How to build business credit for real estate investing?
Well, I’m going to tell you exactly how to use business credit to get all of the real estates that you need for investing so that you can have the life in the business that you want and deserve.
Let’s go. So, let’s first talk about real estate investing and all of the benefits and the things and the reasons why you would want to build business credit so that you can do real estate investing. Because that is so important.
When we are talking about building business credit for real estate investing, we have to first know about real estate. And when it comes to real estate investing, there are so many benefits that you’re going to be looking for. You’re going to be able to get passive income. You’re going to be able to increase your personal wealth. You’re going to be able to actually make money off something that you have a debt on.
So, a mortgage. You’re leveraging mortgages to actually make money. Additionally, with rental properties, the properties are going up in value. And they’re increasing and then the tenant is paying the mortgage down. So, even after you’ve had rental properties for just a few years, it’s pretty easy to walk away with very large lump sums of cash.
I’ve literally sold some of my rental properties and walked away with hundreds of thousands of dollars after the tenant paid the rent. Think about that. So, they paid the mortgage down, I wasn’t really paying it. Their rent covered the mortgage then the property value is going up, I make the money. Bam!
So, now let’s talk business credit. The big difference between business credit and personal credit are many. Many of us are already familiar with personal credit. I’m sure you’ve heard of you know Experian, TransUnion, and Equifax. Well, our personal credit usually is all of the debts that we have in our personal name.
So, student loans, credit cards. If we buy a house, things like that. People will look at our Fico scores and see what our personal credit is. But with business credit is much different. These are not credit cards that will report or credit that will report on your personal credit card. Your business is a separate entity.
So, because you create an entire entity, I’m going to tell you exactly how to do that. You will actually have an entirely different process. So, instead of reporting to Equifax, Experian, and TransUnion, on the business credit side, we have Dun & Bradstreet. We have Equifax business and we have Experian business. And they are much different.
So, your personal credit cards will not just report on your business report. And your business debts will not report on your personal credit. And this is awesome. This is probably one of the biggest mistakes that I made when I started investing in and building my own business. I started relying on too much on my personal credit and my credit score tanked.
So, as I started using my personal credit cards to you know to buy my LLC for example, or to buy marketing for my business, my credit score started to go down. But with business credit, it is much different. So, let me tell you how you will start to build business credit.
It is actually very simple and is probably the biggest mistake (like I said) that I made in my business. I waited way too long to start building my business credit. And because you’re watching and listening to this, you’re probably not going to make the same mistake. So, the first thing that you’re going to need in order to establish business credit of course is a business.
So, you need a legitimate business, you’re going to have to go to your secretary of state and get your business registered. Either as an LLC or as a corporation. You usually have 3 different options. Usually can do an LLC which is a limited liability company or you can do a C corp or an S corp. Now, Finance & Savings team is not a tax advisor or an attorney.
So, I’m not going to advise you as to which structure you should choose. I will just tell you though in most cases, I have done an LLC when I got started. The next thing that you’re going to need is you’re going to need a business address. So, in order to really open up some of the credit that I’m going to tell you about later, you’re not going to want your business to be established from your home.
Now, of course, in a pinch, if you don’t have a business office or you don’t want to lease space, you can just use your home address. But I suggest getting a virtual office. I’m going to give you a link down below to companies that do some virtual offices at a very, very cheap price. In fact, I’ve had somewhere it’s only $9.99 per month. And that is in my business’s address.
They collect my mail for me and then if I want to go buy and pick it up, I can. But that is my business’s address and I’m not using my home address. You’re going to need a business phone number. Again, this is super easy and simple to get. You can use companies like grasshopper or freedom voice. You don’t want to use google voice.
I know people say that’s a great way and it’s really inexpensive. I think in some cases it’s free. But the problem with a google number is you cannot list it as your business’s phone number. All of the business directories will reject that phone number.
