, mam. YOU fill it out, YOU send it in, YOU get approved, YOU get your landscaping. I get PAID.

sounds awesome! anything to sell systems!

hoskm01
02-08-2009, 10:18 PM
sounds awesome! anything to sell systems!
Do one thing and do it well, I say.

You wanna landscape? Landscape then.

You wanna sell mortgages? Sell mortgages then.

If someone needs a mortgage to buy your landscaping, let a mortgage broker sell it.

RandalatA1Sprinklers
02-08-2009, 10:22 PM
Do one thing and do it well, I say.

You wanna landscape? Landscape then.

You wanna sell mortgages? Sell mortgages then.

If someone needs a mortgage to buy your landscaping, let a mortgage broker sell it.

lmao... just like orville redenbacker with his popcorn. I'm not saying i'm the best...im just saying i havent seen any better! lol do one thing and do it better than anyone else.

hoskm01
02-08-2009, 10:29 PM
lmao... just like orville redenbacker with his popcorn. I'm not saying i'm the best...im just saying i havent seen any better! lol do one thing and do it better than anyone else.



...........................

Mike Leary
02-09-2009, 10:03 AM
Do one thing and do it well, I say.
You wanna landscape? Landscape then.

Well said. :clapping:

Wet_Boots
02-09-2009, 10:13 AM
I never knew that Orville Redenbacher invented the iPod.