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Old 02-24-2013, 11:36 PM   #151
JustSomeGuy
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Re: Starting Collections Agency

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Originally Posted by SebastianHalf View Post
If my debt buying company can place with my first collection agency, then have the debt unworked for a few months and then place it with my 2nd agency and THEN sell it, I get more liquidation out of it, and the resale value does not go down signicantly more than if just one agency worked it.

Why would you ever want to have it sitting unworked for a few months? The debt is just dropping in value as age increases.
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Old 03-02-2013, 01:05 PM   #152
SebastianHalf
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Re: Starting Collections Agency

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Whats the advantage of having the debt worked on by two different agencies (both controlled/owned by you), instead of just having one agency work it again after a couple of months?
Two reasons... One is that if my first agency works it again in a few months, they may feel that they already did as much as they could and not put forth the effort they should on it the second time. Collectors normally have pretty big egos that way. Another reason is so the debtors hear a different business on the phone the second time.
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Why would you ever want to have it sitting unworked for a few months? The debt is just dropping in value as age increases.
Because sometimes peoples lives change a few months later; people can get a job, or they can come into some money, or just manage to save up a little bit. It also may give time to come up with


Banking update...
1st of February business bank account was at 6909.22
1st of March it was at 18.914.84, plus I put a 1500 check that I wrote as my first paycheck in my personal account. I think I can officially say we are successful. The account started way back in September at 14,500, so We are in the black after 5 full months.

Also, one of our clients has requested that we start liquidating a higher percentage of our paper. This is going to slow profits, because we will be working every account harder and not just getting the low hanging fruit. It is great practice for when we own our own paper, and we implemented the new organization system during the 2nd half of February. Our profits will also be less going forward because Feb and March are ALWAYS the best months of the year to collect because of tax returns. I have been talking with a number of people about quitting my day job and focusing on the agency, and most of them advise me to take a full calander year to see what my average output is. Making 10k in February may translate into 2k in December... I don't know yet. That being said, I hate my day job and am thinking way to far ahead as of my business(es), so I will probably give it another 6 months before I quit my job.

I am hiring my 7th employee in the next week or 2. Our expansion will be halted for a month or two after that because we are wired for 7 people in the office right now. We will need an IT guy to come out and rewire everything in order to expand again. The office can hold a max of between 13-15 people, so he are about 1/2 capacity now.

I have had about 1/2 dozen people that I'm friends with wanting to get involved in my success somehow. A lot have offered to invest in me at this point, but I don't need it, and don't really want it. What it may mean though is that I may get into buying debt sooner than I thought... we will see....
Andy

Last edited by SebastianHalf; 03-02-2013 at 01:06 PM. Reason: clarity
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Old 03-02-2013, 01:11 PM   #153
SebastianHalf
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Re: Starting Collections Agency

Semi-related; I also went to the casino and played poker for the first time since I've opened my agency and came out +732. It was a good month.
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Old 03-02-2013, 06:10 PM   #154
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Re: Starting Collections Agency

Are you able to work all of the accounts you get or are you ranking them somehow to give certain accounts priority?
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Old 03-02-2013, 06:45 PM   #155
SebastianHalf
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Re: Starting Collections Agency

We work all of them. Obviously the higher balance ones we are a little more diligent on, but we need to liquidate a certain % of total debt given to us in order to keep the clients happy, so we can't really neglect anything
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Old 03-05-2013, 01:42 AM   #156
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Re: Starting Collections Agency

Since you are you doing small balances PDLs... whats your angle. Do you take them to court, or send letters, or just call. If you take them to court do you win most of the time. Also are you building up on payments or people just paying off these accounts? Seems like it would be hard to collect on such small accounts.
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Old 03-08-2013, 01:44 AM   #157
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Re: Starting Collections Agency

What was your starting CTC? What is it at now?

Last edited by JustSomeGuy; 03-08-2013 at 01:44 AM. Reason: cost to collect
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Old 04-13-2013, 10:29 AM   #158
SebastianHalf
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Re: Starting Collections Agency

Quick update:
We had a monster February as I posted in my last update. We had collected 59k cash in February. We slowed down a bit in March, but still made almost 5 figures profit with only 6 collectors by collecting 53k. April has been hitting a wall for us. We came into the month with 42k in post-dated checks for April, and are now only up to 46k on file for the month. Our break even number is about 36k, so we will def. make money for April, but I am extremely concerned about May. With three paychecks going out to my employees in May instead of the usual two, we are going to be pressed. My manager is being completely honest with me and saying he is pretty overwhelmed. He says that he simply can't do everything by himself and needs help, which is true. We are changing our collection strategy a little bit, and adding a dif. bonus structure. I have decided to see how we are doing and by the end of May I am either going to quit my day job and work the agency full time to help my manager, or I am going to hire another manager and take a big hit on our profitability at the agency. Hopefully it will be the former.
We are still profitable, but not enough to support myself without my other job unless we turn things around a little bit. Will update in a few weeks to let everyone know how it is going.
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Old 04-13-2013, 04:50 PM   #159
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Re: Starting Collections Agency

as someone with several years of experience in this space, i've gotta say you' picked a really bad time to dip your toe into this pond. 2003 would have been perfect. haven't read the whole thread, but if you have any questions, feel free to send me a PM
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Old 04-21-2013, 01:54 PM   #160
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Re: Starting Collections Agency

