8 Easy Tricks to Improve Credit for Small Businesses

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8 Easy Tricks to Improve Credit for Small Businesses

Today we will be talking with Alex Erlich, a credit advisor and educator, about the 8 easy tricks that you can do to improve credit for small businesses. Those who know the rules and how to play the game will be in the best position to win! Let’s take a closer look! 

1. Do Not Open New Credit! 

Do not open new credit unless you have talked with a professional and they have created a step by step outline. Here at The Cash Flow Company we can help you apply for a 911 loan. This can be used to take care of items on your credit that are holding you back financially.

2. Fix Old Information.

It is important that you remove any derogatory information that is on your credit report. Now is the time to see what can be done about it and how to leverage it, especially if it’s a local bank. Something from three to five years ago that already has a zero balance, should be removed. Remember to be methodical and purposeful.

3. Fast Inquiry Removal.

Take into account all of your inquiries. If you have been shopping for money and applying for things, look into a fast inquiry removal. This can make a substantial positive impact on your credit score. If you are using your personal credit to inquire about your business, those should all be disputed as well. 

4. Build Local Relationships.

Relationships are key to a successful business. Investors need to determine which companies are having the hardest time or tightening their budget. These are the ones that will leave you behind so they can swim upstream. Oftentimes they are searching for bigger and better clients. By building local, human, real relationships, the more successful you will be.

5. Run All Transactions Through Business Account.

It is imperative that you run all of your transactions though a business account. In doing so, you will correctly paint the picture that people want to see. Whether we are talking about personal credit, business credit, leverage, banking, or relationships, we want to consider who is reading this book and what they are reading. Keep in mind that the reader’s personal experience is dictating what they are reading in the picture book that you create. 

6. Pay Cards Before Statement Cycle Closing Date.

Investors need to pay their credit cards before the statement cycle closing date. In doing so, it ensures that the utilization rate is as low as possible. This information can be found on MyFico, as well as by looking at the actual statement. 

7. Establish Business

The next step that you need to consider is whether or not you are established as a business. To clarify, a properly established business has a business license, business phone number, and an EIN. In setting up your business correctly from the beginning, it will provide more opportunities for you than you would have otherwise. 

8. Shop around

It is imperative that you shop around and find the lenders, as well as the products you need for your business. Keep in mind that there are always banks looking to expand and grow. These are the ones that will be helpful in growing your business as well.  

In conclusion.

It is important that you not only establish your business correctly from day one, but that you also work on forming positive relationships. By doing so, it will ensure that you set your business up to win. The faster you can separate your business vs personal credit, the better your personal credit score. In turn, it will also create more leverage for future growth. Give us a call! We can help guide you through this process! 

Contact us today to find out more about setting yourself up for success.

Watch our most recent video to find out more about the 8 Easy Tricks to Improve Credit for Small Businesses

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How Can I Qualify for a Loan for My Real Estate Investments?

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How Can I Qualify for a Loan for My Real Estate Investments?

Today we are going to answer one of the biggest questions that real estate investors have, “How can I qualify for a loan for my real estate investments?” Thankfully there are a multitude of products available for investors to not only purchase new properties, but to refinance as well. Whether or not you have a job, just changed jobs, or write everything off on your taxes, there are products out there for you. What are your options and how do you get started? Let’s take a closer look!

Your best loan option!

One of the most versatile loan options available for investors is a DSCR loan. A DSCR loan is only available to investors and stands for the debt service coverage ratio. How do you qualify? As long as your rental property will cover the debt, you will be able to qualify for a DSCR loan. Unlike traditional loans, a DSCR loan will not take into consideration when you started your job or how long you’ve been self-employed. Instead, the lender’s primary focus is whether or not the income from the property qualifies for the loan.

What does DSCR mean?

