How to Make Money from the Katrina Disaster, & Help

[bran987]

Here is the thinking process

Sure you can go move down to New Orleans / Mississippi and make some money fixing and rebuilding. But there is a limited amount of work and tons of contractors all moving down there already.

Most of the payment for the rebuilding will be FEMA and Insurance Co.'s, who are slow payers. A ton of these little contractors don't have a million to float to their workers once they finish a job, and they will be sitting losing time idle waiting for FEMA & Insurance co's to pay them.

So you go down there and set up a factoring company, and only take paper backed by FEMA to start. Give the contractor 75-80% of the face value, and wait 3 months for FEMA to pay you. Then roll it. Margins should be very high on this work right now. The contractors will be able to get back to work faster, and everything will be rebuilt quicker.

That is a 100%+ annual IRR business opportunity for a brief time IMO. You could start it with a few million.

I don't see this rebuilding process taking any less than 2 years. Would be a miracle to do it in less time.

Thoughts?

 

[bran987]

btw, I meant start it with a few million, get a track record of repayment, then get a line of credit with a bank for tens of millions. Not just roll the beginning money of course.

I think this would be a much needed business. This is a multi x 30 billion dollar rebuilding process.

 

[WODIN]

http://www.fema.gov/ofm/market.shtm

 

[MattTheSkywalker]

Hmmm....interesting.

 

[bran987]

Hmmm....interesting.

not good?

 

[Razorguns]

Sounds interesting. Don't have the millions to start "lending" to people I don't know -- but in theory it could work. I can't see how FEMA would wait months to pay tho.

If contractors won't do the work as a result (someone's gotta pay for that material and salaries today), nothing gets built and rebuilding doesn't occur. So FEMA/Ins co's would have to figure a method to appease the builders.

 

[ZKaudio]

good luck w/ insurance for yourself (or the builders for that matter) by the time the soil is buildable you are going to have to contend with seasonal rain storms... what a mess.

 

[rsnoble-im-back]

i was just thinking of putting my smoker on my pontoon and trading sandwiches for diamonds.

 

[Devastation]

fema and most other government agencies pay a portion of the bid contract out every two weeks to the contractor and withhold 10% at the end until the job is checked for final inspection and deemed properly finished to their standard. factoring wouldn't work in that situation

 

[gotmilk]

I'm working on something like that now.

I found $120 Million from a private LLC who funds home construction. I'm working on using State of Maine retirement funds too. Even hooked up with a Mississippi based construction company with a great operating history. The more money I find, the more homes we can start rebuilding.

I'm focusing more on Mississippi though.

 

[bran987]

fema and most other government agencies pay a portion of the bid contract out every two weeks to the contractor and withhold 10% at the end until the job is checked for final inspection and deemed properly finished to their standard. factoring wouldn't work in that situation

ahhh, interesting. how'd you know that?

that 10% is called "retainage" btw, if anyone was wondering.

well, maybe for the insurance portion of it then. that is supposed to be $15 billion and I know they are slow. just poking a bit of fun at matt there.

 

[Devastation]

ahhh, interesting. how'd you know that?

that 10% is called "retainage" btw, if anyone was wondering.

well, maybe for the insurance portion of it then. that is supposed to be $15 billion and I know they are slow. just poking a bit of fun at matt there.

my dad's a contractor and i spent 10 yrs working for him. government jobs are sweet man. i'd go from making $14 an hour to $32 an hour on some jobs. i never got all of it tho lol