I have an idea where you could collect 100 percent of the debt. But it's too good of an idea to just give away.
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Old 05-10-2013, 06:44 AM   #161
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Re: Starting Collections Agency

Had what turned out to be a pretty decent April. Pulled 5 figures out of the place. May has been pretty decent so far. Problems have arisen though. Half of my staff has been super unreliable. I had 6.5 employees a week ago (one part timer). Yesterday I was down to four. Two of my employees had been sporadic and unreliable about coming in every day and I had been meaning to talk to them about it. Then two days ago they no call/no showed, so when they came in yesterday I told them they were no longer welcome to work. I have hired three additional people who I think sounded really good to start Monday, and I am very excited about that. I have been going after higher quality people and offering a higher starting salary, and have also implemented a bonus system.
I have also formed a new company to buy debt. That company should be finished being incorporated in the next few weeks, and then I will begin purchasing my own debt to work. I have also seen that my manager is getting overwhelmed with some of the tasks. He's super loyal and dedicated, but he just can't handle everything at once, and isn't the smartest about certain things. I had originally wanted to be open for a year before quitting my job to see what the entire year was like. However, I think that in order to take my business to the next level and to make sure that my new debt purchasing strategy takes off, I may quit my job at the end of May.
I have pulled out more than double my jobs salary from my business each of the past 3 months. If I can do that again this month, I am putting in my two weeks notice at the end of the month. I hate my job and love my business. I have also realized that my job is very highly respected in the Buffalo sales industry and having it on my resume for a year makes me very employable in most sales jobs in the city. If I happen to fail at my business I am not concerned about finding more work at this point.
I am also starting to get burnt out from working 60+ hours a week and then coming home to be be a full time dad. The price of private insurance that I will have to begin paying for is a small price to pay to be able to spend way more time with my kids and actually be able to sleep.
I will updated at the beginning of June to let everyone know if I made enough money in May to justify quitting.
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Old 05-10-2013, 06:22 PM   #162
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Re: Starting Collections Agency

Awesome update. Sounds like you are heading in an excellent direction. Are you hiring experienced employees or fresh people? I had a friend in college who got a collecting job and was pretty good at it fresh, and since he was going to college he had enough work ethic to show up.
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Old 05-10-2013, 08:39 PM   #163
SebastianHalf
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Re: Starting Collections Agency

Thanks man. I am hiring a mix of experienced and new people. It's not a difficult thing to do as long as you have a good work ethic.
On a side note, I got sued for the first time as well. I will find out how much this costs me, and find out if its worth it to quit my job still lol.
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Old 05-10-2013, 10:12 PM   #164
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Re: Starting Collections Agency

****ty part of the business.

Even if your company 100% did nothing wrong, you will still most likely be out several thousand dollars before all is said and done.
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Old 05-11-2013, 12:54 AM   #165
SebastianHalf
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Re: Starting Collections Agency

Yea, I know. It's about time for me to contact a lawyer in the first place. I should've had one by now anyway, so this may be a good thing in the long run. Will find out Monday
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Old 05-11-2013, 01:42 AM   #166
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Re: Starting Collections Agency

What's your strategy for purchasing?

Are you anticipating any big regulatory changes now the CFPB appears to be becoming more active?
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Old 05-14-2013, 10:53 AM   #167
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Re: Starting Collections Agency

Great thread. Thanks for making it. I'd appreciate any future updates you might give.
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Old 05-14-2013, 10:52 PM   #168
SebastianHalf
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Re: Starting Collections Agency

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Originally Posted by KENNYTRANPLUSEV View Post
as someone with several years of experience in this space, i've gotta say you' picked a really bad time to dip your toe into this pond. 2003 would have been perfect. haven't read the whole thread, but if you have any questions, feel free to send me a PM
I think it's a pretty decent time to dip my toe in. Obviously the regulations are stricter now, and the bottom can fall out at any time, but there is still a lot of money to be made. Debt was way cheaper in 2003-2008 indeed, but sadly I was 16 years old in 2003. I appreciate the offer for advice, and I may take you up on it! I still have a ton to learn. What have you done in the debt industry if you don't mind?
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What's your strategy for purchasing?

