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Thread: Pregress Thread- Or not

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    Default Pregress Thread- Or not

    I have been long over due for one of these but I was waiting until I had something monumental accomplished. Anyways I am here to outline what I am trying to achieve as well as some background info. I have been entrepreneurial as long as I can remember. Whenever somebody told me "man I can't wait to get XXX job" I would always respond with I would rather own "XXX business you are working for". Always had a side business going since as long as I can remember. I started my first company as a sophmore in college and my second when I was a junior had my third on the way as spin off of the my second. I have been running them until recently when forces beyond my control forced me to close them. So I wandered around trying to figure out my next move when I found this forum and here I am.

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    Rickson9 (Dec 26th, 2011)

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    Business Ideas I have been working on: For some reason I really like lists.

    1: Purchase an existing business that is troubled and turn it around or a solid business from an older owner looking to retire.

    2: Create a niche ecommerce store.

    3. Design a new product and take it to market

    4. Purchase an apartment building/ Rehab and flip/ Lonnie deal

    5. Wholesale distributor

    6. Hustling craigslist and beyond

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    Now for the progress:

    1: After looking at a few thousand business I have found that most business brokers do not even return my phone calls. (thinking about entering that business.) I actually got into an argument with a broker because he was trying to tell me that ROI can only be used in realestate then after repeatedly calling me kid I suggested that he might have mistaken ROI for Cap rate. Needless to say the conversation ended there. Most owners are asking too much for too little both good and bad. Example: There was a "Popular Salon" for sale for around $1mil that cashflowed 50k a year...really. However, I might have found a nice pizza place in my area that the owner is considering selling. It would not make me rich but I have run a pizza place before and it is currently passively run. Currently waiting for the financials and the asking price.

    2: I have started The Challenge as a way to learn about internet marketing. So far it has been very educational but I do not like how everything he teaches you is on expensive software that I am not willing to pay for at the moment- no real online income. I have identified several great keywords but have been unable to secure distributors. I have run retail before and was surprised at how negative sales reps are to you when you mention ecommerce. If I had a dollar for everybody that has told me I wont make any money sell just X I wouldn't need to sell anything. I am still working hard on this one and learning as much as I can.

    3: I spent a few days reading about licensing/inventing/patenting and then came up with some ideas. Will call it idea 1 was something that I personally wanted and figure worst case I can use it for myself. It was only a slight modification of an existing product so I figured it would be easy to get done. I found a manufacturer willing to work with me and get the details worked out but there was going to cost 1600 to make a new mold for the prototype and given the amount the I thought I was going to sell I decided to file that away for a rainy day when I have more money. Idea 2 I am still working on and recently found a manufacturer that has just set up shop in the US. The product he is offering is almost exactly what I was looking to build but the price point is a little high and it is missing a few features but I am looking to take it to market anyways and see if I can't sell it/ get customer feedback. This will allow me to test my idea and see if my added features are actually in demand and go from there. In addition I am looking into setting up an exclusive distribution deal with him Refence #5.

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    4: I have been investigating a rehab/flip but have decided that I will need to get a job or business rolling in order to get a loan. In today's market I am not confident enough that I could sell/refi it fast enough if I needed to free some capital or could not afford it. I am still planning on this and learning but will be putting that on the back burner for a wealthier tomorrow. As far as apartments go I have not found a good deal yet but am still looking. I have begun shifting my focus to much larger buildings so I can be classified as commercial giving me more financing options as well as LLC REIT options. Currently investigating master lease options, owner carry, assumable, and about every other creative financing method I can uncover. I actually found a 90 unit building 100% rented with a waiting list and a master lease/purchase option but the price is just way out of line. The difference between what I would pay and what he is asking is just too great to see a deal made without cash in hand. (please correct me if I am wrong)
    Asking: 6.6mil Cap 7%
    GOI: 620000
    TOE: 154000
    NOI: 467000
    First thing that jumped out at me was that the Total expenses was really low. Their lawn care, water, and maintenance bill was lower then I have seen else where. I am going to assume that the lower maintenance bill is because the building is newer and knowing the property management company they have been neglecting their maintenance. This = a time bomb. Also the current property tax was based on a 3.2mil evaluation so I would imaging that a 50% hike in taxes would down the pipe so add another 40k to the expenses. Not to mention that given a 20% down payment and unusually low expenses the NOI would not cover the mortgage. I am still contemplating wasting my time to see what he has in mind for the master lease but given the stats I do not think this will be a profitable endeavor. For trailers I almost put together my first Lonnie deal but could not get past the fact that the lot rent was $800. For the price of my owner financed note and the lot rent somebody could rent a nice house in the same area. Since it is difficult to do everything (rent/rehab) in the winter and not wanting to risk having to replace a furnace to keep my pipes from freezing I have decided to wait until spring to start this up again. I could continue on the real estate thing for days but I must move on.

