Credit usage: business credit cards vs personal credit cards

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Credit usage: business credit cards vs personal credit cards

The majority of investors today are struggling with their personal credit score. This is due to the fact that they are putting business expenses on personal credit cards. How can you make things easier, faster, and cheaper? The answer is making the switch to business credit cards! This is a simple step that every investor should be taking to alleviate future strain on their personal credit score. By having higher credit scores, investors will in turn have more leverage to grow their business.  We can help guide you through the migration to business credit cards. 

First let’s look at Personal Credit Cards 

High credit scores are important for investors because it creates the leverage and funding they need to grow their business. Almost every investor runs up their personal credit card balance, by putting too many business charges on them. Thus, jeopardizing their personal credit score because of the high credit utilization rate. For personal credit cards, MyFico only allows for a 20% utilization rate before it impacts your credit score. However, business credit cards do not have the same restrictions. Instead, you are able to use the entire credit limit without having to worry. In having better credit scores, it opens the door to endless possibilities that will create wealth.

Next let’s look at Business Credit Cards 

Switch to business credit cards today! Business credit cards are the most important thing that investors can do to ensure success. They not only provide funding, but also the leverage required to create further growth. Many investors have heard of corporate credit and have taken the steps to get started down that path. Unfortunately, this option results in years of hard work and multiple steps before any progress can be made. Business credit cards on the other hand, are quick to set up, extremely flexible, and most importantly they will not impact your credit score. Eliminate the cash crunch by separating your personal credit from your business.

Get on the right track today!

By using personal credit cards for business expenses, you are jeopardizing your credit score and endangering the success of your business. Do not join the 80% of real estate investors who fail. Make the switch to business credit cards as soon as possible! We can help guide you through the entire process from setting up your business correctly, to researching credit cards, and can even provide usage loans to get you back on track.

Watch our most recent video to discover more about the importance of business credit cards and how we can help guide you to success.

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Don’t Let Bad Credit Scores Rob You!

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Your credit score is powerful. But bad credit scores can take you from making it big to losing a lot of money.

Especially in the real estate industry, credit scores play a huge role in the success of your investing. We see many investors (especially ones who are new to the game) struggle with some common issues:

  • Forgetting to pay bills on time
  • Overusing credit cards
  • Not using enough credit

Cultivating and maintaining a healthy score is a fine balance between creating debt and paying bills.

What Can I Do About Bad Credit Scores?

This is where companies like us or Hard Money Mike come in.

If your score has dropped because of late payments, the best way to fix that is simply time. However, if it’s low from over-usage, you have some options!

Usage Loans

So long as you are paying your bills on time and have a small amount of debt that keeps your credit score active, you can fairly easily raise your credit score with a usage loan.

We offer emergency usage loans here at The Cash Flow Company to raise your score FAST.</span>

Business Credit Cards

If you’re using personal credit cards for business-level investing, it’s time to re-evaluate. 

Real estate investing simply requires more usage than personal credit cards are designed to reward. Business cards, on the other hand, typically like higher usage.

If this is new to you, we have many resources to help you find the right business card for you.

 

Read the full article here.

Watch the full video here:

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This is the #1 Roadblock in Real Estate Investing

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This is the #1 Roadblock in Real Estate Investing

It is incredibly easy to get burnt out as a real estate investor. However, by knowing the roadblocks ahead of time, you can avoid many of the common mistakes. Real estate investing, unlike other businesses, relies heavily on leverage and funding. Almost everything we do from buying and holding rentals, to doing flips, and even dividing land, it is all heavily dependent on funding. Money from banks, private lenders, or even other people’s money, are vital to your success. So what’s the #1 roadblock in real estate investing? The answer is not understanding your cash flow and not knowing the numbers ahead of time.

Rushing to obtain generational wealth

Unfortunately, people go to conferences and get hyped up to make generational wealth in a short period of time. While you need emotions to guide your business, it is important to take a step back and know your numbers before diving in. Generational wealth is difficult to achieve in a three month period, however a three year timeline is feasible. By not rushing into investment opportunities, it allows you to form a game plan for success.

