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Can You Make Over $100,000 a Year in the Auto Repossession Business?

A common question in the repo industry is, “How much money do repo men make?”

If someone told you that you could make over $100,000 a year in a bad economy without a college degree, you’d think they were crazy.  But some auto repo business owners are not only doing well – they’re making six-figures a year.  When the economy does bad, they do better!

How Much Do Repo Men Make?

If you start your own auto repossession business, you can expect to earn $250 (or more) per repo’ed car.  If you repossess two cars a night, five days a week, that’s $130,000 a year.  It certainly requires hard work and determination, but it’s possible.

Repossession agents make the most money when lenders hire them to track down hard-to-find debtors – which is called “skip-tracing.”  If a debtor voluntarily gives up their car (or if they’re easy to track-down,) an agent may only make $100 for the recovery.

Repo men who work for someone else typically earn 40{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of the repo fee – or $70 to $100 per recovered vehicle (on average.)

What Are The Pros and Cons of Owning Your Own Repo Business?

While it’s true repo business owners make the most money, they have to pay for gas and overhead expenses before they get paid.  And, as the motto in the repo industry goes, “no recovery, no pay.” 

Fortunately, you don’t need to invest in expensive equipment to start a repo business.  In fact, you usually don’t need a tow-truck!

That’s because many lenders keep key codes on file for every vehicle they own.  Sometimes they even keep a spare set of keys!  All you have to do is get a key made, find the car and drive it away.

You can invest in a minimal amount of equipment to get started, and reinvest your profits as your business grows.

What Are The Pros and Cons of Becoming a Repo Man for Someone Else?

Although there are advantages to owning your own business, many repo agents find it easier to get started working with an established repossession company.  That’s because in some states, there are many hoops to jump through to become a licensed repossession business, including:

  1. Getting bonded and insured
  2. Competing a required amount of training (not all states require this)
  3. Familiarizing yourself with repossession, investigation and collection laws
  4. Investing in adequate equipment, computers and software for your business

In fact, many repo businesses owners got their start working for someone else!

While the repo business isn’t for everyone, if you have a tough skin, a hard work ethic and an entrepreneurial spirit, it can be lucrative whether you work for someone else or yourself.  The key is getting adequate training before you head out into the field, so you can avoid common (and costly) mistakes!…

‘Mobile Oil Change’ Businesses Have Terrible Profit Margins

The oil change business is hard. I am not going to sugar coat it. I have been in the business for five years and I am telling you from first hand experience. I have done more research on the topic that several people put together. I am an authority. I know what I am talking about. There is no profits, at least one can actually build a business on, in oil changes.

This is coming from someone who is in the business. Whoever, no matter who he is, tells you that you can make a decent profit off oil changes, regardless of what kind, he is lying. He is either purposefully lying to you to make money or really does not know. The profit from oil changes cannot, and I do repeat for emphasis cannot, sustain a viable business. The whole quick lube model is so flawed its almost comical. And the typical mobile quick lube model is even more flawed at its core. I have met only one guy who has what I consider made a real profit from mobile oil changes and his name is Lance Winslow. I have spoken to the guy and he is very smart but in one of his posts he stated that he makes very little from his oil change company. It had just been one of many companies he has started that has allowed him to achieve wealth in this country.

Every quick lube, including Jiffy Lube, makes no money from oil changes. Mobile oil change businesses will quickly realize this. The cost for your typical oil change in the United States, using the cheapest oil you can find, is $15.00 with oil and filter. The going rate for an oil change in the US is $20-$30 per five quart oil oil change. That means that in most states the most one can profit from an oil change is $15.00. And that is being liberal with the numbers and not including fuel. Fifteen dollars per oil change is not going to sustain a viable business. Some vehicles are absolutely terrible to work on like certain Chevrolet Cavaliers and Land Rovers and will take you more than an hour minimum to do one oil change. What do you get for all this trouble? Maybe twenty dollars. Its the biggest joke going.

