Tag Archives: heavy equipment repo

Get associated with a Repo company

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Guys who have big businesses today have started with something small at one point in time. They took help of other companies and incorporated their assistance in the work and simultaneously both grew. The thumb rule of success of any business is do not do everything on your own. Allow others to be a part of your business and take their assistance. The companies whom you will share your project with will provide you the necessary resources using which you can grow and make more money.

No company wants to utilize all of its finances to buy resources when it can easily incorporate another company to get the work done and simply share the profits. This is what the Repo companies also believe in. Not many Repo companies have a towing van to tow heavy equipment. Whenever they get an assignment from any banks or financial institutions they hire a towing vehicle from someone they know and get the work done. However, not all Repo companies follow the same modus operandi. Some believe in buying the van and keep it in standby so that whenever it is needed they can make use of it.

If you are a small time Repo company and you want to grow big, the first thing is you have to develop your contacts with financial institutions that lend money for heavy equipment or trucks or you get associated with another bigger Repo company who will give you assignments as and when it gets one. They will keep their share and give you the money of the work you have done. Ideally, they will only take the money for the information they have given to you and you get the money for the entire work. However, that is still better than having no work at all.

Get into an agreement with the Repo company:-

When you are getting associated with a Repo company, it makes ample sense to first get into an agreement with them where you will define your rate to them and they will pay you accordingly. Your rates should differ depending upon the kind of work you have to do. For instance if you are assigned to tow a mid-sized heavy equipment you can accept a lesser price for that work but that certainly does not mean that you have fixed your rate on towing all types of heavy equipment. To tow big sized heavy equipment you require specialized towing vehicle and if you do not have that vehicle you may have to borrower it from someone who will bill you more for it. So mention your rates on the basis of work that you will do.

Deal with many Repo companies at the same time:-

It makes less sense to hang around with just one Repo company with the hope that they will keep you busy for the entire week or month. You need to be associated with many other Repo companies at the same time. This will let you get more businesses which will further help you to grow in a short time.

Go for repo heavy equipment to get them cheap

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There are basically two to three ways to get heavy equipment at cheaper rate. The first one is to buy used machines that was with one owner for a long period of time and then went on to other and now again getting resold to you. So when the heavy equipment changes hands the price diminishes. This was one of the scenarios. However, in the first scenario the quality of machine is not at all up to the mark and you feel that it is better that you go for something that works faster than this. Heavy equipment that are faulty are also sold at a cheaper rate. The owner of the heavy equipment for some reason do not want to spend on the fixture of the machine and therefore would like to sell it at a lesser price so that the prospective buyer can take the onus to change the parts that has ceased to work and get it up and running. This was the second scenario and it is accepted by people who have technical knowhow of the machine. Rest does not want to get themselves involved in this.

The third and probably the most accepted scenario is buying heavy equipment from banks at cheaper rate. Now the question is from when banks started selling heavy equipment. Well, they are not here to sell construction machines but are bothered about getting their money back by selling the stuff at a dirt cheap price. What ideally happens is they sell repo machines. The heavy equipment whose monthly installments are not paid and the primary owner of the machine also does not have any intention to pay the money are repossessed by the banks who then auction it so that they can make up the cost by selling it in the open market.

Are there any buyers for repo construction equipment? Well there are plenty of contractors, rental houses and construction companies who are always on hunt of such deals. They have their men working in close nexus with the guys in the repo team who informs them about such machines and when the banks will auction them. Once they get the news about the auction, they keep the money ready. They know that they have to be there with the money and bag the deal. Some contractors even have tie-ups with banks who facilitates the machines at cheaper price. They obviously take some cut from the deal. This may not be as per the guidelines of the bank but things happen and this is how it works out there.

Almost all kinds of heavy equipment can be repossessed by banks as long as they are not paid by the owner. Many a time, in order to save their machine from getting repo, people take another loan with higher interest rate and pay the dues. But that can have a strong repercussion on them as they have to end up paying more to the other lender.