Understanding all of your expenses

This week we had a person contact us who didn’t understand how escrow worked, thus creating further financial strain for the client. Escrow can be very confusing for investors. This is a portion of the loan that a lending company puts aside for repairs to the property. Many people do not fully understand how much money is needed up front in order to start the construction process. In addition, many underestimate how much the interest will be every month for the property. If you have a $400K loan, and you’re at 12%, you will in turn pay $4K a month out of your pocket. Thankfully the title company provides a settlement statement that includes a complete breakdown showing exactly what you are buying, and what you owe to everyone. By fully understanding your budget and planning for expenses, you can avoid spiraling debilitating debt. 

Do your research and plan ahead

Investors who do not know their numbers will soon find themselves in a spiral of financial distress.  Not only that, but by not having enough money to make payments it will result in pure panic and overwhelming desperation. Many investors attempt to resolve this crisis by using personal credit cards, or a HELOC to get back on track. In doing so, they put their whole life into jeopardy. People can make a lot of money at this, and there is a lot of money to be made. It is imperative that you know your numbers, take emotions out, and do your research before diving in. People tend to overestimate what they can do in a few months, and tend to underestimate what they can do in a few years. 

Watch our most recent video to find out more about the #1 Roadblock in Real Estate Investing.

Want more information on real estate investment roadblocks or have any other questions? Contact us today! 

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Empower Your Business: Business Credit Vs Personal Credit

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Empower Your Business: Business Credit Vs Personal Credit

Alex Erlich, a credit advisor and educator, is joining us today to discuss the ins and outs of what real estate professionals and other companies are struggling with in this current economy.The main focus for today’s conversation is the importance of leveraging business credit vs personal credit. Credit and debt are not equal in any shape or form, but we have to play the game to win it. Knowing the rules of how to play will get you in the best position to win! Whether it’s the credit card game, credit game, or the leverage game, you need to create a leverage profile. Let’s take a closer look to discover what you need to not only establish your company, but ways that can set you up for success.

How to leverage business credit instead of personal credit?

So many people are putting business expenses on their personal credit. Unfortunately that is not as efficient as one might assume. 70-80% of clients are overextended on projects, and have maxed out their credit cards. Thus making it extremely difficult to be approved for additional loans moving forward without further impacting personal credit scores. In order to prevent this landslide, we need to approach business expenses more professionally and keep everything business focused. In doing so, it will prevent further strain on your personal credit, increase 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.  

How do we turn the focus from personal to business? 

First and foremost individuals need to acknowledge that they have a business. Surprisingly, many business owners don’t consider themselves to be entrepreneurs. From relators, to contractors, and everyone in between, they typically consider themselves to be employees of the overwriting company. However, this mindset needs to change! They should not only view themselves as entrepreneurs, but also a representation of the brand. Another component that should be evaluated are items on your personal credit that need to be removed. This will in turn prevent you from personal liability as you continue to grow your business.

What is another problem that business owners have to navigate?

The quick and simple answer to this question is social media. The majority of info is on TicTock, Twitter, and even on reals. Even though not all of it is bad information, it’s not always complete information. It is imperative that any information found on social media should be researched further. In regards to credit score expectations, there is a lot of misinformation on the internet as well. Do your research and always seek out support from professionals if you have questions.

Where do you go for correct credit score information?

 MyFico.com is the best place to get not only basic credit score information, but specific scores that can impact you differently depending on what you are needing them for. It can be information overload with 40 scores available, however, by going straight to the source it provides you a cost free and spam free way to gather all of the information you would need to make a financial decision. Ideally you should have a personal credit score of 680 to 720 in order to qualify for various lending options. Ultimately it is better to be at a 720, but how do you get there? Here are the top 4 things you can do to make your personal credit score improve quickly.

