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    6 Replies Latest reply on Aug 19, 2008 12:08 PM by phpmanage

    Property Management Funding/Angel Investor - Busness Credit

    phpmanage Newbie

       

      First off I wan to thank all of you this forum has been a great help thus far. Here is my questions I currently own a small property management company. I am also looking into a few property management franchises. Anyone have any ex experiences that would help my decession on if its worth it to franchise? Also problem with that is the 50-100k investment to start. I have with the advice of this forum looked into angel investors which I didnt really have much luck finding the right place to find one. I have also spoke with about 15 different business credit building company's out there, While all promise the world have any of you had one that worked. Also one that wasnt 10-30k up front. I have set up my D&B duns number experian small business credit profile. I also updated my website established a LLC opposed to a DBA and also got my EIN number. All my wireless account and business phone accounts are set up threw PHP. I am currently working on my formal business plan which shows a substantial ROI. With in the 1st year of funding I will have a ROI of 250k to 500k. Thats going off 80% of plan. I also sat down with my local score advisor. And while they had some good advice I don't feel like I was told anything I didn't know. They were great and provide a great service but the mentor I met with didnt know much about my needs. I have another appointment with another score mentor on the 27th. Score is great I just need to find the right mentor that understands the market I am in and my needs. So when it all boils down to it what can I be doing different what can I try. And what ave do you guys feel would be good to look into a angel investor or the best business credit building company that wouldnt just take me money and run. I have looked into SBA and at this point that looks to be the best option. I know if given the proper funding this is a very profitable venture. I have been able to prove that with no marketing or capital just what's free and at my despoil Please let me know what I could do differently. The following is a little about my company and myself.

      PHP Management,LLC DBA Pro Property Management
      PPM has been in business since July of 2004 But PHP, LLC only since this month
      Personal Credit is average or below for that matter
      I currently just doing this on the side with no money just business realasonships am managing 9 Property's
      I have a accountant and lawyer but not very happy with my business lawyer. He really does help much
      I currently threw just referrals and no marketing budget am presented with 5-10 investors per month. And 5-10 property's at well below market value somewhere around 50% most times.
      But without funding I am a small man in a big mans world
      I made 80k after all my write offs last year. My 1099 showed 167K
      I have been in the Mortgage/Property Management for 6 years now. And threw networking and as many online courses that I can get my hands on have been able to do ok for myself I just know I could do so much more with the right backing.
      All my business accounts are recently set up though BOA small business
      I would love any help possable and am open to different ideas
      I have resourses to mortgage brokers title company's realtors property investors and quite a bit pre forclosures that I get before they hit the list.

      Business Credit profile
      Experian business report has been on file since july 2004 but no tradelines
      D&B duns fresh and new
      LLC formed and filed
      Business phone published
      Home Office but I am going to lease a small office shortly.
      Only 2 small net 30 tradelines. That soon will be reporting
      EIN number is only from time that the LLC was formed.

      I hope this helps I am trying to give as much info as I can think off the top of my head. Thanks in advance for any help or advice..
        • Re: Property Management Funding/Angel Investor - Busness Credit
          LUCKIEST Guide
          Property Management Funding, Welcome and thanks for sharing so much

          It is always nice to hear that SCORE helped. Another SCORE suggestion.
          Visit SCORE on line. You can pick your field (like Property Management) and
          find counselors all over the country who have similar experience and MUST
          answer your questions

          Good luck, LUCKIEST
          1 of 1 people found this helpful
          • Re: Property Management Funding/Angel Investor - Busness Credit
            Milleisen Scout
            It sounds as if you are off to a great start with your company considering that you are only doing it on the side! I'll try to address a few of your questions:

            1) Don't bother paying anyone to establish business credit. Your personal credit is much more important in the eyes of most lenders. Most small businesses do not have enough reported on a D&B to make it a material part of the discussion. Paying your personal mortgage, car payments and so on will have much more bearing on a banks assessment of your repayment history.

            2) It sounds like you have a decent amount of customers and are not lacking in opportunities. Why are you considering a franchise? If you are already in the business, maybe you can boost your profile with a much smaller marketing/PR investment.

