Establishing Commercial Credit & a Co called American Wealth Fncl

Establishing Commercial Credit & a Co called American Wealth Fncl

Rental Property Investor · Volcano, HI · Member since 2016 · 15 posts · 7 votes

I am a cash-flow investor with 5 multi-family homes. I'm currently financing everything under my own credit and then vesting it to my LLC (with my lenders knowledge and approval). It's a hassle and I'm not effectively establishing corporate credit this way. I want to instead purchase or refinance properties directly with my LLC.

I was contacted by a company called American Wealth Financial. They indicate they can help me establish corporate credit for my LLC, more quickly navigate to an 80 Paydex score and also connect me with lenders who are more likely to provide unsecured loans to my business (and also help to quickly report credit to the top corporate credit reporting agencies.

Has anyone worked with American Wealth Financial or a similar company? Any good/bad experiences to share?  Does this sound like a good next step or am I missing more simple or effective ways to establish commercial credit?

I appreciate any advice and feedback.  Thanks!

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  • Real Estate Lender and Broker · Dallas, TX · Member since 2013 · 966 posts · 500 votes
    10y

    Stacy,

    What are they charging for this service?  I just don't see the value in it.

    Mark

  • Rental Property Investor · Volcano, HI · Member since 2016 · 15 posts · 7 votes
    10y

    @Mark Creason, they are charging about $1500 for this service which includes a year of working with a corp. credit coach, routinely checking and correcting any errors in PayDex score and connecting us with lenders who will lend to a real estate business and will report monthly to the top 3 credit bureaus. To me the value would be in finding lenders who will work with my business and not require everything to be purchased by me and then vested to my LLC. But I haven't found anyone who has worked with them so I'm unsure how successful and helpful they really are.

    I've been spending a lot of time "smiling and dialing" to numerous lenders and just haven't had luck finding lenders who will lend to my LLC. My properties all flow, but still the lenders want the loan in my name.

    Do you have other ideas for how best to establish corporate credit and find lenders who will loan to my LLC? I appreciate your input.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    10y

    Stacy on the residential side they do not like LLC's to hold title. On the commercial loan side it is common to put in an LLC.

    Now if you have a non-recourse loan the LLC could be newer as the recourse is the property. If you wanted a recourse loan with a newly formed LLC as the guarantor stuff like that doesn't fly. A newly formed LLC is separate entity and without a track record any guaranty from it is usually worthless to a lender.

    A borrower has to have some skin in the game somehow.

    Mark is a lender so you might learn something off of a call with him.  

  • Rental Property Investor · Volcano, HI · Member since 2016 · 15 posts · 7 votes
    10y

    @Joel Owens Thanks for your feedback. Yes, no surprise a lender wants skin in the game, especially from a new company. I have no problem with the property being collateral. I think the challenge I'm running into is my loan amounts are too low for commercial lenders and residential lenders don't like to finance to an LLC. I'm buying low cost duplexes, triplexes and quads so it's not the primary market for commercial lenders. I'll chat with a few more lenders to get more feedback. Thanks!

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    10y

    That's kind of a grey area. Doesn't fit the small guys and doesn't fit the big ones. Might want to look for private local money from older retired investors who want a return but are no longer active. 

  • Rental Property Investor · Volcano, HI · Member since 2016 · 15 posts · 7 votes
    10y

    Great idea, @Joel Owens!  Thanks!

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