Quote:
Originally Posted by Henry17
Not something I could do myself but I am curious on where you got the 5% from? I live in a jurisdiction where consumer debt is very hard to collect on so that seems high to me for debt that has already been worked on by a collection agency. I have zero experience with the industry and you seem much better informed but I have known a decent number of deadbeats and not one has ever paid anything despite collection attempts.
do you live in Texas by any chance? Texas is by far the worst state in the country to try to collect debt in AINEC. A lot of people don't ever pay. However, if I hit 15% liquidation rate, I will be a millionaire. If one out of 10 people pay their debt, I will be making a good living. I have heard off the type of debt I am buying at 6cents on the dollar, 9% first month liquidation is average. Lots of it is collected in the second or 3rd month in payment plans, so if I can do 12% over 3 months I will be thrilled. Also, the resale value of the debt is there. The person trying to sell me the debt says 4.5 cents on the dollar is a decent retail value, so I am saying that 3cents is more realistic. So if my 15k gets 7k back after I collect 12% of it, my gross is 37k after 3 months. Subtract 15k for the original cost of debt, and that is 22k for 3 months. Subtract 1k each month for overhead costs, you're at 19k. Subtract 6k for my employee, and im at 13k for 3 months. Not a great living, but 12% liquidation for 3 months is conservative, and so is 3 cents on the dollar resale. And this is only with 2 people working. If I can have that moderate success, I will have an additional 5k for investing after 3months, and will be able to hire 2 more people and buy more debt at a cheaper rate.... hopefully
To talk about a 5% seeming high for the second collector; companies that collect prime debt normally just collect using a dialer and mail. They rarely work phones at all. They get the easiest collections without doing any real work, and then try to resale the debt in small packages for nearly the rate they paid for it. They can do it and be successful because they buy in such huge bulk. But people who buy debt already worked can do very well as well. The liquidation rate that I came to is based on people I know in the industry who have done this a long time... and friends of mine that have done it, not the people selling me the debt lol. It depends on how hard you work it etc etc. There are lots of things I don't know, but I have tried to educate myself as much as I can. All my estimates I think are perfectly reasonable, but they take the assumption that I will be competent and get over the learning curve quickly... I may be off in my estimations.
Last edited by SebastianHalf; 07-13-2012 at 10:19 PM.