            3) From what you said in your post, you now want to shift from property management to being an investor. Is that correct? While I know there are many good deals out there, it's important to consider that unless the property is generating rental income that covers ALL your expenses, it will be a consistent drain on your cash flows. If your goal is simply to flip, you need to have a significant amount of capital to carry these properties until the market turns. The problem, as I see it, is that nobody knows when that will happen.

            4) If you began investing in properties, would you plan on leaving your job and doing it full time? If you stay at your day job, you'll have income to fall back on in case unexpected expenses arise.

            I hope that helps!
            • Re: Property Management Funding/Angel Investor - Busness Credit
              Milleisen Scout
              5) Angel Investors - chances are that you will have trouble getting an investor to part with their money for an opportunity like this. They tend to be welathy, financially sophisticated individuals, so they more than likley understand the real estate already and may not see the value in helping you finance your first property. If you were a seasoned investor with a track record of success in the business, only then will an Angel Investor consider funding your project.
                • Re: Property Management Funding/Angel Investor - Busness Credit
                  phpmanage Newbie
                  Thanks for the feedback I applogize I must of mis spoke in my post. I'd like to cralify some things and anwer your questions.

                  1. I am currntly working on my personal credit. Anything that has happened in the last 3 years has been paid perfect. The only thing that is hundering my report are things that are over 5 years old that keep getting sold again and agiain. I bought my 3 reports from true credit.com Most of my diputes are coming off slowly but surly.

                  2. While I do not lack customers I do lack name reconition. One of the franchises that I am looking into is very well known. They have done the marketing for me. The investors that I am trying to capture are in the CA market. And because Austin is booming so much they are coming in by the car loads and dropping miillions. I spoke with a fanchise owner in Dallas and they capture alot of your business for you.

                  3. This is the part where I aplogize about I do not want to switch to a investor only. I have however been a investor and bought over 16 propertys in the past. I manage them threw my company it allows me to get paid for collecting my own rent. What I currently do at PHP. I have a group of investors they sign a contract with me so being to end I find the property. Due to word of mouth and the small amout of marketing via craigslist free add sites, small signs all over town saying we by home regaurless of the condition save yourself from forclosure, I also have a few lawyer and tax lein lawyers that have more business than they know whaand threw mainly good ol WOM. After I do this I contact
                • Re: Property Management Funding/Angel Investor - Busness Credit
                  phpmanage Newbie
                  Sorry the power went out when the computer came back up my reply which was far from done was posted. Sorry again.

                   

                  3. the lawyers and go old WOM. after I find a property that hasn't hit the foclousre list cause honestly at that point there is 1000 people just like of yourself. I find how far we are out how far we are away from the bank taking it. If we have 60 days or so I just get the deal done. If it is a shorter period of time than that. I call the mortgage company and find out what it is going to take to pay this loan current. The person whom is selling the property signs form allowing this to happen and doesnt get thrown out on the street. You give them a equity share in the sale of the property. While that is only 5-10k. It is enough to allow them to rebuild there life and the don't have a foreclosure on there credit report. Then I work with my title company to put it into the proper ownership and get the house both on the finance side and title side into my clients corp or llc. I also have a list of great contractors that I work with at penny's on the dollar to do any repairs need to the house. Once the repair are almost complete we get it on the market and lease it out or sell it what ever my client wants. Even though right now its better to hold it for 3-5 years. The market will rebound. I do all of the this for a small percentage of what my client brings to the table. Plus a portion of the rent collectde. The investor sits back and buy the right property's at the right price and doesnt lift a finger other than to write the check. I also do this for myself if it is a deal I cant pass up.

                  4.As far as the begining to invest part I do have some reserves but not to the point I like. Thats why I was looking into business lines and angel investors. I have a business and marketing plan almost complete. Its taken a while cause I want to make it prefect or as close as I can get it.

                  5. With all these things in mind if i was able to show threw a proven track record and a business and marketing plan that the Angel investor could have a ROI of 150-200% in 3-5 years as well as ownership in the company. I am currently looking for 200k-300k. I will be investing 50k of my own money as well. Thanks for your help thus far I really look foward to your feedback
                  • Re: Property Management Funding/Angel Investor - Busness Credit
                    phpmanage Newbie

                    I keep trying to post my comments and they will not post I am sorry hopfully the additional info I posted will show up on there.