First:

Do not open new credit unless you have talked with a professional and they have created a step by step outline. At The Cash Flow Company we can help you apply for a 911 loan instead to take care of the one or two items that are holding you back financially.

Second:

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. Be methodical and purposeful.

Third:

Take into account 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. 

Fourth and final:

Relationships are your key to a successful business. 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 in search of bigger and better clients. By building local, human, real relationships, the more successful you will be.

Personal Relationships

In working with real estate investors, realtors, and contractors, a lot of what we enjoy doing is working human to human. In forming that connection with our clients, we are able to focus on how we can make them better both as a person and as a company. They are all unique and don’t all need the same things. For one client they may need a little rearranging to raise their credit score, while others could require a longer process to get back on the right path.  By forming personal relationships with local banks, you are more likely to be approved for lines of credit, credit cards, or loans that can in turn grow your company. Another benefit to going local is that regional banks or smaller banks, don’t have the same guidelines as the big banks. They can do “make sense deals” when they make sense. 

Getting started is daunting! Here is what you need to get in it to win it.

  1. Make sure personal credit is setting you up for success. Identify and separate business credit vs personal credit to get your credit score back on track. 
  2. You need to decide what the business is and it’s subcategorization. Banks will look at the NAICS to determine what industry you are in, as well as the subcategorization when you are applying for business funding.
  3. How do you select a name for your  business? Will there be a parent company? 
  4. Establishing the company properly through the secretary of state, applying for an EIN, applying for a business license, and opening business accounts for expenses. Setting this up correctly will ensure that you are seen as a business not only to lenders, but to clients as well. 
  5. Be very clear with your goals! Where do you want to go with your business, how many properties do you need, do you need to buy machinery? All of these goals need to be established first and foremost when starting your business. 

In conclusion, it is important that you are establishing your business correctly from day one and forming positive relationships that will set your business up to win. The faster you can separate your business vs personal credit, the better your personal credit score will be, and will in turn create more leverage for future growth. All the little tricks will get you there! We can help guide you through this process! 

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

Need more tips and tricks? Watch the full interview with Alex Erlich

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Take the Fast Track: #1 Lesson I’ve Learned in Real Estate Investing

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Take the Fast Track: #1 Lesson I’ve Learned in Real Estate Investing

Over the past 23 years, I’ve helped thousands of people navigate and conquer real estate investing. Looking back, there are a number of things that I would do differently to not only simplify the process but put me on the fast track as well. While there are five valuable lessons, I would like to share with you, one in particular will make a significant impact on your real estate investing venture.

How to Take the fast track

Don’t try to reinvent the wheel! Find systems and people who have worked hard and copy them. Look at what they are doing, what their systems are, and what they are looking for, as well as what they are avoiding. Discover exactly how to win by exploring what makes sense for your investments and what doesn’t. There is so much noise out there! You want to make sure that you are watching the people who are doing great and ignore those who are just talking about doing good. Here are the top three things that you need to get on the fast track!

Properties:

A valuable lesson that every fast-track investor needs to learn is how to find good properties. Find and look at as many good properties as you can.

Funding:

The most important thing as a real estate investor is leverage and using other people’s money. Funding is available through banks, lenders, or individuals.

Put together a good team:

It is vital that you partner with good contractors, knowledgeable realtors, stagers, and property managers. By putting the whole team together, they can support you by knowing what you are looking for as well as what they can or can’t do.

How can we help you?

Our goal is to make you successful! There is no need to start from scratch and struggle along the way. By researching and following what others have done, you can quickly and easily set your business up to win. 

Watch our most recent video to find out more about these 5 valuable lessons. 

Have more questions on how to get started with your business and how you can win in real estate investing? Call us today! 

 

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Credit Score 911 How to Qualify for a Utilization Loan

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Credit Score 911 How to Qualify for a Utilization Loan

A utilization loan, or 911 utilization loan is useful for both flippers, as well as real estate investors. Unfortunately, not everyone can qualify for a 911 loan, but it is available to those who pay their bills on time and need to quickly raise their credit score. Many of the clients we see get stuck in the trap of using their personal credit cards for business expenses. This in turn can have a significant impact on credit scores in the long run. There are three things that we look for to determine if you qualify for a utilization loan. Let’s take a closer look!