Are you anticipating any big regulatory changes now the CFPB appears to be becoming more active?
I don't anticipate a whole lot of changes either way to be honest. However, I am certainly not the person to ask. I have very little experience in this game to predict those things.
I will be buying debt about 12-18 months from charge off. There is a large local company that I think I am going to be buying from on a flow basis. I will work it with my own agency for a few months and I am going to try to find a second agency to place it with on contingency afterwards. I will sell directly after.
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Great thread. Thanks for making it. I'd appreciate any future updates you might give.
Thanks! I'll update whenever I can.
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Old 05-15-2013, 02:26 AM   #169
Brad Childress
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Re: Starting Collections Agency

Selling insurance to running collections agencies, you're a really good person and the world is better with you in it.
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Old 05-15-2013, 06:29 AM   #170
SebastianHalf
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Re: Starting Collections Agency

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Selling insurance to running collections agencies, you're a really good person and the world is better with you in it.
Deleted because I realize responding is useless. Hi Brad!!

Last edited by SebastianHalf; 05-15-2013 at 06:58 AM. Reason: Brad Childress is mean!!! :(
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Old 05-29-2013, 09:36 PM   #171
SebastianHalf
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Re: Starting Collections Agency

I put in my two weeks notice at my job yesterday. My business is doing well but I have come to the conclusion that if I really want to grow I need to be there full time. Working 60 hours a week was killing me and making me feel like I wasn't there for my kids.
My boss told me he understood and wished me luck. He then said I was welcome to come back anytime if things didn't work out at my business, and asked me to stay until the end of the quarter to help him try to hit his bonus. Since he was leaving the door open for me and I really like him as a person, I am staying until the end of June.
So there you have it; I can officially say that I am a business owner for a living, not a salesperson that owns a business on the side. I'm going to become bipolor depending on how each days goes on. I'll keep updating as I have time.
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Old 05-29-2013, 10:40 PM   #172
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Re: Starting Collections Agency

This thread doesnt get a lot of traffic, but please keep up with the updates, I always look forward to them. Maybe at the end of June you could do a write up of where you are at now and where you plan to go from there. I think its a really interesting business model that a lot of people would enjoy reading more about. Good luck with going full time, I think that is def the right play!
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Old 05-30-2013, 07:00 AM   #173
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Quote:
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I think it's a pretty decent time to dip my toe in. Obviously the regulations are stricter now, and the bottom can fall out at any time, but there is still a lot of money to be made. Debt was way cheaper in 2003-2008 indeed, but sadly I was 16 years old in 2003. I appreciate the offer for advice, and I may take you up on it! I still have a ton to learn. What have you done in the debt industry if you don't mind?

I don't anticipate a whole lot of changes either way to be honest. However, I am certainly not the person to ask. I have very little experience in this game to predict those things.
I will be buying debt about 12-18 months from charge off. There is a large local company that I think I am going to be buying from on a flow basis. I will work it with my own agency for a few months and I am going to try to find a second agency to place it with on contingency afterwards. I will sell directly after.

Thanks! I'll update whenever I can.
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Old 06-28-2013, 11:20 AM   #174
SebastianHalf
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Re: Starting Collections Agency

I am typing this post up from my day job. It is my last day here. My business has been more successful so far than I had even hoped. I gave a four week notice to my job at the beginning of the month in order to finish out the quarter. Today is the end of the quarter.

My business has expanded to 11 employees plus myself. We are scaling well and my manager could not handle all the new employee management by himself. I am going to be full time at my business and can't wait. I'm super nervous, especially since I haven't profited the last 2 months while I have been expanding. Our revenue has not caught up to our expanded payroll. I honestly wish that I could have stayed at my job for another month or two until my net catches up to my expenses, but I can't. Not only is my manager overwhelmed, but I am burnt out from working too much. I work 45 hours a week at my day job and another 20-25 at my business. On top of that I am a full time single father of my twin 19month old boys. It was too much.

I am excited, nervous and proud all at the same time. Excited because of my new opportunity to grow and make more and more money. Nervous because I no longer have my income from my day job or health insurance from there. I am paying 1.2k per month for insurance for myself and my kids that I wasn't paying last week. Nervous because I can still fail. Nervous because I'm in uncharted territory and my babies can't afford me to go broke. I'm proud because I came into this business last August. My journey is documented in this thread. There have been some very low lows and some highs. I came into the game with less than 15k and no experience in the industry whatsoever and actually overdrew my bank account at one point. No matter what happens from here on out I have succeeded in my eyes. I also learned that there is money out there in the world, and I'm enough of a hustler to make sure I get a piece. I'm not afraid to start over, and I'm not afraid to jump on any opportunity that comes along if I think I can make a dollar.

Thanks to all those that have followed my thread so far. I'm still going to be updating, and will answer any questions anybody has. Thanks for all the well wishes as well. I probably won't get back to this thread until tomorrow, because my children's mother took them for the night so I'm getting hammered in celebration.
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Old 06-28-2013, 12:15 PM   #175
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Re: Starting Collections Agency

good luck to you!
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