The debt service coverage ratio is where your property breaks even. Just to clarify, that is when the income from the property and the expenses break even. While every property has a different break even point, this is the value that lenders will be looking at to determine whether or not the property qualifies for a DSCR loan. The expenses that lenders take into consideration are the mortgage payment (including interest), taxes, insurance, flood, and HOA. For example, if your rent is $1,000, then your expenses need to be $1,000 or less in order to qualify for a DSCR loan. The best scenario would be if your rents were $1,500 and the expenses were $1,000. This would create a $500 cash flow for the property.

Find the versatility you need to succeed.

Nowadays, DSCR loans are not only for 1 to 4 unit  properties. Instead DSCR loans can cover 8 to 10 unit properties and even mixed use properties! That’s not all! There are also a lot of refinancing options available for investors who want to get cash out of their properties. Don’t miss out on this best kept real estate secret! Find the best product today that not only provides ultimate flexibility but meets all of your investment needs as well. 

Contact us today!

Here at The Cash Flow Company we are happy to run through the numbers with you to see what product is best for you. Contact us today to find out more about how you can qualify!

Watch our most recent video: How Can I Qualify for a Loan for My Real Estate Investments? 

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The Key to Creating Leverage

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The Key to Creating Leverage

Today we are going to discuss the key to creating leverage in real estate investing. Here at The Cash Flow Company, we see success from the money side because money is the key factor in real estate. In regards to the foundation of this business, it is imperative that you have the leverage you need in order to build your portfolio. What is the trick that can help you accelerate your success? Let’s take a closer look!

Taking care of your leverage.

How can people take care of their leverage on certain properties or on their portfolio? Whether there are two properties or 10 properties, it is important to create leverage over someone else. This can be accomplished by picking one property and focusing on paying it down quickly. In doing so, it will free up the equity in that property, and will provide you more leverage. 

What is the benefit to paying one property off?

By paying down or off one property within your portfolio, you can then get a line of credit or a HELOC on the property. This provides the leverage you need to invest in other deals. We have seen a number of clients who are able to invest in new deals quickly because they had free cash flow. Just to clarify, we are not talking about these clients having money in their pocket. To say it another way, by either paying off a property completely or paying it down to a lower loan to value, you create more options for leverage. How can you take advantage of this additional leverage? One of the options is a HELOC. A HELOC is a Home Equity Line of Credit. Investors can take out a HELOC on the paid off property in order to take advantage of great deals quickly and easily. 

Free up the equity and create more leverage! 

In the world of leverage, an LTV of 75% does not free up any equity. This is due to the fact that investors are paying down each property equally as opposed to paying a little more towards a single property. For example, if there was a deal available for $150K, you would not have enough equity available to purchase the property. Just to clarify, lenders will not lend over 75% on an investment property. How can you set yourself up for success and use the equity in your properties? The answer is by focusing on paying one property down faster. In doing so, you will in turn free up the equity and create more leverage. Remember, those who will accelerate in this business are those who create financial flexibility. 

Contact us today! 

Use your equity to your advantage! Do you need some guidance on where to get started? Here at The Cash Flow Company we can help you get on the path to success! Contact us today to find out more about the The Key to Creating Leverage

Watch our most recent video to learn more about The Key to Creating Leverage.

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How Interest Payments Work in Real Estate

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How Interest Payments Work in Real Estate

Today we are going to discuss how interest payments work in real estate. There are a lot of moving parts that you need to take into consideration when purchasing a property. Don’t run the risk of missing deals and missing transactions! Here at The Cash Flow Company we want to guide you through the process to ensure that you have what you need to be successful.

How does interest work?

In regards to mortgages, the biggest question is when is the interest paid when you make a payment? During closing the lender will be asking for a certain amount of interest that is collected arrears. For example, when you are making a July 1st payment, you are paying the interest for the month of June. Whether it’s amortized or interest only, lenders will collect the interest after it’s due. To clarify, the interest payment is arrears while the payment on the property is in advance.  

Interest only loans.