    5: As previously stated I have found a manufacturer that has just set up an office in the US offering exclusives. I am looking to find a few customers and then start negotiating locking up as much area as I can. I feel his price is a little high but I think that if I can get it sold I should be able to either negotiate it lower or get it manufactured myself for lower and import it. Any advise on this one would be appreciated. I have also looked at doing this for a few other products one of which I am also contemplating opening a B&M retail store. There is also a new product protype that I am going to try and sell to some B&M stores directly. If I am good they will buy a few and I can either scale to main distributor or make some side cash.

    6: This is currently my bread and butter in addition to some side jobs. I am using my negotiation talents and street smarts earned from years of hustling to keep my bills paid. Been doing things like this since before I could drive. I remember having to contemplate how I was going to get it home on my bike. (wish I had craigslist back then).
    Current hustles:
    Selling wholesale products both locally and on ebay. Just sold my prototype today whoot.
    Leasing apartment: I lease apartments for an apartment leasing company but it is slow in the winter.
    Craigslist: as many have become aware of you can often purchase things cheap and then sell higher. I have been running into alot of competition in the apple electronics space. I usually line up at least 4 isomethings to purchase later that night but am lucky if I get to purchase one. Sniffed out a scammer yesterday and saved myself 250. I don't want to be buying any Iplankes.

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    Sorry its a lot I know. I mostly wanted to get this all out so at least I could see that I have actually accomplished things even though my bottom line is not reflecting it. Anyways I would like to thank everybody on this forum for all of the great information and help. There are just too many great people here to list and I cannot thank you all enought.

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    I've read you entire thread and you give a while new meaning to hitting the pavement. Do you find multitasking and having so many plans in progress at the same time to be difficult?

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    Yes and no. A lot of my time is spent waiting to hear back from people suppliers etc. Since the work is very spread out it comes out to a few hours a day on each business idea. I do not have tv or really anything else to distract me and since entrepreneurship and investing is my passion that is all I do. Recently I have been hitting a lot of road blocks. Some days it feels like I am just beating my head against the wall for 12hours but I am hoping to push one idea through. I hope to be able to narrow my focus soon.

    ps: another problem I have run into working on so many projects is the list of unanswered questions. It seems like the deeper I get into each project the more questions I have.

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    #5. I am planning on starting with one or two products and working my way up. I am still waiting for word on whether or not I will be given exclusive on my first product. I hate waiting as I am anxious to start selling. If I don't get it I am going to have to get creative with my business model. I am currently focusing the most on this business but it seems like the wholesale business model is being stressed with the Huge retailers backward integrating and manufacturers forward integrating. My concern is that I am going to spend a lot of time selling products only to be cut out of the picture. If anybody has any insight into this dilemma please enlighten me because this is a major concern of mine going forward.

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    I am still plugging along on my wholesale business, recently read a few good books and cannot thank jackedwards enough his thread and answers to my questions are much appreciated. I have developed a great distribution plan and contacts that will make it work. Once the ball is rolling i should be nationwide within a year, i just have a few key pieces of the puzzle to piece together. I almost finished my website which should aid in my credibility and will be filing my DBA forms soon. I want to start off small to ensure that all of my customers and clients will receive the best buisness experience. Since my reputation is everything in this buis i am taking a sustainable, predictable, profitable growth strategy. I will be attending some hopefully great seminars, tradeshows, and looking for a mentor of somekind. I have also located a few more products that should fit in well with the one I am working on now.

    I also took a job at a private equity intermediary that helps buy and sell middle market companies. I am hoping to learn a lot and continue to develope my network.

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    Its been a while. Wish this was more of a progress thread but in due time.

    I have been working hard on my wholesale business. I recently met with the GM of a manufacter to try and negotiate some kind of a JV deal. I didn't get exactly what I wanted but I figured it was good enought to get started if I got screwed down the road owe well at least I got some good life experience. I have been making sales calls all last week while waiting for my first order but responses have been dismall. I am hoping the holidays have something to do with that. I also began developing ways to sell directly to my customers incase a distrib doesn't want to carry my product. I have decided to try a direct mail/email campaign, lined up potential sales reps, and figured a good door to door could add some unit sales. Now for the bad news

    It looks like the manufacture has just slashed his prices and is now selling on ebay. So long of he short my profit margin has drastically been reduced. I no longer see any value add to a distributor as the margins are too tight to make it worth their while in this niche and my direct sales will probably cost more then I will earn. I am still debating trying to find a way to sell these as the manufacture is averaging 30K/month on ebay but with the way he is opporating it is obvious that I will not be able to compete with him. So long of the short 3months down and nothing yet to show, I am still planning on hustiling the units I purchased and should be able to make a few grand. The real crappy part of this is I was going to put them on ebay but while waiting for my first sample the manu opened a store, listed them and proceeded to sell 30k month for the last 3 months.

    I am now evaluating a few of the other products on my list and I am going to have a meeting with a wholesale veteran to try and develope a better direction. I also found a few businesses for sale that look good and a few appartments that are killer deals but probably too good to be true. I am imagining some major remodel work neccessary to justify these prices but time will tell.

    Hope yall had a great haliday.

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