The near absence of financing has caused builders and consumers to become increasingly creative in their efforts to get pools built.
From old-fashioned bartering to hard- money loans, it seems that no idea is too far-fetched for consideration.
“I’ll take a trade-in on a motor home, a boat or anything,” said Mark Ragel, president of Tucson-based Patio Pools. “It’s been kind of an unwritten rule for the last couple months: No reasonable offer refused.”
When working with barter, Ragel investigates the low Bluebook value of the item or determines what it would sell for on Craig’s List. That amount then is credited toward the pool.
For Ragel, it takes no more effort to sell these items than it does to secure a loan. “If it’s financing, I’m making numerous phone calls, going to lenders — I’m all over the place,” he said.
However, Ragel does give one caveat: Be sure to take care of all the appropriate taxes. “You have to pay sales tax on whatever the purchase price is, whether you take trade or not,” he said.
Not all forms of creative financing are so basic. If the banks won’t work with a prospective client, landscape designer Scott Cohen hooks them up with a friend who arranges hard-money loans.
Often seen as a last resort, hard-money loans are backed by collateral, usually a piece of property. They carry much higher interest rates than traditional financing and the lenders are sometimes private individuals.
“These loans are still as tax-deductible as any other home-improvement loan,” said Cohen, who is president of The Green Scene Design & Construction in Canoga Park, Calif. “And if we believe that home values will come back over the next five to 10 years, then it’s really just a temporary loan and you’ll be able to refinance at some future date.”
There is also a type of loan used by at least one customer that goes well beyond hard-money financing. Steve Toth sold a pool to a Houston-area couple who paid for it on three different credit cards.
“My customers had already put the project off for [close to] two years,” said Toth, who owns Acclaim Pools in The Woodlands, Texas. “They didn’t want to wait anymore.”
The couple arranged an interest rate in advance with the bank, and figured they could make payments of $5,000 per month.