First, make sure payments are on time.

This loan is ideal for clients who spiral into personal credit card debt from using their cards for business expenses. The most important requirement to qualify is that they have been paying on time every month. If you haven’t been paying on time, then you will need to get back on track in order to be considered.

Second, have something to secure the loan with.

We are an asset-based lender and require a piece of real estate to secure the loan. We want to not only ensure that we have the security for lending, but that you also have leverage for your next step.

Third, how do you pay a usage loan back.

In using the 911 loan, you are able to increase your credit score. Which, in turn, allows you to get your next loan, qualify for a refinance, purchase your next flip property, and so much more! However, it is important that you think ahead about how to pay off this usage loan once you get back on track. This can be done by either getting cash out or using a HELOC to pay us off. 

Is a usage loan right for you?

We have a client for example with 200K in credit card debt who is paying 6-7K per month now. By doing the 911 loan, we were able to cut their debt in half to 3K per month in credit card payments. Another client was able to raise their credit score 12 points and receive a HELOC. While someone else was finally able to qualify for a SBA loan. Again, this is not a long-term loan! This is a 911 loan that will help get your credit score back on track and provide the leverage you need to be successful.

How can we help you?

Not sure if you would qualify for a credit utilization loan or where to go next? We have resources that can help guide you through the process. It only takes about 10 to 15 minutes to run through the information and see if we can help. After that, we will also help to set things up correctly to ensure you aren’t faced with these issues again. 

Before reaching out, there are a few things you can do to see if this is the right move for you and your business. 

  1. Go to MyCredit, MyFico or another credit website to run a simulator. This will show how your credit score is impacted once you pay off certain debt.
  2. Look at your payments and leverage. Are you paying everything on time, and do you have a real estate property that can be used to secure the loan?
  3. How can you get out of it in less than 12 months? You need to have a way to pay off the 911 loan in a short period of time. 

These are good loans for real estate investors who are trying to get credit card payments paid down. So many people go into credit card debt, and it can take a year or two to recover by paying them off as they build. It’s easier however, to pay 8-10% interest on a HELOC then 29% interest on a credit card. 

Watch our most recent video or contact us today to see if you qualify for this quick fix, so you can enjoy investing in the future! 

Go to our website to fill out an app and set up an appointment to discuss more. The more information you can give us, the more we can do to get you back on track! 

 

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Boost Credit Scores Overnight With 911 Loan

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Does your credit score need some CPR? We have a 911 loan that can boost credit scores overnight.

In the current economy, credit scores are one of the primary determiners in whether or not you get a loan. Previously, there were more loans available for people with lower scores. More flexibility meant a larger safety net.

However, currently people with low scores are struggling to find loans.

If you do manage to get a loan, your credit score will likely affect your rates, terms, etc. 

Essentially, a good credit score can make you money. But a bad credit score can burn a hole in your pocket.

What is a Credit Score 911 Loan?

A Credit Score 911 Loan essentially comes in and pays off your credit card. It moves that balance to a non-reporting loan.

This lets your credit score skyrocket the moment the next report is processed.

This loan also moves quickly. We can work through the process efficiently on our end, meaning you could see results in as little as two weeks.

Should You Get a 911 Loan?

If your credit score needs an overnight boost, the first thing to do is figure out why your score is low. 

Typically, it’s due to one of two reasons:

  1. You haven’t paid on time
  2. You have a usage issue

If you haven’t paid your bills on time, then unfortunately, there isn’t a quick fix. You’ll just need to heal your score slowly over time.

However, if you have a usage issue, then you’re in luck!

Credit Usage Explained

Credit usage measures the percentage of your total allowed balance you use each month. 

For example, if your usage limit is $10,000, and you’re frequently using $7,000 of that, you have 70% usage.

