How I Made $3,400 on a Lease-to-Own Trailer Deal

Justin shares his first experience with a lease-to-own trailer agreement, lessons learned, and tips for other trailer business owners. He discusses structuring deals, managing late payments, and opportunities to upgrade fleets through creative financing.


Lease-to-own trailer agreements
Managing late payments and fees
Strategies for upgrading trailer fleets
Lessons from real-world trailer deals

Transcript

SPEAKER_01 0:00

What's up, guys? Welcome back to the Trailer Hustle Podcast. My name is Justin, and this is the Trailer Owners Network. I am super excited that you're here with me today. A couple of quick updates before we jump into today's episode, I just wanted to uh give another huge shout out to the Trailer Spot. Thank you for sponsoring the amazing giveaway for the giveaway trailer that we have happening right now in the Trailer Hustle app. If you have not yet joined the Trailer Hustle app, it is free. Um you can join the app for free. We just launched a brand new dashboard. There's all kinds of really cool things that are on there. Before it was, you kind of had to add your trailers and things like that to see all the features that were out there. Now on the dashboard, you could see there's a lot of things that we have already active, a lot of things, and you can see what subscriptions here you need to be at to use those things, as well as um different things we have coming, which I'm really, really excited about. So download the trailer hustle app, join these amazing giveaways, network with people all around you. I am super excited. We have um it's been growing like crazy. So, I mean, we're fast approaching 2,000 members um just since the relaunch. So thank you guys so much, and thank you to the Trailer Spouse for sponsoring an incredible car hauler giveaway uh because of us hitting 20,000 members in the trailer hustle Facebook community. Um, fast approaching 21,000 members. So thank you guys so much. Um, so I just did my very first uh lease-to-own agreement with a customer, rent-to-own, whatever you want to call it. Sorry, I woke up about 10 minutes ago and I'm trying to do this thing. Um, so it was a it was an experience for sure. So let me tell you guys how this came about. I had a customer that is a pallet runner, and I it's the best way I know how to describe what he is. And he is uh basically, you know, those guys that you see in the trucks and trailers that have just pallets loaded down like crazy, you know, just and you're looking like, how the hell do they have that many pallets on there without it toppling over? Um, well, that's what he does. And he would rent for me pretty consistently. Sometimes it'd be in my bigger trailers, maybe like a 22-footer or something like that. Sometimes it was a 16-feet foot utility. He seemed to have better luck with that just because it was easier for him to, you know, drive around with, whatever, I don't know, the deal. Um, but in any case, he was renting my 7x16 very frequently. And unfortunately, he was he's also very, very aggressive. And maybe not even him, but maybe his people that he has working for him. Um they're very hard on the equipment. And I would charge him for things here and there. And he ended up doing some, you know, real damage at one point. I was like, hey, I can't rent to you anymore. You owe me this much money, I'm not renting to you until you pay me. And I found out that he had actually burned a couple of guys in the area. Um, there's two other people that knew him by name that he had rented from that uh that he owes money to. And I told him, I'm not renting to you until you make all of us whole. Period. Not just me. And he ended up making me whole. I was happy about that. He claimed he helped everybody else out. Who knows? Whatever. Well, in any case, I started renting to him again, and some more damage happened. And I said, Listen, man, I've got a couple of options for you. Number one, I'm gonna charge you for damage and then I'm never renting to you again. Number two, you buy the trailer from me. And he said, I'll consider buying the trailer from you. Um but the problem with him and the way that his uh life is structured, he's not a paycheck-to-paycheck guy. He's a day-to-day guy, uh, from what I found out. And so he he deals his life basically in cash. Like before he would ever pay me, he'd be like, I gotta run to the bank, like you know, deposit cash to be able to rent the trailer. And normally it's a red flag, but he's been renting for me for a very long time. And whatever. He was one of the few people, because you guys know I talk a lot about being selfish with how I run this. And if people are gonna beat you up, beat your shit up, don't rent to him. He's one of the few people that I actually continue to rent to, even though I knew there was risk that my shit's probably gonna be messed up, whatever. Um, I don't remember exactly what conversation I had with myself as to why I continued renting to him after all that. I don't know. But in any case, kept renting to him. Well, he said I I could buy the trailer, but he doesn't have lump sums of cash on him. He doesn't have good credit or no credit to be able to get a loan. Um, and that's that. So I said, Well, listen, man, you know, how about I have my attorney draft up a rent-to-own agreement and we do a week-to-week thing. Because I know that you usually pay me week to week, and um, you know, let's let's do it that way. And we came up with some terms, and I the way that it was structured, what I told him was, I'm gonna sell you this trailer for what was the original price? Yeah, I told him cash price if you want to just buy the trailer outright is gonna be $2,750. And um, if you want to do month-to-month payments, we'll do it this way. You know, I I gave him all these terms, whatever, and I said that'll be $3,000. You're gonna pay me for doing the payments. And I'm gonna collect a fee, uh, $250, whatever. I said, if and and then he agreed to week to week, and I said, Well, you're gonna pay me $32.50 then. You're gonna pay me $500 in fees because it's a pain in the ass doing week to week payments with you. So that was kind of how I structured it. And maybe, maybe that's a dumb way of doing it. I don't know. That's my very first one. I'm gonna do more research on that. Um, but it worked out. Um, what ended up happening is I did the agreement with the agreement with him. He takes the trailer, he gave me a down payment of $500, which included uh $250 of the fee to start, and then the first payment. All right. And we did a, I don't remember how many payment schedule it was, whatever, but in any case, it was supposed to end like January or June 16th or whatever it was. So he takes a trailer, send him an invoice, you know, the following Monday, boom. Um, hey, invoice for 250 bucks, all the information, whatever, great.