The only way most quick lube places can make money is buying really pushing add-ons. If you work at any quick lube and do not sell the customer on additional services they may or may not need than you will be terminated very fast. The quick lubes cannot make money any other way. They have to push unnecessary air filter, fuel filters, coolant flushes, transmission flushes, power steering flushes, rear end flushes, cabin air filters, wiper blade replacement, fuel injection cleaners, and many others to even make a meager profit. The mobile oil change businesses have to do this a lot less because they have lower overhead but their profit margin still …

"Right of Offset" – Protect Your Money and Assets

What is the “Right of Offset”?

The “Right of Offset” gives a lending institution (i.e. Bank or Credit Union) a legal right to seize funds that a debtor may have in a deposit or asset account at that particular banking or financial institution, to cover a loan in default. It is also known as the “Right of Set-Off”.

What are the dangers of the “Right of Offset”?

If an individual, couple, or other entity has a checking, savings, or other form of deposit account at the same financial institution where they have a credit card, auto loan, mortgage, other debt account, that individual or entity has what can be considered a “banking conflict”. In other words, anytime an asset account is kept at the same banking institution as a liability account, a potential “banking conflict” occurs due to that banking institutions “Right of Offset”. What this means is, if an individual for whatever reason fails to make payments on a liability account, the financial institution has the legal right to not only freeze that individuals asset/deposit account, but to also seize any funds available to offset the debt due to that financial institution.

What types of liability accounts or debts does the “Right to Offset” pertain too?

A financial institutions freedom to utilize the “Right of Offset” is determined primarily by how they are chartered.

State chartered and regulated credit unions and banks, along with federal credit unions chartered and regulated by the National Credit Union Association (NCUA) have the freedom and authority to exercise their “Right of Offset” on both secured accounts or asset backed (i.e. mortgage loan, auto loan), and unsecured accounts (not backed by collateral) or open-ended revolving accounts (i.e. certain credit cards and credit extensions).

Federally chartered and regulated banks (i.e. Bank of America, Wachovia Bank, Wells Fargo) have the freedom and authority to exercise their “Right of Offset” on secured, but not unsecured accounts. A bank/financial institutions rights and authority as it pertains to its use of “Right to Offset” may vary between institutions. To find the specifics of a particular institution research the following areas:

  • The institutions regulatory authority.
  • The institutions member agreement received when establishing an account.
  • The institutions loan/debt documents or agreements received when establishing a loan.

Who regulates state chartered and federally chartered banks and/or financial institutions?

State chartered banks and financial institutions are regulated by the particular state Department of Banking, Department of Financial Institutions, or Department of Finance from which the bank or financial institution conducts business.

Federal credit unions are regulated by The National Credit Union Association (NCUA).

Federally chartered National banks are regulated by The Office of the Comptroller of the Currency (OCC). The OCC is a bureau of the U.S. Department of the Treasury.

How can I protect my assets?

Never assume that it will not happen to you. The present difficulties present in the current economy have created unexpected lay-offs and job losses. Expensive medical emergencies happen every day. Take the following steps to protect …

Life Insurance for Federal Employees: Pros and Cons of FEGLI

Many U.S. Federal employees assume that Federal Employee Group Life Insurance (FEGLI) is the best plan available to them because they are automatically enrolled in the basic plan as soon as they become employed. Many even choose to add one of the additional three coverage options (Options A, B or C). But how do federal employees really know that they’re getting the most affordable plan and the best coverage available? Have they fully weighed the pros and cons of the plans? Are they aware of alternatives?

To help federal employees better understand FEGLI’s costs and benefits, we’ve come up with a list of FEGLI pros and cons. We hope that this list will help federal employees decide whether or not FEGLI is the best plan for their family.