Ideally, FICO wants to see you using about 20%-30% of your available credit. Any higher than that, and you become riskier for banks.

Especially when you’re beginning as a real estate investor, it can be so easy to rack up the usage: getting supplies at Home Depot, paying contractors, etc. with your personal credit cards.

When that usage percentage goes up, your score goes down.

When your score goes down, your costs go up.

That’s where a Credit Score 911 Usage Loan comes in to pay down that debt and boost credit scores overnight.

What’s Next?

If you’re wondering if a Credit Score 911 Loan is right for you, what steps should you take?

  • Look at sites like Credit Karma or TransUnion. See where your score is at, and run simulators to see what would happen if you paid off certain credit cards.
  • Consider the qualifications for a 911 loan. Are you paying on time? Do you need to fix the problem quickly?

If you’re ready to take the next steps or have questions, reach out to us at Info@TheCashFlowCompany.com. 

We’re always happy to talk you through a 911 loan, how it can pay down debt, and how you can set up your business to avoid this problem in the future.

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Are You Making These Common Real Estate Investing Mistakes?

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Are You Making These Common Real Estate Investing Mistakes?

There are a number of common real estate mistakes that investors are facing. These mistakes occur when buying and holding rentals, flipping properties, and dividing land. Nowadays, these common real estate investing mistakes undoubtedly create frustration and can lead to defeat. With this in mind, let’s take a closer look at the five major roadblocks to make sure that they don’t affect you!

First, Cash Flow 

The first mistake that real estate investors make is immediately purchasing a property before evaluating the cash flow. To put it briefly, you want to make sure your profits are in fact greater than your expenses. Avoid this mistake by making a plan and know your numbers upfront! 

Second, Understanding Escrow

The second mistake is not understanding escrow, let alone what is needed to receive the escrow funds. Escrow is a portion of the loan that a lending company puts aside for repairs to the property. By understanding your lenders policies, you can optimize your profits by completing repairs quickly and correctly. 

Third, Too Many Projects

The third mistake is having too many projects. From multiple property costs to paying contractors, investors can get too big too fast. It is important to “err on the side of caution” to prevent the “finance crunch” that often occurs. 

Fourth, Rentals

The fourth mistake is not properly navigating rental cash flow. The deal needs to be a positive investment not a negative one after considering all costs. In real estate investing, you cannot afford losses or simply break even.

Fifth, Personal Credit Usage

The fifth and final mistake is the misuse of personal credit cards for business expenses. If you want to avoid spiraling into debt, then quickly set up your business and begin using a business credit card. 

By understanding these common real estate investing mistakes, you can ease your frustration, prevent a finance wall, and learn how to create a constant cash flow.

Watch our latest interview to discover more about the 5 Major Roadblocks

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Understanding the Credit Score 911 Loan

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If you’re struggling with a low credit score, a 911 loan could help you get back on track!

A Credit Score 911 Usage Loan is essentially a non-reporting loan that pays off all credit cards, allowing your credit score to shoot upwards.

These loans act as a fast-acting antidote to your credit score usage problems. The next time your credit report generates, you should see significant improvement.

Essentially, it’s a quick fix for people who pay their bills on time.

Who Should Use a 911 Loan?

If your credit score is weighed down by a long history of late payments, this loan is not going to help you very effectively. 

These loans are perfect for people whose credit has been plagued by high usage, who need to fix their credit score FAST.

In short, here’s what you should know about a 911 Usage Loan:

  1. 911 loans pay down debt that accumulates through usage issues, not late payments.
  2. We’re an asset-based lender, so make sure you have some real estate to secure your loan.
  3. You need an exit strategy. We want to make sure you have a way of paying that loan back.

Real estate investing is a fast-moving business. It’s important to have a quick solution for an issue that could otherwise cost you thousands of dollars in higher payments or declined deals. 

How Long Before it Pays Down my Debt?

We call this a “Credit Score 911” because we understand that a low credit score can be an emergency need.