Interest only loans include short term loans, bridge loans, as well as fix and flip loans. When you make a payment, it will only apply to the interest of the loan. For example, if you have an interest only loan, you will only be paying the interest for the previous month. Your payment does not apply to the loan amount itself. Many chose this option so that they have more cash flow going into the business and less going toward the principal. Remember, cash is king in real estate! 

DSCR and 30 year loans.

When you make your monthly payment, you will not only pay the interest for the previous month, but you will also pay a little towards the principal as well.  

We are here to help!

Here at The Cash Flow Company we want to make sure that you have everything you need to be successful. By further understanding the lending process, you will save both time and money!  It is important that you feel comfortable with this process so you can do more deals, and make more money! Contact us today to find more about How Interest Payments Work in Real Estate

Watch our most recent video to learn more about: How Interest Payments Work in Real Estate

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Personal Credit vs Business Credit: When and Where to Start

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Personal Credit vs Business Credit: When and Where to Start

Here at The Cash Flow Company we have seen so many people become overwhelmed and confused by credit! Alex Erlich, a credit advisor and educator, is joining us today to discuss personal credit vs business credit with a focus on when and where to start. Don’t let the numbers overwhelm you! We are here to help walk you through the process!  

The importance of planning ahead!

In order to be successful in real estate investing it is important that you plan ahead. There is a common expression stating that “you should always get things before you need them, because when you most need them you’re least likely to get them.” This is especially true in real estate investing. Investors who got lines of credit a few years ago will be at a greater advantage than those who are trying to get them now. Those who apply now will need to be in a better position with their personal credit in order to be approved for the same products. 

Separating personal and business credit.

By separating personal and business credit, it will prevent further strain on your personal credit, increase loan eligibility, and create more leverage. What exactly do we mean by leverage? Leverage is how much you are eligible for and what it looks like on paper. Leverage is the King in real estate. Having more leverage allows for more opportunities, not only your business, but for your personal life as well. 

The ideal Credit Score

MyFico.com is the best place to obtain credit score information. This site not only provides an overall credit score, but it also separates scores into 40 different categories. It can be an information overload, however, by going straight to the source it provides you a cost free and spam free way to gather all of the information you need. So what is the ideal credit score that lenders are looking for? The ideal credit score range should be between 680 and 720. However, with the current economy, banks are increasing their minimum requirements to 720 and above. How do you get from 680 to 720? We can help you discover ways to improve your scores quickly to get you back in the game.

Don’t let your personal credit score impact your business success!

The faster you can separate your personal credit from your business credit, the better your personal credit score will be. We can guide you through the steps. From establishing your business, to finding the right business credit cards, and even providing a 911 loan, we have the tools to help you win.

Contact us today to find out more about setting yourself up for success.

Watch our most recent video to find out more about Personal Credit vs Business Credit: When and Where to Start

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#1 Trick that Successful Real Estate Investors Use

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#1 Trick that Successful Real Estate Investors Use

Today we are going to discuss the #1 trick successful investors use. Here at The Cash Flow Company, we see success from the money side because money is the key factor in real estate. The foundation of this business is leverage in order to build portfolios. What is the trick that can help you accelerate your success and take advantage of more opportunities? Let’s take a closer look!

Taking care of your leverage.

How can people take care of their leverage on certain properties or on their portfolio? Whether there are two properties or 10 properties, it is important to create leverage over someone else. This can be accomplished by picking one property and focusing on paying it down quickly. In doing so, it will free up the equity in that property, and will provide you more leverage. 

What is the benefit to paying one property off?

By paying down or off one property within your portfolio, you can then get a line of credit or a HELOC on the property. This provides the leverage you need to invest in other deals. We have seen a number of clients who are able to invest in new deals quickly because they had free cash flow. Just to clarify, we are not talking about these clients having money in their pocket. To say it another way, by either paying off a property completely or paying it down to a lower loan to value, you create more options for leverage. How can you take advantage of this additional leverage? One of the options is a HELOC. 