Repo Heavy Construction equipment

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Have you ever wondered what happens to the heavy equipment that are not loan free and the buyer of the machine is unable to pay any further installments. Well, those machines are taken away by private repo companies and the bank sells them at a significantly cheaper rate. If you look deeply there are many people who have made good sum of money after getting into the repossession business which is also known as the repo business. Repossession need not happen on only construction equipment. It can be on your vehicle or anything on which you have taken a bank loan and are now unable to pay it off. This is how it works. After having received repeated reminders from the bank to pay the installment if you are still unable to pay the money, they get in touch with people who are into hauling of heavy equipment. The banks pay them descent money for this work. They come to your place either by letting you know that they are taking away the machine or just do this by keeping you uninformed.

Once the bank is able to repossess the construction equipment, they try to auction it in the open market where they are bound to sell it at a considerably lower price. However, they still manage to recover the money which would have otherwise remained as bad debts in their book of accounts.

If you are a person who is always on the hunt of repo machines, then the best thing for you would be to keep a constant watch on the industry websites or keep on checking the industry trade publications. Such news is published out there and many people have benefitted by making a deal there. All you have to do is locate the heavy equipment that you may need and then place your bids on it on the website. In order to ensure that the machine is in order and not wrecked, you can go for a personal inspection. Just in case if that is not allowed you can go very carefully through the description of the machine mentioned on the website. In this way you will get to know the state the machine is in and the price that you should stick to in the auction.

Once you have placed your bid and see that your bid is the highest priced one, the next important step is that you start making arrangements for funds. You need to ensure that you have the entire sum of money with you before the auction ends. It is because most of the banks demand cash immediately after the auction ends or you should be ready with cashier check. There are only a handful of banks that allow you to make the payment via credit card or allow you to make the payment after few days. Since banks are selling the machine at a cheaper rate, they expect the money immediately and do not wish to wait for days to get it.

The right way to repo heavy equipment

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Heavy equipment are usually expensive materials and not many can afford to buy them by paying hard cash. The small contractors or small construction companies usually find it very difficult to arrange money to buy equipment but if they have no other option they approach a bank or some financial institution that lends them the money to buy the stuff. Now that they have possessed the machine, the next difficult task for them is to keep on with the monthly payments and any defaults with the payments may cost them the machine. Well, the loan system works this way. You borrow money from the lender and promise to pay the entire sum along with interest at regular intervals. Till the time you do not clear off the debt, the lender holds lien on the equipment. This means that if you fail to pay money to the bank, then it has complete right and authority to take possession of your equipment.

This really sounds harsh but people all across the United States have to go through this phase in some or the other time in their lives. Having said that, no lender ever wants to repo heavy equipment and they use this as the last resort. Lenders simply want their money back with the interest amount that the borrower has committed to pay. Just in case, if they find the borrower is unable to pay the installments they try to establish contact with the borrower to check if he is going through any financial turbulence. They try to sort things out with the borrower and if they find that he is unable or just unwilling to pay then they go for the repo; which means they send the guys to tow the machine from the borrower’s place so that it can be sold a dirt cheap price to someone else and in this process they can get their money back.

The process is quite simple. If the borrower is unable or unwilling to pay the loan, the lender brings the repo guys in the picture and then they got everything to do from there. They will track the item give the notice to the borrower where it will clearly state that they are taking away the machine since he was not able to pay the debts in time and after repeated reminders when he failed to show up with the money, the lender which has the first lien on the item is finally forced to take it back. The repo guys get some money based on the kind of stuff they would be towing. For instance, if they tow heavy equipment, then they get their fee based on the weight of the machine.

Before the repo guys can tow the machine, they got to be careful that they are towing the right equipment and not the one that belongs to somebody else’s. They need to check the Serial Number and accordingly tow the machine. They also need to inform the local police so that if the owner of the machine gives a call to the police, the authorities could explain him the matter. Once they repo the equipment, they keep the stuff in their storage facility or simply hand it over to their clients.

 

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