Pros of FEGLI

  • Convenience – You’re automatically enrolled in basic coverage, regardless of your age or health. You don’t have to take any medical exams, and you’re guaranteed coverage as long as you are employed with the government and pay the premiums. The premiums are also automatically deducted from your paycheck, so you don’t have to worry about making payments.
  • Ability to choose coverage amount – The basic plan covers your salary rounded up to the nearest thousand plus $2,000, but you can choose to add more coverage. Option A adds $10,000 to your coverage, and Option B allows you to choose even more.
  • Family coverage – Option C allows you to cover your spouse and your children in addition to yourself. Some other plans required you to have separate policies for each person.

Cons of FEGLI

  • Cost – The additional coverage Options A, B and C are an additional cost to the basic plan and these premiums increase as you get older. The premiums for the coverage on your spouse and children are based on your age, not the age of your family members, so these costs also increase as you age. You’ll also have to pay an extra premium if you’d like to add Accidental Death and Dismemberment Insurance.
  • Coverage may be temporary – You will only be eligible while you work for the federal government or if you retire from the government position. If you choose to leave your job or are terminated, you lose your FELGI coverage.
  • Lack of options – Although FEGLI does offer a few options, it does not offer choices like Whole Life Insurance, Single Premium Whole Life or Universal Life Insurance. These policies offer features and benefits that are not included in FEGLI’s plans.
  • Difficult to increase coverage – You can decrease your coverage amount at any time, but you can only increase during open enrollment periods, by taking a physical exam, or with a “Qualifying Life Event”. The last open enrollment was almost 10 years ago in September 2004, so it’s unwise to wait for these open seasons to increase your coverage.

The Target Capital Structure

Firms can choose whatever mix of debt and equity they desire to finance their assets, subject to the willingness of investors to provide such funds. And, as we shall see, there exist many different mixes of debt and equity, or capital structures – in some firms, such as Chrysler Corporation, debt accounts for more than 70 percent of the financing, while other firms, such as Microsoft, have little or no debt.

In the next few sections, we discuss factors that affect a firm’s capital structure, and we conclude a firm should attempt to determine what its optimal, or best, mix of financing should be. But, you will find that determining the exact optimal capital structure is not a science, so after analyzing a number of factors, a firm establishes a target capital structure it believes is optimal, which is then used as a guide for raising funds in the future. This target might change over time as conditions vary, but at any given moment the firm’s management has a specific capital structure in mind, and individual financing decisions should be consistent with this target. If the actual proportion of debt is below the target level, new funds will probably be raised by issuing debt, whereas if the proportion of debt is above the target, stock will probably be sold to bring the firm back in line with the target debt/assets ratio.

Capital structure policy involves a trade-off between risk and return. Using more debt raises the riskiness of the firm’s earnings stream, but a higher propor- tion of debt generally leads to a higher expected rate of return; and, we know that the higher risk associated with greater debt tends to lower the stock’s price. At the same time, however, the higher expected rate of return makes the stock more attractive to investors, which, in turn, ultimately increases the stock’s price. Therefore, the optimal capital structure is the one that strikes a balance between risk and return to achieve our ultimate goal of maximizing the price of the stock.

Four primary factors influence capital structure decisions:

1. The first is the firm’s business risk, or the riskiness that would be inherent in the firm’s operations if it used no debt. The greater the firm’s business risk, the lower the amount of debt that is optimal.

2. The second key factor is the firm’s tax position. A major reason for using debt is that interest is tax deductible, which lowers the effective cost of debt. However, if much of a firm’s income is already sheltered from taxes by accelerated depreciation or tax loss carryforwards, its tax rate will be low, and debt will not be as advantageous as it would be to a firm with a higher effective tax rate.

3. The third important consideration is financial flexibility, or the ability to raise capital on reasonable terms under adverse conditions. Corporate treasurers know that a steady supply of capital is necessary for stable operations, which, in turn, are vital for long-run …

The Five Components of a Business Strategy

Can you define exactly what makes up a business strategy? Some people say no, but we think you can.