What is a HELOC and how can it help you?

A HELOC is a Home Equity Line of Credit. Investors can take out a HELOC on the paid off property in order to take advantage of great deals quickly and easily. These deals can come up in actions or on properties where someone needs to sell a property quickly. In many cases, you can get HELOCS at 70% to 75%, as long as the LTV is lower. Whether it’s $50K or $100K HELOC, you will have the money set aside for future investments that just make great sense. Just to clarify, you do not pay for the money from the HELOC unless you use it. These funds are just set aside in case you need them. The really good people who grow their wealth will be able to sit back and grab these deals quickly because they have the money to do so.

Let’s look at the numbers!

5 properties

Each  Total for 5 properties
Property Value  $200K $1,000,000
LTV (loan to value) 75% $150K $750K
Equity  $50K $250K

In the world of leverage, an LTV of 75% does not free up any equity. This is due to the fact that investors are paying down each property equally as opposed to paying a little more towards a single property. For example, if there was a deal available for $150K, you would not have enough equity available to purchase the property. Just to clarify, lenders will not lend over 75% on an investment property. How can you set yourself up for success and use the equity in your properties? The answer is by focusing on paying one property down faster. In doing so, you will in turn free up the equity and create more leverage. Remember, those who will accelerate in this business are those who create financial flexibility. 

Contact us today! 

Use your equity to your advantage! Do you need some guidance on where to get started? Here at The Cash Flow Company we can help you get on the path to success! Contact us today to find out more about the #1 Trick that Successful Real Estate Investors Use. 

Watch our most recent video to learn more about #1 Trick that Successful Real Estate Investors Use

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Loan, Mortgage, and Deed: What’s the Difference?

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Loan, Mortgage, and Deed: What’s the Difference?

Many investors ask what’s the difference between a loan, mortgage, and a deed. There are a lot of moving parts that you need to take into consideration. Don’t run the risk of missing deals and missing transactions! Here at The Cash Flow Company we want to guide you through the process to ensure that you have what you need to be successful. Remember, leverage is king in real estate, you need money to make money! Where do you start? Let’s take a closer look.

1. Loan Agreement

A loan agreement is simply someone borrowing money from another person and the agreement between them. Some examples are a promissory note and credit cards. To clarify, credit cards are an unsecured loan because there is no collateral. Unsecured loans are often available at higher rates than secured loans. Whether it is secured or unsecured, a loan agreement states how the money will be paid back, as well as the terms. 

2. Mortgage or Deed?

People have either a mortgage or a deed, depending on the state. This secures the loan, by putting a lien on a property, and in turn gives the lender rights to the property. The documentation then goes on record with the county and shows that the property has a lien on it. To put it another way, the mortgage or deed provides the collateral for the loan.  

Mortgage:In states where a mortgage is used, a judicial process is used if something happens and the property forecloses.  

Deed:A deed of trust is an instrument that was established long ago and is controlled by a trustee. This trustee is a third party who holds the instrument and in turn protects both parties. 

We are here to help!

Here at The Cash Flow Company we want to make sure that you have everything you need to be successful. By further understanding the lending process, you will save both time and money!  It is important that you feel comfortable with this process so you can do more deals, and make more money! Contact us today to find more about Loan, Mortgage, and Deed: What’s the Difference?

Watch our most recent video to learn more about: Loan, Mortgage, and Deed: What’s the Difference?

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How to retire by 65 years old

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How to retire by 65 years old

Today we are going to discuss how to retire by 65 years old! Nowadays many people are getting into real estate investing later in life because they are trying to build wealth for retirement. This additional pocket of money not only provides additional options for them, but financial security as well. Are you interested in building wealth, increasing your cash flow, and retiring by 65? Let’s take a closer look at why it is never too late to invest in real estate!