SPEAKER_00 5:41

He paid it. Awesome, no problem. The next week, week number two, gets into Tuesday, no payment. I modify the invoice, add a $25 fee to it. And so he didn't protest for anything, he paid at the end of the day Tuesday. He paid the fee. Okay, so I already collected $25.

SPEAKER_01 6:02

Well, that happened four times in a row. So I collected a hundred dollars in lay fees from him on essentially the like, you know, three to five payments in, whatever you want to call it.

SPEAKER_00 6:14

So happened fairly quick. And then he got further behind.

SPEAKER_01 6:21

Then he went like a week behind. And or actually it was like four days, and I'm like, hey, like, I'm not gonna come pick the trailer up right now. I just need to know when are you gonna be able to pay this thing plus a late fee or whatever. And he ended up paying it a couple paying it a couple days later, and then he asked, Can you move my due date to Tuesday? Because that's when I usually get paid. I said, Yeah, no problem, I'll move your due date. That's fine. I'm not gonna charge any more if you pay on Tuesday, then we're fine. He was still late. Wednesday, Thursday, Friday, he would start paying. And so I'm already collecting all these fees off of every single week. And we get to the point where he's you know, behind. Okay, he is now like we we ended up negotiating, like, hey, can you just tack the late fees on to the end of the loan and the end of the agreement, and then I can just get these lots, you know, this week and the previous weeks caught up. I said yes, so we did that. So I carried those payments to the next week, whatever, those are the late fees to the next week. And then he got another two weeks behind. And I when I say two weeks, that means that a new payment is due, but he still owes the previous week's payment. So he owes two weeks essentially. So he's not behind two weeks, he's behind one week, I should say. And that happened when he only had two payments left. He owed me for that current day and the previous week plus a hundred dollars in late fees. And then he still only had two payments to go, two $250 payments to go, and it's his. It's done. And he wasn't responding, no, nothing. I said, Hey, I'm gonna come pick the trailer up tomorrow if you don't pay me today. Plain and simple. Okay, it's it's it's reached that point because he now owed, he he ended up getting like four days beyond that uh other payment and another late fee hit. So he messaged me back and he says, Well, hey, what can you do if I go ahead and just what's the payoff? If I just pay you off now, what's the best you can do? I said, I'll waive all your late fees if you just pay it off right now. And um, it would have been a thousand bucks. Four total payments, two fifty a piece, a thousand bucks, minus the $125 fees in fees, whatever it is. I said, I'll just waive those fees if you just pay me off now. Thousand bucks. He hit me back and said, Well, what about 900? I said, if you pay it right now, 900 it is. And I modified the invoices, sent it to him, and he paid it. So that was great. Um, and I I wasn't out of any money because I'd collected well more than that in late fees already from him. So it didn't really matter. And he got the trailer paid for all as well, his trailer now. Um, so I I'm happy about that. I ended up collecting a total of, I think it was like 3,400 bucks, something like that for the trailer, somewhere right around there, after uh late fees and all. Um and the trailer, by the way, has made me over $30,000, just so y'all know. After the cost of the trailer, after maintenance, after you know, all the fees that go into it, tires and all that kind of stuff. It's maybe over 30 grand for a 7x16, which is pretty amazing. Um, for not having it that long, not the greatest quality trailer, in my opinion, as much as I paid for it, considering it was a PJ with the removable rails and the silver fenders that are just bolted on with the two bolts. I don't recommend that trailer, guys. That's just throwing that out there. Uh, because of that reason, um, I don't like angle iron sides