It can take as little as 2 weeks (or up to 30 days) to get this loan and see results in your credit score. The timing depends simply on when your credit cards report and when your statements come out.

You still owe the money, but now you owe it to a non-reporting entity.

Although it can be daunting to take out an unexpected usage loan, a delay of a month is far better than a long term delay where you can’t refinance or buy.

 

Read the full article here.

Watch the full video here:

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5 valuable lessons learned in real estate investing

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5 Valuable Lessons Learned in Real Estate Investing 

In the past 23 years, I’ve helped thousands of people become successful in real estate investing. Looking back over those years, there are several things that I would do differently to not only make me successful but also, ways to do it quicker. There are 5 valuable lessons that I’ve learned and want to share with you about real estate investing.

1. Take the fast track

Don’t try to reinvent the wheel! Find systems and people who have worked hard and copy them. Look at what they are doing, what their systems are, and what they are looking for, as well as what they are avoiding. Discover exactly how to win by exploring what makes sense for your investments and what doesn’t. There is so much noise out there! You want to make sure that you are watching the people who are doing great and ignore those who are just talking about doing good. Here are the top three things that you need to get on the fast track!

Properties:

A valuable lesson that every fast-track investor needs to learn is how to find good properties. Find and look at as many good properties as you can.

Funding:

The most important thing as a real estate investor is leverage and using other people’s money. Funding is available through banks, lenders, or individuals.

Put together a good team:

It is vital that you partner with good contractors, knowledgeable realtors, stagers, and property managers. By putting the whole team together, they can support you by knowing what you are looking for as well as what they can or can’t do.

2. Times VS Time

The question that all investors ask is, how long does it take to be successful? Success is heavily reliant on the number of times you practice evaluating properties, as well as exploring your lending options. The more you practice and look at properties, practice and comp out a property, and reach out to lenders, the more knowledgeable and confident you will become. It takes 100 times to walk through these steps before an investor becomes confident in the process. Some investors can achieve this in a week, while others may take 6 months to 6 years. Again, it’s not the amount of time it takes to be successful, it’s the number of times you practice.

3. Set your business up to win 

You must set up your business correctly from the beginning. To do this, make sure that your business is properly set up with the state, has a bank account, and has an office location. Every correct step will ensure that the business is set up to win the leverage game. One of the most important steps in this process is selecting your business name. Avoid putting “real estate” directly in your name because it will impact your funding moving forward. Instead, you can use “management”, a name, or a group in order to make your business name unique.  Once everything is established, find local banks that love to work with real estate investors. While national banks are great for unsecured lines of credit and credit cards, it is the local banks who will partner with you long term.

4. Create simple processes

Investors can easily become overwhelmed by all of the components that need to be considered before purchasing a property. By walking through the steps over and over again, it makes it easier to not only set up a simple process for yourself but then allows you to hand things over to others. Begin to find people who can support you and follow your established processes. You must ask yourself:

  • How do I comp out a property?
  • How do I walk through a property to see what needs to be fixed or repaired?
  • How do I pick a contractor?

5. Scale with flexibility

To add volume to your investments, you must bring in more people. However, these individuals are not on the payroll. More importantly, their partnership and expertise can guide you on the fast track to success. From having real estate agents help comp out properties, to bringing in more wholesalers, this can help you win with flexibility with your scalability. As long as you have your systems established, there is no ceiling to your success.

Bonus

6. Do whatever it takes

You must do whatever it takes to get you to where you want to be. Only you can determine what that means to you. Identify what you need to do upfront, and just do it! If you get into that mentality, you will be able to navigate the road to success within your market. The people who have the “do whatever it takes” attitude will not only win in this market but in every market thereafter!

Our goal is to make you successful! By following these 5 valuable lessons in real estate investing, you will be on the fast track to success! Watch our most recent video to find out more about these 5 valuable lessons. 

Have more questions on how to get started with your business and how you can win in real estate investing? Call us today! 

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