In fact, we believe a valid business strategy has five components:

  1. Your company’s current or desired core competencies
  2. A description of how you will differentiate vs. competitors
  3. The industry or industries in which you intend to compete
  4. The initiatives you plan to implement in the areas of marketing, operations, information technology, finance and organizational development
  5. A financial forecast that shows how your plans will meet stakeholder requirements over the next 3 to 5 years

Let’s look at each of these components.

The first component of a valid business strategy is a clear description of your company’s current or desired core competencies.

You may be thinking, “Great, but what’s a ‘core competency?'” While there are many definitions, here’s a good one from Wikipedia:

ACore competency is something that a firm can do well and that meets the following three conditions:

  • It provides consumer benefits
  • It is not easy for competitors to imitate
  • It can be leveraged widely to many products and markets.

A core competency can take various forms, including technical/subject matter know how, a reliable process, and/or close relationships with customers and suppliers. It may also include product development or culture, such as employee dedication.”

For example, we could say that Southwest Airlines is a reliable airline that offers low fares. But in order to provide those benefits, it has to have certain “core competencies,” important capabilities that enable it to have low fares and to be reliable. We believe that Southwest Airlines has four core competencies that it executes so well that it regularly beats all other US airlines in terms of profitability.

These core competencies are:

  • The lowest operating costs per plane
  • An economical point-to-point airport network
  • A fanatical culture focused on customer service and cost savings
  • An ability to keep planes in the air more of the time than its competitors.

Southwest airlines couldn’t offer the benefits of low prices and reliable service if it didn’t master these core competencies. What key benefits do you want to offer your customers? What core competencies do you need to master to provide them?

The second component of a valid business strategy is a description of how you differentiate vs. competitors.

In our experience, differentiation is about being the best at something. This should be encapsulated in your mission statement – what are your company’s aspirations and how are you going to beat the competition? We just talked about how Southwest Airlines differentiates — what are you going to offer customers that will make them choose your products or services so that you can grow your business?

It takes a lot of hard work to come up with a great answer to this question and even more work to make that differentiation real. It’s easy for us to say that Southwest is the best low-cost airline in the US, but it’s extraordinarily difficult for them to pull it off.…

Make Easy Money Online: Become a Commercial Real Estate Property Scout

There are lots of ways to make easy money online. I am sure you have seen many of them in your email inbox.

One opportunity you may not be aware of is becoming a Commercial Real Estate Property Scout.

What’s a Commercial Real Estate Property Scout?

It’s a person who finds property for investors which meet a specific acquisition criteria.

Here’s the deal: This opportunity has nothing to do with sales, data entry, or any of those other possible questionable online business opportunities you may be aware of.

A Property Scout uses the Internet to search real estate listing databases for properties which meet the investors criteria. There are literally hundreds of these databases, many of which are free to use.

Advantages of the Opportunity

There are many things which make this opportunity attractive.

First, the price to get involved is very modest. It’s under $100 dollars.

Second, the money is really good. Frankly, there’s no comparison between what you can earn doing this and all the rest of the opportunities combined. It truly is one of the ways to make easy money online.

You can really earn hundreds of thousands of dollars a year.

Third, the support the company offers is incredible. While they won’t handhold or baby sit you, they will provide the weekly training, personal direction and weekly Q&A so that you can be successful–that’s more than any of the other opportunities do.

The fourth thing, is that you really can do this from home. There’s no travel involved. Plus it really only requires about twenty hours a week of work on a consistent basis.

The best part for me is that the company, Maverick Real Estate Investments, isn’t one of those schlocky companies promoting the next business opportunity. It’s real. And they sincerely want to see you successful because the big money for everybody involved is made when you find a promising property.

They’re committed to training you to be successful at it.

Maverick Real Estate Investments is in the commercial real estate business. That’s their purpose. And they’ve set up this business opportunity, so that they can attract people to help them find properties which fit their profile for acquisition.

It makes perfect sense if you think about it.