and I don't like uh like side rails, and I don't like the ones that unbolt. They are a pain in the ass. I know they sound cool. I didn't like them. The side removable ramps, you know, they get stolen, got stolen from him while he had it. I'm like, well, you got to pay for it if you return the trailer. Anyway, so so it's paid. Now I learned a lot of lessons from it. Um, the people that are usually going to do these types of deals, they tend to be um, I don't even want to call them irresponsible. He just maybe he wasn't earning money. I don't know what the deal was, but they usually have some type of circumstance that's going to impact y'all's business uh when it comes to you getting paid. Um, at least that's what I found with him. And I found that with him, even with just a regular rental process over the last handful of years that I've been renting to him. Um, and there's a lot of customers like him, you know. Um and he's a great person. I have no issue with him as a person. It's just, you know, it sometimes people just don't handle business the right way or they don't handle finance as well, I guess is what it is. We've all been there. Um, but this was just extreme. But in any case, back to the the main point of this um this episode, which is the uh the the lease to own agreement, whatever. I'm happy because I got a little bit more money than what I said my cash price was going to be. Just took a little longer to get it, um, but not a big deal at all. And he's happy because he was able to afford it when otherwise he wouldn't have been able to afford it. Um and also I was way more lenient with him than um I would have been or than a different company might have been. So um we ended up, I got the tag from the trailer, got my GPS off the trailer, um, signed over the title and everything to him, done deal. It's all good to go. Bill of sale, the whole thing's all filled out, ready to roll. Um, and it's just like a regular sale at that point. So that's what I did. And guys, if you're thinking about upgrading a trailer, a trailer that's in your fleet, and say you've got a customer that rents it from you all the time, this might be a great option for you guys to sell it to them and upgrade your fleet. Because if you've got a trailer that's say you've got three to five years on it, and you're like, you know, and I only had this trailer for I don't even know how long I had it, maybe two years, something like that. Um in any case, if you've got two, two and a half years, if you've got a trailer you're about to sell or you want to upgrade, and you've got a customer that's renting the thing all the time from you, it might not be a bad plan to call that customer while they've got it and say, hey, do you guys want to buy this trailer? We've got a uh a rent-to-own agreement that we can have you fill out and sign and we can set the whole thing up. We can do it weekly, we can do it monthly, we can do, you know, what bi-weekly, whatever you want to do. And by the way, if you guys need that contract, um, I had mine um attorney written, um, you know, drafted and reviewed and all that kind of stuff. Um, and it's pretty, pretty concrete. There's nothing wrong with it. It's perfect for what you need. Go to trailerhustle.com and check it out. And you can also get all kinds of other documents on there, but there's a lease-to-own agreement or rent-to-own agreement available at trailerhustle.com. Um, so go check that out. Um, but anyway, uh it's a great opportunity for you to upgrade that trailer and sell it to somebody that's already using it. They already have it. Hey, yeah, when you get a chance, I'm gonna send you an invoice or a document, fill everything out, sign it, and uh it's yours. You know, submit the down payment. Um, or wait till they bring it back or the end of the rental period that they just paid you for, or convert that into the first payment on the trailer, something like that. Um, there's all kinds of ways you can get creative. And I know that there's guys that I've talked to that have that have trailer dealerships, they get into renting, and the trailers