Posted by patsears on January 13, 2004 at 21:19:03:
Thanks for the advice, Doc!
Dr. Whisler-another question-PM finder’s fees - Posted by patsears
Posted by patsears on January 12, 2004 at 11:45:55:
Dr. Whisler
I was reviewing the discussion again about paying the PM’s juicy finder’s fees in order to get alot of referrals, and was wondering if you pay these fees up front, or do you pay them over time as you get paid by the buyer? I was wondering because these fees could become significant, depending upon the selling price of the MH. For instance, if one were fortunate enough to buy a Lonnie Deal for $3500, then flip it for $9000, you would have a paper profit of $5500, of which you would be obligated to pay the PM $550 immediately (at 10%), along with the taxes, which are also due that year all at once. If you are just starting on building up your business, this could leave you cash short for your following deals. Yes? No?
Actually, now that I have written this down, it still sounds very profitable, even if I have to pay upfront! I would still like to here your thoughts on this, however.
Thanks!
patsears
Re: Dr. Whisler-another question-PM finder’s fees - Posted by Dr. Craig Whisler
Posted by Dr. Craig Whisler on January 12, 2004 at 13:01:29:
Do what you find most profitable.
I pay my first finders fee when I buy. If the mobile is a freebie pull-out I always pay later out of the money I get upon resale. I generally pay again when I sell (but not always). The PM gets less if I sell to my own customer than if he refers my subsequent buyer to me. He generally gets SOMETHING either way. I like to think of it as facilitation fee, that tends to get nearly all of my buyers approved by the park. Be careful how you word things so you don’t give the PM the impression that you think you are bribing him to do something improper, such as approving an unqualified applicant. Remenber everyone has their pride.
I don’t pay all PMs the same. Some seem happy with less. They get less. Some want more. They get more. The one who gets the most will accept it in small monthly installments as I receive it. One won’t accept any referal fee but I give her better X-mas presents than her husband does. Some are more easily motivated by gifts of certain types than cash. One PM love tools more than life itself. A $200 tool, that perhaps he couldn’t justify to his wife or budget, is worth 10 times as much to him as a $100 cash referal fee. One old lady (PM) is lonely and instead of a referal fee she just likes for me to visit for an hour or two and have coffee, homemade cookies, and listen to the 14th rerun of her last operation.
Remember, I said that this isn’t engraved on stone tablets that came tumbling down of the mountain. Each situation is slightly different. You should do you own thinking, and just make stuff up as you go along. Do whatever seems appropriate to your present opportunity. I suppose you could even offer the PM several choices and ask them which they would prefer.
The main point to remember is that I feel it is much more profitable to pay PMs very well. People work much harder for rewards that are important to them. I make much higher profits when I pay PMs well. I don’t want to have to constantly go out and beat the bushes looking for new deals. Newspaper advertizing doesn’t work well for me. Highly compensating PMs works very well for me. I used to stay up late at night trying to figure out where to get my next deal. Now the PMs do that for me while I just sleep.
Regards, doc