Disadvantages of the Opportunity

Are there bad points? Yes, a small one. But you really can’t blame the company for it, it’s just the nature of the commercial real estate industry.

If you need to make money right away, this is not the opportunity for you. Patience is key. While you can realistically make six figures and up a year, the fact is it takes time to find a property the investors want to acquire. It has to fit their profile (which they’ll thoroughly train you in).

And even when you find a property that meets their profile, they need the time to do whatever it takes to turn the property around which could take as long as 18 months to do.

But still, you have …

LA Insurance – Franchise Review

Insurance is a must these days. It has become a necessity. People with insurance sleep better because they know that they and their beneficiaries are covered should something happen. Almost everyone in the United States carry insurance which underscores its importance.

L.A. Insurance Agency is one of the most popular insurance companies in the country today. It is also one of the largest independent insurance agencies in Michigan, Colorado, Nevada, California, Georgia, Florida and many more. The company was founded by Anthony Yousif who started out as an insurance agent. The company headquarters in Michigan.

The company has grown so much that today they have more than 150 locations in the United States. Their primary offering is insurance for a variety of vehicles like motorcycles, cars and boats. They offer insurance for bodily injury liability, property damage liability, uninsured and underinsured motorist coverage and physical damage and recently started offering medical insurance to their clients.

The granting of franchises is the focus of the LA Insurance Agency® Franchise LLC. Individuals interested in being a franchisee will undergo an extensive background check. There is an investigative consumer report and an investigation in accordance with the anti-terrorism legislation of the United States. Among the things which will be examined is creditworthiness. Applicants might also be required to take a standardized Math and English exam. After the form has been filled out and submitted, a representative from the company will contact the interested party by phone or by email.

Aside from extensive credit checks, there are also financial requirements which must be complied with before becoming a franchisee of L.A. Insurance. Failure to comply with the minimum financial requirements will result in the rejection of an application.

While they do not publish the totals, there is the startup cost, franchise fee, minimum liquid assets and operational costs. The company takes care of the advertising, however, it is the franchisee’s responsibility to entice customers to but the insurance he or she is selling.

Once the application has been approved, there will be trainings to undergo. Staff and personnel will be taught how to use the software, as well as how to effectively sell insurance to increase customer base. The company is very hands-on with their franchisees.

When looking to start any business it is important, particularly considering today’s market, that you look for specific ways to cut minimize or reduce overhead and risk. Any business is going to have risk, but it is important to have a full understanding of the amount of investment, startup cost and “ROI” (Return on Investment).

Most people are not aware that 80{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} of ALL franchise endeavors fail in the first two to five years leaving large debts looming for years thereafter.

One way and in my opinion the best way to cut overhead, startup and investment cost is to take advantage of the new age of entrepreneurship and start a business from the comfort of your home. Opportunities have emerged in the online market that are creating millionaires …

What TN Home Buyers Need to Know About THDA Loans

Some of the best loan programs in TN are right under our noses, and THDA loans (TN Housing Development Agency) are one of them. A few reasons why there isn’t a ton of press about these great loans is because 1) not all TN lenders can do them, 2) THDA loans tend to be smaller loan sizes (on average) and coupled with the limitation on allowable fees, many loan officers who could do them choose not to, and 3) many loan officers do not offer them because they believe that THDA loans are a lot harder to get closed, which is not true at all as long as they know the program guidelines. For brevity’s sake, this article will provide an overview for the THDA program rather than detail each of the 3 loans THDA offers (Great Rate, Great Advantage, and Great Start).

