# Time for War



## Guest (May 6, 2011)

Hey fellas, and ladies,

I'm pretty low today. 

I have an A/R of approximately 112k over 90 days past due. I have approximately 90k in bad debt I should write off in addition. My operating capital has shrunk to a dangerous level. P&P work has slowed down drastically.

The main culprit is Corelogic and Cyprexx. 

When Corelogic dropped me, they basically stopped paying me anything. I made some mistakes with Corelogic that might seem absolutely crazy to the rest of you but I admit them. For Corelogic, I trusted them to pay me what I billed them through their online system. I didn't print out invoices, didnt record invoices in quickbooks, I just thought they would pay. It wasn't until I worked for them 2 years that I realized I was not getting paid in full about 20% of all jobs. How is this possible? The money was stupid good. $75 to cap a dryer vent for example. $100 to place 4 mice traps. 

Anyhow, when we got dropped, I had some time on my hands and still had access to their site and was able to re-create 12 months worth of invoices. I ruled out underpaid invoices less than $4. This total was approximately 900 invoices with small underpayments or no payment at all. Nothing over $300. Even when I was dropped, I believed they would pay me. I loved Corelogic. This represents a large chunk of my bad debt.

When this happened, I was really in oh **** mode. I knew Cyprexx was bad but didn't want to lose all my great staff and subs and they were happy to take me. The pay was literally half of Corelogic but still profitable. I was taking home $15k per month rather than 30k profit with Cyprexx.

Sweet profit eh? Profits don't equal cash flow. Cash flow is everything.

In Colorado, the time line for a lien is 4 months. I missed the deadline. Cyprexx was a giant drain of resources. Staff that were used to handling twice as much volume were working overtime to deal with their dis-organization. We couldn't ever keep up with their demands and yet their volume was half of what we were used too. I spent so much time on this, I took my eye off the Corelogic ball. I hate collections and tried hiring it out to staff who hated it as well. Bottom line, nothing got done.

For Corelogic, I'm basically at their mercy to pay me. I paid an attorney to sue them. He said this will be easy. Wanted a $1000 retainer. A week later, it was spent and he wanted more. What did he do? He said he spent all $1000 to research the company and send them a letter. I felt like I'm going to get screwed out of more money from a frigging attorney so I'm not so hot about that option. Btw, Corelogic never responded. The attorney said because of the volume of invoices, with each one so small of an amount, I could easily spend 30k on this lawsuit.

In 2006, I lost 2 lawsuits against homeowners with very similar circumstances. Our subs did a great job but were thrown off the job at the 90% finished spot. They were thrown off for reasons that right away made me feel we were going to get screwed. Both lawsuits, the judge gave us about 5 minutes to show our photographs. The defendants brought in other contractors who gave differing accounts of how complete the job was. Each case, the judge said he couldn't tell how much we completed and found for the defendant. The homeowners got paid by their insurers, but never paid us. My loss, other than the non-payment was a complete rape by my attorney for fees. I'm not a big believer in attorney's getting me money.

So that brings me to Cyprexx. Cyprexx is just flat out is confused. They have coordinators for every state, per client, per job type. So I could literally have 25 coordinators at one time. We do a job, we EMAIL them the photos, notes, and invoice to their email. This person leaves the company or transfers, all those invoices go bye-bye. We figured this out pretty quickly. We had a weekly conversation with them on collections and they would consistently ask us to re-send everything, attach original works orders etc, stuff that just took up a giant amount of time. Most would get paid. Many would languish.

Well we had a lot of new relationships and we knew in a few months, we could drop Cyprexx and rebuild with our new clients such as MCS, AIM etc. How I feel about Cyprexx (http://foothillsco.blogspot.com/2011/01/goodbye-cruel-world-client.html)

When MCS gave us preferred status in Colorado, I told Cyprexx we no longer needed them. They still owed us about 15k. To some here, that's peanuts and if I were preferred with Corelogic, I'd eat that without too much problem. But I no longer work for them and I want my damn money.

Today I'm filing 4 liens in 4 different counties on homes worth over 1 mil. I'm sending them to the banks that own them and copies to Cyprexx.

I'm also filing a lien against our first ever problem with a realtor. The guy just is clueless and I worry if he ever had authorization to hire us in the first place. 

One client told us today that if we don't alert their accounting department within 60 days of an overdue invoice, they won't pay us at all. WTF? We never knew such a rule and that's bs anyhow. It's not in our contract. They owe us about 7k past 60 days. So am I dropping this little client too? And start war with them? 

Finally, I have a lot of great clients that are nationals or regionals. They are all slow paying me. None of these are past 90 days. But I'm really really frustrated with this. I can handle when 1 does it, but when all of them, same time, 2 weeks straight. It's killing me.

Operating capital is what makes you a GC rather than a sub and me losing my operating capital is scaring the crap out of me. Having a big bank account lets you take risks, hire subs, spend less, make big money.

Many of these smaller clients; they do us no favors in terms of payment. For example, one company sends us a check only. We have to write them for what the check covered such as 20 invoices. Then we write again for the invoice numbers, AND amounts applied to each. This bs is time consuming.

It's been said many many times on this board that realtors and local banks are the best clients. They are. But your volume will never be sky high. I'm not old but I don't want to put my work boots on again and start hauling trash with a helper. That's how I started out.

Call me lazy if you want but my goal when I started was to be successful enough that I could stay in the office and manage things. Realtor/local bank only? Not a chance. At least I don't have enough in place to do so.

