Real Estate Investor · Redding, CA · Member since 2009 · 88 posts · 6 votes
Help! I have my personal goals and my business goals, but how do I put them into a good business plan? And, how do I create a good action plan (if anyone has a good pre-made action plan for wholesaling or finding motivated sellers, that would be helpful too)? :help:
I can't speak for others, but I have the word "Properties" in my company's name, and have had absolutely no problem getting money from banks...
If you're having problems getting money for your company, it likely has NOTHING to do with your company name...and more to do with your company's business plan and experience...
For those who think otherwise, do you think you can walk into a bank, ask for a loan, and not tell the lender what you plan to do with the money? And once they know what you plan to do with the money, do you really think it matters whether the company has the work "Properties" or "Investments" or "Real Estate" in it?
I am a big fan of having a business plan to get started, my only advice is to not make it super complicated, as it can create a slow down in your activity that is not justified.
We have seen investors spend 6 months on a business plan! LOL
- Just write a basic mission statement.
- Create a "realistic" goal of how much money you want to make in 2009
- Find out what the average wholesale deal will net you in your area.
- Plug and play the numbers game to figure out how many wholesale deals you need to achieve your goals.
- Let every, single human being you come in contact with know what you are doing.
- Get out on the street and meet at least 3 new people per day!
- Focus on activities that MAKE REAL ESTATE HAPPEN!
While this advice might be generic, it is effective!
Make sure your Company name is listed with the D&B, have at least 6 tradelines, your Business name credit score should be 80. There is more to than submitting a business plan proposal. The name of your company must name correctly otherwise the bank will not lend you any money for your investments.
Make sure your Company name is listed with the D&B, have at least 6 tradelines, your Business name credit score should be 80. There is more to than submitting a business plan proposal. The name of your company must name correctly otherwise the bank will not lend you any money for your investments.
PM me if you have any questions.
This is only if you want to get financing in the name of the LLC. You do not need to do this otherwise. In fact I would say most investors don't even bother with this.
This is only if you want to get financing in the name of the LLC. You do not need to do this otherwise. In fact I would say most investors don't even bother with this.
Why would you NOT want to get unsecured financing in the name of your corporate entity, if you have that option?
As much as I like carrying around personally secured debt that will negatively impact my FICO score and my ability to get additional loans, I'll choose unsecured corporate loans any day of the week... :)
If you can find a broker who will offer me residential terms on a commercial loan then I would be thrilled.
Residential rates are around 4.75% fixed for 30 yrs. The cheapest rate I found for commercial loans was 5.75% fixed for 15yrs or 6.75% fixed with a balloon payment after 15yrs.
These are really good terms for a commercial loan. Most I have talked to offered around 7% with points with and adjustable rate. Also not to mention the fact that you need to put down more money.
I would much rather go with a broker who will place the deed in my LLC but give me a residential mortgage.
When you say unsecured do you mean something like a non-recourse loan where you would be putting something like 30% down?
Unsecured just means that the bank has no recourse against your other assets. All they have is your promise to pay, and if you don't pay, it will likely hurt your (or your business') credit, but it won't result in the loss of any collateral.
As for the specific terms, it really depends on the lender, your financial situation, your business plan, your experience, etc. Every case is different, but in general, unsecured loans don't have as good of terms as secured loans (for obvious reasons).
I've heard that, too. Don't name your company with any reference to real estate investing. Like Scott Properties wouldn't work, while Scott Investments would.
I can't speak for others, but I have the word "Properties" in my company's name, and have had absolutely no problem getting money from banks...
If you're having problems getting money for your company, it likely has NOTHING to do with your company name...and more to do with your company's business plan and experience...
For those who think otherwise, do you think you can walk into a bank, ask for a loan, and not tell the lender what you plan to do with the money? And once they know what you plan to do with the money, do you really think it matters whether the company has the work "Properties" or "Investments" or "Real Estate" in it?
Having big goals is a good habit. I would suggest you to set small time frames goals. Be more specific about the business, you want to start. Judge your capabilities like investment, management and entrepreneurship etc. Don’t forget to conduct a market research before starting any business.
J Scott is correct. Your company's name has little to do with the bank accepting or rejecting to fund you. The bank couldn't care less, it is not an issue as far as they are concerned. However, if you call your company, "John Holmes buys Homes" you are raising a red flag to the underwriter. These people hate RE investors! And you can take that straight to the bank. I have a good friend who is an underwriter and she has filled me in on all the do's & the dont's. You may as well put on the application, Occupation--DRUG DEALER, because you have a better chance of getting approved. They categorize borrowers into 2-groups, Legitimate borrowers &
Drug dealers. Her advice, don't make any obvious references to what you do in your company's name or logo. You will only draw more scrutiny to your file. Remember they are looking for a reason to reject you, Don't invite the opportunity. To the banker it's a credibility game---you provide them with good deals they will lend you money all day long. To the underwriter it's a ligitimacy game---and that means your ability to pay back with clean money. The underwriter dosen't need to know what you're doing with the money. Now, If you want to avoid this, especially with today's lending practices, I suggest developing a relationship with several portfolio lenders at your local community banks or credit unions. This will never be an issue, and thats how I avoid it. I had an underwriter call me once and I was totally caught off gaurd and got grilled. I did get approved on that loan, but I had to take my name off the loan---long story. I know I will get hate mail for this, but I'm use to it. My motto--"Bankers are my pals".....It's a symbiotic relationship !