The THDA loan programs were designed to offer help to low to moderate income buyers in TN seeking to purchase an affordable home. Here are the main things to know about THDA loans:

  • these loans can be used only for primary residences in TN from one to four units
  • the loans are always 30 year terms with fixed rates.
  • the borrower must qualify for an FHA, USDA Rural Development, or VA loan program before the loan can “become” a THDA subsidized loan program. The vast majority of THDA loans are FHA, since FHA loans have the broadest in eligibility requirements. Minimum credit score for any THDA loan is 620 as of right now.
  • THDA loans can effectively make FHA loans near-100{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} or 100{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} financing when combined with available THDA grant money, a “community” 2nd mortgage program like The Housing Fund, or THDA’s “Stimulus” 2nd mortgage program.
  • THDA loans are made generally to first time buyers (including people who haven’t owned a home in 3 years); the exception to this rule is when a buyer is purchasing in a “targeted” county; for example, middle TN “targeted” counties include Cannon, Clay, Dekalb, Franklin, Giles, Grundy, Hickman, Houston, Jackson, Lawrence, Lincoln, Macon, Marion, Maury, Stewart, Trousdale, Van Buren, Wayne, and White.
  • THDA essentially sets its own subsidized or below-market rates, which are dependent on how much grant assistance one might need. There are 3 basic loan types: Great Rate (0{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} assistance), Great Advantage (2{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} assistance), and Great Start ( 4{4917788a0bd7aa7369c2a945027b4fe6c9853cda4150a24fe1255b18ce3083dc} assistance)
  • since THDA loans are intended for “modest” homes, properties must meet eligibility requirements; for example, the sales price cannot exceed the county’s limit. There are only 2 limits in the whole state of TN- either $226,100 or $200,160 (these limits are actually fairly liberal by TN’s standards). The counties which have the higher limit are the following counties: Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, and Wilson. All other counties in TN fall under the lower limit.
  • the household income of the borrower(s) cannot exceed the median income limit for the county, based on the number of persons in the household; for

Modern Financial Management Theories & Small Businesses

The following are some examples of modern financial management theories formulated on principles considered as ‘a set of fundamental tenets that form the basis for financial theory and decision-making in finance’ (Emery et al.1991). An attempt would be made to relate the principles behind these concepts to small businesses’ financial management.

Agency Theory

Agency theory deals with the people who own a business enterprise and all others who have interests in it, for example managers, banks, creditors, family members, and employees. The agency theory postulates that the day to day running of a business enterprise is carried out by managers as agents who have been engaged by the owners of the business as principals who are also known as shareholders. The theory is on the notion of the principle of ‘two-sided transactions’ which holds that any financial transactions involve two parties, both acting in their own best interests, but with different expectations.

Problems usually identified with agency theory may include:

i. Information asymmetry- a situation in which agents have information on the financial circumstances and prospects of the enterprise that is not known to principals (Emery et al.1991). For example ‘The Business Roundtable’ emphasised that in planning communications with shareholders and investors, companies should consider never misleading or misinforming stockholders about the corporation’s operations or financial condition. In spite of this principle, there was lack of transparency from Enron’s management leading to its collapse;

ii. Moral hazard-a situation in which agents deliberately take advantage of information asymmetry to redistribute wealth to themselves in an unseen manner which is ultimately to the detriment of principals. A case in point is the failure of the Board of directors of Enron’s compensation committee to ask any question about the award of salaries, perks, annuities, life insurance and rewards to the executive members at a critical point in the life of Enron; with one executive on record to have received a share of ownership of a corporate jet as a reward and also a loan of $77m to the CEO even though the Sarbanes-Oxley Act in the US bans loans by companies to their executives; and

iii. Adverse selection-this concerns a situation in which agents misrepresent the skills or abilities they bring to an enterprise. As a result of that the principal’s wealth is not maximised (Emery et al.1991).

In response to the inherent risk posed by agents’ quest to make the most of their interests to the disadvantage of principals (i.e. all stakeholders), each stakeholder tries to increase the reward expected in return for participation in the enterprise. Creditors may increase the interest rates they get from the enterprise. Other responses are monitoring and bonding to improve principal’s access to reliable information and devising means to find a common ground for agents and principals respectively.

Emanating from the risks faced in agency theory, researchers on small business financial management contend that in many small enterprises the agency relationship between owners and managers may be absent because the owners are also managers; and that …