that they rent are the trailers that are on their lot. Um, not like the ones that are for sale, they rent those. What I mean is if they carry uh Max D, for instance, or PJ or whatever, the trailers that they rent out are also Max D, PJ, whatever it is. So that way they're renting out trailers so people can kind of demo, use them, whatever before they buy one. But while they have it, they send them an email that says, hey, you know, you can buy this trailer and they convert that rental into a used trailer purchase. So there's all kinds of cool ways people do that. That doesn't necessarily have to be rent-to-own, lease to own, whatever. If you have a dealership and you have traditional finance or um whatever it is, whatever type of financing you have, then feel free to use it, of course. And and I'm sure people will. But if you are a small-time guy and you're renting, this is a perfect opportunity to upgrade, upgrade your fleets, make a little extra money on the trailer, uh, collect some fees, and you'll be good to go if you want to upgrade your fleet. Um, or if you find good deals on trailers and you want to flip them, you know, do you know be be the bank? Now it comes with this fair share of headaches. I thought I was gonna have to go get the trailer a couple of times from him when he wasn't paying. I'd rather the deal go through than me do that because the way I see it is his weekly payment is less than I can collect on that trailer um on a weekly rental. Who's to say I'm gonna rent it every single week? You know, I mean, I usually do, but um, I didn't really want the trailer anymore because it had been beat up, so that was kind of the the trick. Um, but if you're into flipping trailers and that sort of thing, hey, do it, do a lease to own with people, you know, go to trailerhustle.com, get the contract, and tailor it to your company. Um, it's um it's all editable and very easy to use. Um, but yeah, I highly recommend it. But that's that was my first experience with it. Um, you know, with with doing a rent-to-own, lease-to-own type thing. Couple of scares, a couple of times I thought I was gonna have to get the trailer, um, a handful of excuses from him as to why he wasn't paying or when he wasn't paying, whatever. Um, and uh and uh at the end of the day, it all worked out great. It kind of worked out how I assumed and anticipated it was going to work out. So um nothing with the no nothing wrong with that at all. So if you're interested in getting into that or you want more information or you want to hear any other specific details, drop the questions down below if you have a specific question on how something worked um or what issue I may have had. And I'm happy to answer any questions that come up. Um, so anyway, yeah. Um aside from that, uh guys, there's all kinds of really cool things happening right now within the trailer industry. I am super excited to bring on a bunch of new amazing companies into the fold with Trailer Hustle. We did just bring in a brand new one. Um, that is uh I'm gonna be announcing here very soon, as soon as I finish onboarding them and getting them set up. And uh spoiler alert, they are an amazing hitch company. Um, pretty much the top tier when it comes to uh trailer hitches and uh you know that kind of thing. So um you guys are gonna be uh excited to see those guys joining the group and interacting with everybody and talking about their products and about the industry and um they're a wealth of knowledge as well. So I'm excited to bring them into the fold. So, with that, guys, quick episode today. Just wanted to tell you guys quickly about how my very first rent-to-own agreement went. And uh again, drop those questions down in the comments or message me directly if you have any questions or if I can help you get started in any way. Check out trailerhustle.com, join the trailer hustle app and join these giveaways, guys. There's all kinds of amazing giveaways happening, and uh can't wait to continue networking with everybody. With that, this is the Trailer Owners Network. You guys have an amazing day. See you tomorrow.