Example: Making money for later

Within three short years you can set yourself up for the future that you want! After you have purchased the properties, you can then begin to pay them off. Just to clarify, the only things that you would need to pay are the taxes and the insurance once the properties are paid off. Here is an example of how you can create the options and security you need before age 65!

Number of properties 10
Cash flow $300 (per property) or $3000 (10 properties) 
Property #1 Paid off in 5 years
Property #2  Paid off using Property #1 
Property #3 Paid off using Property #2
By age 65 You own 3 properties free and clear! 
Property #1, #2, and #3  Worth $400K each totaling $1.2 million
Property #1, #2, and #3  They bring in $2100 each per month

Supplemental income options.

First, the money that you are making off of the rental properties can supplement social security as well as retirement. A second option is to take out a new loan. This would allow you to get money out of a paid off property. Finally, you could sell a property every three years, which would get you to age 95 by just using the proceeds from the property. Keep in mind that you will have some taxes, however, it provides more flexibility and financial security in the long run. Just to clarify, once the 10 properties hit maturity, they will be $600K each for a total of $6 million! 

Start now!

It’s never too late to get started in real estate investing! Set yourself up for the future you want by building your supplemental income today. Those who do it correctly by using BRRRR will have a lot of options down the road. Do you want to learn more about setting yourself up to retire at age 65? Contact us today! 

Watch our most recent video to find out more about: How to retire by 65 years old

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Tricks for Business Credit Cards that Propel Your Business

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Tricks for Business Credit Cards that Propel Your Business

Today we are going to discuss some of the tricks that you can use to propel your business using business credit cards. Unfortunately many real estate investors have racked up a lot of debt using their personal credit cards for business expenses. The beautiful thing about a business credit card is that you often find ones that are 0% for 18 months. By taking advantage of this, you can move items off of your personal card over to your business credit card. In doing so, you will be able to help free up your personal credit while increasing your credit score as well. Are you wondering how you can get started and the roadblocks you may face? Let’s take a closer look! 

What is the biggest roadblock?

One of the biggest roadblocks that you might face when getting a business credit card is not having the credit score you need. However, many investors need a business credit card in order to improve their credit score. Don’t let this catch prevent you from getting what you need! There are a few options that could help. Improve your credit scores today by using your savings or a usage loan to pay down balances quickly and easily. Once the business credit cards are open, you can then migrate any further charges over to the new card. 

Watch out for companies who report!

Keep in mind that some lenders like Capital One report to your personal credit report, while others do not. Some  lenders who do not report are Chase, American Express, Regional banks, BOK, US bank and Vectra, just to name a few. These lenders offer really good incentives that will encourage you to do business with them. Remember to take your time and find the right lender for your needs.

Where do you start?

It is important that you go to the larger banks in order to get unsecured loans, business credit cards, and unsecured lines. These are just a few of the things that they love to do. The smaller banks on the other hand are excellent for setting up relationships with. These relationships are helpful when you are ready to bring on more rentals, or when you want to have banks help you with flips. In regards to business credit cards specifically, you are not typically able to go to the smaller banks or credit unions. Oftentimes they do not have the best rates, terms, or products compared to the bigger banks. 

What can business credit cards be used for?

Business credit cards can be used for a wide variety of things including growth, bringing on more people, office space, paying contractors, and so much more! To clarify, business credit cards allow you to spend up to your limit without penalizing you. Keep in mind that you need to manage them correctly in order to see the benefits and avoid unsecured debt that will be reported later on. Apply for a business credit card today and find the money you need to grow your business. 

For example:

Here at The Cash Flow Company we just opened a business credit card ourselves with 0% interest for 18 months. We were able to purchase software for a total of around $13K using our business credit card.  In doing so, it is helping us grow without paying the interest. 

Contact us today!

Don’t be the reason that credit card companies make good money at your expense! Take the time and do your research every year to find the best deals that will help your company grow! Contact us to find out more about business credit cards and other tricks that can help propel your business!