My saving grace, and the reason I might pitch this entire thing (P&P, maintenance) is repairs are really going well for me. I'm making more on 1 repair job than I did on the 200 grass jobs we did this week. We have about 10 repairs in the pipeline and getting lots of estimates every day.


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## Guest (May 6, 2011)

Watch the repair estimates...... You'll find that a majority NEVER get approved. 

:no:


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## Guest (May 6, 2011)

*owner mike baker*

your web said you carry the invoice until they get paid. I bet they like that. looks like they are leaving you carry it. ant that rich of them. I cant help you these opportunities come by me. Ive been terning them down I do mold clean up I take the mold job. leave the rest. two year ago a relater took 4 months to pay me. only about $5000 You dont fill it until your work slows down. I would justify it by rationalizing they payed me About $40,000 already that year. I wouldn't of made . you can let yourself be bullied like that. your still into it but how muck brain space are you going to give them in your war. you need to have a solution execute it. and get back your peace of mind.


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## Guest (May 6, 2011)

You said they all stopped paying you at the same time. I think I know why. Foreclosure are supposed to be peaking - right now. That means from here it is all downhill. 

If a company needs you in the future they have to pay - the banks no longer need you because enough new blood is coming in to the overheated REO market (always a sign of the top of a market when everybody is doing it/talking about it - just look at the growth of REO threads on here) so they're no longer paying you.

Now the only way to get paid is if they are afraid of you and from what you said they probably don't need to be. Insufficient or missing documentation etc... It's the same as working for a large construction company that stiffs a mid range player. They know you can't afford 50k in litigation over a 70k bill so they just don't pay until the debt of the job crushes the guy who performed it.


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## Guest (May 6, 2011)

This is going to be harsh. But hey, you posted on a public forum. You say you don't ever want to put boots on go to work doing manual labor, you just want to run the office. Well, you're not doing a very good job of. So what exactly do you do? You can't get paid, because you "hate collections". IT"S YOUR PH*KING MONEY. Who else is gonna do it. You have a chronic problem with clients screwing you. Or you screwing clients, I don't know. The judge found in favor of the defendent not once, but twice. You're doing something wrong. Piss poor contracts and job management at the very least, piss poor work perhaps.
Next, you're working for scumbags. This entire screwball game where no one can afford a house, people go bankrupt, the banks make more money than they know what to do with, refuse to deal with out-of-luck homeowners, then take billions of taxpayers dollars to spend on CEO bonuses, vacations, and $90,000 persian rugs, while the rest of the country goes to hell in a hand cart, then pay you $100 th set a PH*CKING mouse trap, that kind of economy is unsustainable. And all the while you sat on your ass (figuritively) instead of collecting from them. And you're suprised they screwed you? They're SCUMBAGS.


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## Guest (May 7, 2011)

A.T.C. said:


> This is going to be harsh. But hey, you posted on a public forum. You say you don't ever want to put boots on go to work doing manual labor, you just want to run the office. Well, you're not doing a very good job of. So what exactly do you do? You can't get paid, because you "hate collections". IT"S YOUR PH*KING MONEY. Who else is gonna do it. You have a chronic problem with clients screwing you. Or you screwing clients, I don't know. The judge found in favor of the defendent not once, but twice. You're doing something wrong. Piss poor contracts and job management at the very least, piss poor work perhaps.
> Next, you're working for scumbags. This entire screwball game where no one can afford a house, people go bankrupt, the banks make more money than they know what to do with, refuse to deal with out-of-luck homeowners, then take billions of taxpayers dollars to spend on CEO bonuses, vacations, and $90,000 persian rugs, while the rest of the country goes to hell in a hand cart, then pay you $100 th set a PH*CKING mouse trap, that kind of economy is unsustainable. And all the while you sat on your ass (figuritively) instead of collecting from them. And you're suprised they screwed you? They're SCUMBAGS.


You know, I'm fine with constructive criticism. I know I messed up not being diligent on collections. I have other faults too. But you lost me with the other stuff. You might have made a good point but it was obscured by the junk.

You make a judgement based on a post? You read a lot into things. Such as who is going to make my collections? Here is an answer genius, our bookkeeper was supposed to do it. We have a full time bookkeeper and I made a mistake of delegating it out. But you say I'm piss poor? I say put down the jack and coke. Tell me how you like these judgements? Your a one or two man company. You mostly don't pay taxes at all, you think your the only one doing a good job where you work and everyone else is an idiot. I have no problem with being a one or two man company, unless that person decides to tell me how to run a larger operation like it was easy. Yeah, my contract was bad, that's why fraud can happen (sarcasm). Seriously, next time, why dont' you suggest I get more business by placing an ad during the super bowl or another great idea.

I don't have to justify myself to you on how good I am. I will just say, if you do enough volume, you will have everything happen to you, including losing 2 lawsuits, that you filed, in one year.


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## Guest (May 7, 2011)

Foothills,

Unfortunately it appears to have been a "tough love" lesson. It will happen to everyone (yes everyone) in the business at one time or the other. We tell all Newbies don't outgrow your britches or the P&P business will put you or anyother contractor into bankruptcy. Understand the banks make money off of these foreclosed homes and screwing the contractor is just another money making scheme for the banks/service companies.

Also, the banks unfortunately don't care about the quality of the work....only the quality of the paperwork.....and your post is very important information for others to remember...document document document.

As others have posted "there are 1000's of foreclosures and you should be making tons of money"....Bullsh**. The reason this business has went to hell is because there are 1000's of foreclosures. The business topped out 4 years ago and is been the "race to the bottom" ever since. 

Get out when you can is my advise to anyone in the business:whistling


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