Lost the placement over paperwork after $7,600 of furniture

Fourplex, older building, all four units plain long-term. Unit 2 came open in the summer and a corporate housing provider had called me twice over the previous year asking if I ever had furnished inventory. So this time I said yes and started furnishing before I had anything signed. That's the mistake, and everything below is the cost of it.

I spent $7,600 over five weeks. Beds, sofa, dining, kitchen, linens, a desk in each bedroom because I'd read that traveling professionals want somewhere to work. I photographed it properly and sent it over feeling good about myself.

What came back was a vendor onboarding packet. Certificate of insurance with specific limits and their entity as additional insured. W-9. A signed services agreement. Net 45 payment terms. A requirement for a 24-hour contact number that a person answers. And a housekeeping schedule with a linen standard, meaning a second set of linens per bed in inventory at all times.

My landlord policy didn't meet their limits, and my agent said moving to what they were asking for would change how the policy was written and cost more. Fine. But net 45 with my own utilities, internet, and cleaning going out on the first meant I'd be floating the unit for six weeks per invoice cycle, and I hadn't budgeted for that. I asked for net 15. They said the card is the card. I asked for a week to think and they placed the person somewhere else, which I don't blame them for. They had someone arriving.

I backfilled nine weeks later with an individual on an eight-month furnished lease at $1,725. Plain rent in that unit is $1,450. Projected corporate rate was $2,600.

Cost: nine weeks vacant at roughly $1,450 of plain rent I could have had, so about $3,000, plus $620 of utilities during the gap, plus $7,600 sitting there earning $275 a month over plain.

What I'd do differently: ask for the onboarding packet on the first phone call, a year before I furnished anything. It's a document. They'll send it. Everything I got surprised by was printed in it.

3 replies

2tylerbrooks9PassivePRO5

Nine weeks vacant to end up $275 a month better than plain. That math is why I keep circling this strategy and not landing on it. Did you consider just re-renting unit 2 plain the moment the packet showed you it wasn't going to work, and holding the furniture for the next opportunity?

2Rena Expert

The onboarding packet @cairn describes is standard for corporate housing providers and relocation management companies, and it exists because they're contractually accountable to their own client for the accommodation. Everything in it maps to an obligation they carry. The additional insured request comes from their client's risk requirements. The 24-hour contact exists because their client's employee will call at 11pm about a water heater and the provider has to be able to reach someone. The linen standard exists so a mid-stay housekeeping visit doesn't fail.

On the working capital point @tally raises, that's the right frame. Net terms of 30 to 60 days are common in this channel, and you fund the operating costs in the meantime. Size that before you commit, and don't assume terms are negotiable when the provider has a person arriving Thursday.

Two things to handle with professionals rather than by reading forums. First, whether furnished stays of your intended length change how your property policy should be written is a conversation with your insurance agent, and the answer depends on the carrier and the policy form. Second, the services agreement in a packet like that typically contains indemnity and insurance covenants that survive the stay. Have an attorney in your state read it before signing.

One correction to the framing in the original post. The $7,600 isn't earning $275 a month. It's earning $275 a month in the current use. The furniture is an asset with a remaining life you can redeploy into a placement that clears vendor requirements, so the relevant question is whether you can get onboarded within the useful life of the package. If you can, the loss is the nine weeks and the utilities. If you can't, it's the whole package.

Lost the placement over paperwork after $7,600 of furniture

3 replies