Sealey Business

One of the things I wanted to share with all of my sellers is the current state of the market. As we all know, pool routes are recession-proof, but they are not immune from market conditions.

One of the things that have affected the pool route sales side is the amount of financing available out there now. With interest rates increasing, there are fewer sources of funding for pool routes, so we noticed a decrease in the number of cash buyers recently. We are all trying to figure out solutions to what is going on. We try to be nimble and provide the most current information so you, the seller, can make the right decision based on what is going on. One of the options that we have seen that is getting a lot of traction is for sellers to provide owner financing on their route. As I said, bags have tightened up on financing, and that has affected the number of transactions for cash deals. From your receiving end, it’s a cash deal, but from the buyer’s end, they are probably refinancing their home to pull cash out of it or getting a loan from a bank to pay cash for a route. Therefore, while you are receiving cash, typically, the buyer is getting some type of loan to buy a pool route. Therefore, as the sources of loans dry up, we are seeing a decrease in the number of sales.

Last month we had sales where sellers were providing owner financing, and those things seem to be very popular with buyers since they do not have to go with the traditional route of going to a bank and trying to get a loan for that. We always look at things like, “Here’s a challenge,” but also, “Here’s an opportunity” because we are always solution-based. Typically, what we are seeing is that routes that are providing fifty percent (50%) financing and then financing those payments for two (2) years are seeing a lot of interest from buyers. That is the kind of framework that we are using for sellers that are looking to sell their route quickly.

One of the concerns that sellers have is, “Will this person pay me back?” One way to get around this is to continue billing a certain number of accounts that is the equivalent of what your payments would be. Let us say, for instance, the loan is a thousand dollars a month, so if you are billing, let us say a hundred dollars with ten (10) of those accounts, you would still be billing and collecting on it. That amount that you receive from those clients will be the payment, so it will continually flow from the customer to you and it will not flow through the buyer. That is kind of what we are recommending to mitigate the risk of no payment. Also, getting their credit report to find out what their credit score is, quite frankly, just like the bank would, gives you peace of mind on whether that person is going to pay you back or not. This tool is primarily for sellers to sell quickly.

The routes that we have offered owner financing for have sold almost immediately. We have to adjust to what the market is telling us. For your route, if you are interested in finding owner financing, please reach out to us. You can respond to me or my assistant, Mik. His email address is [email protected]. Let us know if you would like to set it up with your route. We will go ahead and update the listing and put it back on the market with the updated information. If you have any questions, feel free to reach out to me. I am glad to help and provide any guidance as we continue to try to look for different ways to get your route sold quickly.

Thank you and have a great day!

-Arif Sealey

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