Monday, February 26, 2007

Decisions and Pressure of Starting a Business

Starting a new business while you still have a job is quite a challenge. There are only so many hours in a day to get things accomplished and prime time is usually when you are at work on the day job. We had been advertising with only one method (direct mail) because I did not want to be overwhelmed, but that single source of leads has provided us with 75% of our house buying goals already (we closed on 2 houses last week and signed a contract for a third yesterday). I suppose I could have turned one or more of these deals down, but when opportunity is staring you in the face, it's hard to turn money away.

We have tried to document everything we have done so far in a Operating Manual, so that basics are being done automatically (e.g. the direct mail campaign, the short sale packages we send to banks, etc.). But now we are entering a new phase and we need to learn new things. We learned a lot of stuff about rehabbing from Pete Youngs last week, the day after we closed the first two houses. So now I am in the process of setting up contractor accounts at plumbing stores, paint stores and other wholesale supply stores for material I anticipate we will need. Of course, these stores are only open during my normal work hours.

Last weekend I hired my 4 teenagers to clean up one of the houses we purchased (one way to get them away from the video games :) ). We hauled a ton of crap out of the house (4 large appliances, furniture, 30 bags of clothing and lots more - enough to make everyone sore). I nearly got fined for putting the trash out on the curb and had to learn about a special "pick and pay" service to haul the material away. The City doesn't take credit cards, so I have to run to City Hall and deliver a certified check during my work hours tomorrow.

The next challenge will be working with contractors. I have usually done most of the work myself. And though, quite handy, there are only so many hours in the day to work, run a side business and be a construction worker. Then there are my 4 teenagers and my wife who would like to see me. Fortunately, me wife is really into helping out, but doesn't have the knowledge to do much. The kids also have sports and other after school activities which require chauffeuring and I like to attend sports meets or plays they are in.

Besides time pressure, there is a lot of financial pressure. I need a good source of private funding to supplement what I am doing with foreclosures. I will buy the third house with hard money, but the first two were done with a conventional HELOC ,which will run dry if we don't sell our wholesale property quickly. I have to be watching my bank accounts daily to make sure I have funds to meet mortgage payments and money for rehab, as well as the dozens of unexpected expenses (like the "pick and pay" fee).

So time and money put enormous pressure on an entrepreneur. This past weekend I felt so stressed at times that every little set-back made me lose my cool. I'm sure that most entrepreneurs have gone through this, but not sure how they handle the pressure. In the past, exercise was my pressure-relief valve, but there is no time for that at the present. This puts and enormous amount of pressure on me.

I know from my past that everything takes more time and costs more than anticipated. Then there is the uncertainty of how much we will actually be able to sell our properties for. We have "data" to show what it should sell for, but are we right? Only more experience will allow me to be more confident. When you are under pressure, you second guess yourself.

I'm not sure if this post is coherent as my mind feels like mush today. Hopefully, it makes some sense and someone can identify with it.

I have already done things I hadn't done before. I'm sure I can grow into a new level. Maybe just a little inspiration will help

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