Week 62: Cash-flow Quandary

Hi everyone and no more CRM talk for now I shall update you when my customised account is all up and running but in the meantime it's back to business as usual. This week it’s all things money and related. Ever heard of the term;

‘Cash is King?

This is very true. My mentor helped clarify this for me and said liquid cash is a must. At the time I didn’t quite understand what he meant but he explained; if I was to go to a restaurant for a meal how would I pay for the product/service received? ‘Well card or cash of course…’ he replied yes, but had you told the manager you own a buy to let (BTL) portfolio worth 10 million this won't necessarily pay for the bill as the cash is not liquid (free-flowing) and tied into the house. I quickly realised what he was saying. Property is long-term as in the equity I will create I won’t be able to use right now. Again, my current renovation I have been ploughing in money from the very start from purchase right through to completion but won't get paid until after a nine month cycle. 

For example three months to purchase the house, 6 months to renovate then another 3 months to resell. So what am I to do during this nine month period? I clearly need to re-think my strategy and make some decisions. I might need to start thinking about other projects which perhaps give me a quicker return so I can use the money now and not say a year down the line. As a business my bills and overheads still need to be paid. I still need to think about processes, improvements and organic growth. 

All these elements cost money, so there you see cash is king. For my next project I might need to look at a couple of small scale projects which I could flip and put back on the market a lot faster than my current project. Hopefully, any rent collated will inject cash-flow into the equation as I am skint and in dire need of cash. Forget the name Opulent (my company name) at the moment I am as far from this as one can be. 

This week we had to swallow our pride to ask yet another family member for subsistence towards the project. Whilst our primary needs are met (for now), and with the ever increasing costs of renovation the fine line between plentifullness and poverty is sure to be crossed. I can feel my insomnia kicking in as these invoices are coming in thick and fast. We’ve maxed out our credit cards, overdraft facilities loans and various credit accounts. The only thing that is left is to call the bridging finance company to come out and do their assessments. Thing is, each time they make a visit we have to pay a £500 fee for an asset manager to come out to review the work before they can release some funds to carry on with the rest of the project. 

You only get to understand the depth of bridging once you’ve made the commitment. Every penny counts so by borrowing a little extra in order to prevent the £500 fee then why not? But trouble is those involved start to worry and become resistant to giving more cash as they’re afraid that you could lose their money, so it's a vicious circle. So far we have been handling our debt by paying one card with another, tapping into wages which really should be used for personal matters and spreading the costs across multiple credit accounts. 

‘You just gotta do what you got to do’...

Anything to keep head above water, your survival instinct will soon kick in. In the midst of all this crisis; 

I just have to find a way to remain poised and placid…