So, use one of the companies that I’m talking about. And again, I’ll put some links below for you. The next thing you’re going to need is a professional email. So, of course when every business needs a website. So, you’re going to get a website. You’ll buy your domain name. So, let’s just use a quick example. If my name the name of my company was ABC properties, I would see if I could buy the domain abcproperties.com.
And then when you buy that domain and you get the website, again, super inexpensive. You can get domains for like 7.99, super cheap. You own them and then you can also get a business email with that same domain name so you could get like ABC@blahblahblahproperties.com.
Those are the main things that you’re going to need before you can ever say that you have a full business to start getting business credit established. Once you have those things established, getting a Dun & Bradstreet number is very easy. A D&B number.
Remember I said to you earlier that there are three different credit reporting agencies for business credit. So, just like with your personal credit, you have TransUnion, Equifax, and Experian. On the business credit side, you have Dun & Bradstreet, Experian Business, and Equifax business. But I will tell you this: The main reporting agency in the business credit world is Dun & Bradstreet and to get your Dun and Bradstreet number, it’s pretty easy and simple.
Oops, I forgot. You’re going to also need an EIN number. After you get your LLC established, go ahead and get the EIN number which stands for an employer identification number, that’s EIN. And you can go right to irs.gov and get that for free.
So, those are the main things that you’re going to need. You’ll get those items; you’ll go to Dun & Bradstreet. You’ll get your free number, boom! You have the main components of what you need. So, let me tell you the next thing.
So, now let me tell you how you’re going to take all of this awesome business credit and how you actually start to get real estate with it. Because that is the fun part. So, for many people, we have to think differently. When it comes to buying real estate, we usually think of it in one way.
But as real estate investors, we think of property much differently. We want to make money. As I said, this is about passive income, this is about buying properties that are going to increase in value so you can get those lump sums of cash. And the easiest way to do this as a real estate investor is to think like a real estate investor. What we do is we seek out people with property problems?
People that are you know behind on their mortgage payments or they’re going through a divorce or they’re going through a bankruptcy or they got relocated and they don’t need the house or the home is in disrepair and needs lots of repairs or something like that and they don’t have the money to fix it.
So, they’re having an issue with their property. And in many cases, we’re able to pick up these properties for pennies on the dollars. I’ve literally been able to buy properties for the past due amount on the mortgage just using that as an example.
For example, if someone is past due on their mortgage and they’re like 3 months behind, I’ve been able to get those properties for just a few thousand dollars because all I had to do was have the money available to catch those mortgage payments up and then take over those payments. And this is all possible with business credit.
So, you’ll start to think like an investor, you’ll start seeking out people with property problems and then you will market to them and those are how we will get those properties and you’ll have the funds already available from your business credit cards, from your business lines of credit and things like that. Again, using other people’s money and helping people that have property issues.
Get out of those properties and then you take those properties over. Or in many cases, say for example you want to flip those properties to someone else looking to an investor like, “me, I like to take those properties.” And if you want to wholesale to other investors that can actually fix and flip the property.
But it’s an easy way to start picking up 5, 10 thousand dollars on properties that you never own, you never have to use any of your money. I’m telling you how to do that. And you don’t even have to use credit. Again, you can use your business credit or you can use no credit at all. You can flip that property in that contract to someone else and pick up five to ten thousand dollars.
So, super easy. But the key to it is getting that business credit, start getting those business trade lines and things like that. And then knowing that you’re going to be thinking like an investor and you’re going to be able to get properties for pennies on the dollars just by targeting people that have a property problem.
So, now that I gave you all of that great information and told you how and what you’re going to do when you get the business credit, let me tell you exactly how to get some business credit started quickly.
So, as I said, you already established your business, you got the LLC, you got the EIN number, got your phone number. And I’m telling you, you can get this stuff done in one day depending on what state you’re in. Your LLC or your S crop or whatever that you’re registering the business with, in many cases, you can do that online.