Watch our most recent video about Tricks for Business Credit Cards that Propel Your Business.

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Facts About Real Estate Loans Every Investor Should Know

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Facts About Real Estate Loans Every Investor Should Know

Today we are going to discuss some facts about real estate loans and what every investor should know before diving in. Don’t run the risk of missing deals and missing transactions! There are a lot of moving parts that you need to take into consideration. This includes working with a mortgage broker and banker, as well as understanding what a loan is and what you owe. Here at The Cash Flow Company we like to go through the process to ensure that you have the leverage you need to be successful. Remember, leverage is king in real estate, you need money to make money! Where do you start? Let’s take a closer look.

Basics of a loan:

  • Loan Agreement

A loan agreement is simply someone borrowing money from another person and the agreement between them. Some examples are a promissory note and credit cards. To clarify, credit cards are an unsecured loan because there is no collateral. Unsecured loans are often available at higher rates than secured loans. Whether it is secured or unsecured, a loan agreement states how the money will be paid back, as well as the terms. 

  • Mortgage or Deed

People have either a mortgage or a deed, depending on the state. This secures the loan, by putting a lien on a property, and in turn gives the lender rights to the property. The documentation then goes on record with the county and shows that the property has a lien on it. To put it another way, the mortgage or deed provides the collateral for the loan.  

How does interest work?

In regards to mortgages, the biggest question is when is the interest paid when you make a payment? During closing the lender will be asking for a certain amount of interest that is collected arrears. For example, when you are making a July 1st payment, you are paying the interest for the month of June. Whether it’s amortized or interest only, lenders will collect the interest after it’s due. To clarify, the interest payment is arrears while the payment on the property is in advance.  

Interest only loans.

Interest only loans include short term loans, bridge loans, as well as fix and flip loans. When you make a payment, it will only apply to the interest of the loan. For example, if you have an interest only loan, you will only be paying the interest for the previous month. Your payment does not apply to the loan amount itself. Many chose this option so that they have more cash flow going into the business and less going toward the principal. Remember, cash is king in real estate! 

DSCR and 30 year loans.

When you make your monthly payment, you will not only pay the interest for the previous month, but you will also pay a little towards the principal as well.  

What to expect during closing. 

When you go to closing they will give you a settlement statement. It will list all of the charges that come with purchasing a property. The charges will include the real estate, title, lending, down payment, as well as any additional expenses. For example, on a $100K loan, you will need to bring $20K, plus any additional money that is needed to close the transaction. Don’t run the risk of being surprised at closing! Get the numbers upfront and make sure that you understand everything a few days beforehand.  Here at The Cash Flow Company our main goal is to make things as easy as possible by focusing on the human to human aspect. Is there a property that you are interested in and want to run the numbers? Contact us today to see if it is a good investment for you! 

What happens when the lien process is ending?

In looking at a fix and flip property, loans are typically a short term loan that is a 6 to 9 month term. A lien is placed on the property as collateral for the loan. Once the property is ready to sell, the investor will go to the title company for closing. The title company ensures that both parties get what they want and that all paperwork is complete. This third property reaches out to us as a lender and requests a payoff. After the lender is paid off, the title company will then make sure that the lien is released and ownership is transferred to the new buyer. 

What is a cross-lien?

A cross-lien is when you use a loan, but have to lien two properties because there is not enough equity in one property alone. Just to clarify, you can have a loan with two mortgages or two deeds attached to get enough collateral for the loan you need. The liens on both properties are released by the title company once the loan is paid in full.

We are here to help!

Here at The Cash Flow Company we want to make sure that you have everything you need to be successful. By further understanding the lending process, you will save both time and money!  It is important that you feel comfortable with this process so you can do more deals, and make more money! Contact us today to find more Facts About Real Estate Loans Every Investor Should Know.

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