So, depending on what state you’re in, you can do it all in a day and get this stuff done. But if you’re in one of the states where it takes a little bit longer, we’re talking about maybe 1 or 2 weeks. So, this is not a long process guy. So, once you have those things started, the easiest way to do it is there are 3 companies that I know specifically that report to Dun & Bradstreet to give you some (again) business credit trade lines.
The first one that I absolutely love to do business with them all the time (this is not an affiliate; I’m not being paid for this) is Quill. That’s Quill.com. You can set up a business account with them. And they usually… Even if sometimes they’ll give it to you on the first account, sometimes they give it to you the second go around but they will give you a vendor account.
Meaning like a net30. Where they will allow you to buy things and you do not have to pay for it for 30 or 60 or 90 days. They will invoice you. And they call it either a net 30 or a net 60 or a net 90 depending on how many days that they give to pay you.
So, Quill is a company like that. Uline is another company. ULINE. Again, no affiliate links. This is just me telling you for free. You can go to them, you set up your business account, you can purchase things from them. Even if you do a cash purchase and it’s over $50 and you’ve done it properly, they will still report that as a cash transaction on your business checking… I’m sorry about your business credit report. So, it is amazing.
And then another company that I know is Grainger that’s GRAINGER, Grainger.com. Again, you set up a business account with them. You can purchase things from them as long as you buy something that’s at least $50. They have things for your business. You can buy printers or ink or cleaning supplies. You know, you can buy things that you need for your business, I suggest.
And again, if you spend more than $50, they will report to the Dun & Bradstreet credit report. So, that’s 3 companies right there completely free that you can use. But let me give you one more bonus because I just have to. Because Noelle always telling you everything. Get a business checking account. I know I did not say that but this is the secret.
This is the secret. Many cases now you can go get a business checking account and they will offer your business credit cards right on the spot. This is totally new.
Trust me, this does not exist when it’s when I started businesses five 10 years ago. It was actually unheard of for a bank of America for you to open up an account with them, a business checking account which you need to do anyway. And then give you a business credit card or business line of credit right off the spot. So, this is the opportunity. And I don’t want you to miss it and I don’t want you to say no to those offers.
Those are business credit cards. Even though they check your personal credit, the only thing that’s going to actually happen on your personal credit is that inquiry. Once they give you that business checking, I mean they give you that business checking and you get that business credit card, that credit card as you’re swiping it is not reporting on your personal credit killing your credit score up and down as you use it.
In fact, it’s helping you and it’s building your business up. Because usually with business credit, business credit cards, business lines of credit:
1- They give you higher limits. So, you know, usually with personal credit say, for example, you don’t have much they give you a capital one card for example. Sometimes they give you only 500 or 1,000 dollars.
Well, in the business credit world, they usually start you off much higher. Because they know your business you need to actually buy things. And you know, so they give you usually higher limits. That’s 1.
2- They increase those limits a lot faster. So, just giving you an example. I have a chase business ink card, for example. Paid it for 6 months and then called them up and asked for an increase and they doubled my limit. So, write off after, just 6 months of paying them on time. And I’m going to tell you the secret and why that is. Because in the business credit world, they’re looking at something different than they are in the personal credit world. In the personal credit world, they’re looking at your debt to income ratio.
They’re looking at how much debt you have to the income that you make. But on the business credit side in the business world, they’re looking at how well you can manage your debt. So, in other words, if you’re able to show that you can pay your credit cards and your lines of credit on time, they’ll gladly give you more money for your business to fund your business so you can make more investments in your business, make even more money and then pay them.
So, it’s totally different. They are not the same. Do not listen to anyone that tells you that they’re saying. But the great thing about is if you have great personal credit is you can immediately start leveraging your great personal credit.
Let them look at your credit score and then give you those business credit cards and then you don’t even have to worry about getting or using your personal credit cards in your business. It’s like a life-changing.
So, if you are wanting more information and you want to get full training, please go to noellesfreetraining. It will teach you my exact formula for finding deals and making money in real estate without losing money.