Curious as well. On their website they state they are "making waves on Bigger Pockets", but I see no references on this site other than a copy and paste of their website verbiage in a blog post. They also say they have an A+ rating with the better business bureau, however they are not BBB accredited and therefore have no rating with the BBB. Oracle Loans LLC was also created in January of this year, so curious if anyone has an experience with them because the details of their Real Estate Investing Line of Credit are very attractive. Just about to apply, but doing due diligence.
I started the process with Oracle Loans LLC, but I decided to pursue other options. They are partners with Midwest Corporate Credit. They charge a 10% fee to get you approved for business credit cards (it's not really a line of credit) and it is not guaranteed you will get the amount you are requesting. I can search for business credit cards myself without paying a company 10%.
Oh gosh. This is why I love BP. I was just looking at this company and as soon as I saw they were affiliated with Midwest Corp I hit that exit button. We used Midwest Corp this year and I have to say we were not too pleased at the fact they tell you you are getting a line of credit when in fact you are just getting a bunch of credit cards. One the upside, we just started investing this year so having business credit cards has helped in many ways. Instead of of applying for a credit card with each bank and having our credit hit, it was just done one time and went out to about 20 banks. Wasn't too bad but definitely something we would not do if we had at least 2 or 3 years in.
hello @Nikki Grizzle...can you share some pros and cons of using business credit when starting out in real estate? I'm looking to buy and holding soon and I am considering using business credit...turn it into cash and then use the cash as a down payment...I'll pay off the card when I refi...I figure I'll do this for my first 1or 2 properties
@Taron Jackson We used our business cards we received from Midwest Corp for cash advances for down payments. My husband applied with his name only under our business. It works out great if you can get business cards with at least 12-18 months 0.00%. If not, use the cards with the shortest promotional 0.00% apr first and then do a balance transfer from the cards that have 12-18 months. Many investors have said it is the wrong way to start out. However, as a new investor, most banks are not going to hand you a business credit card or line of credit because you have nothing to show. So although we were quite annoyed at the process and not receiving an actual line of credit, it helped us build our business reputation and gave us credibility. For example, we were able to get a card from another bank on our own because we already had business credit cards with 5 other banks. We were only in business for a couple of months, had no tax returns or anything to show but proof of rental income.
I do recommend signing up for a regular personal credit card and using it as a business card, as you still get the same tax deductions. Shortly after he signed up for the business cards I signed up for personal cards under my name only. I got larger credit lines, better promotional offers and incentives. Two were with banks I have already banked with and the other was with a new bank. 3 new cards and the total credit limit was only about 3k less than what we got with all the other business cards.
So the pros with business credit cards is that it gives you leverage when trying to obtain other business financing as a new investor. It also is a great way for down payments however, you can do the same with a personal credit card and probably get a larger credit line. So I would say sign up for both. You are building relationships with these banks and eventually can increase those credit limits. You now have credit for unexpected expenses that you may not have the cash for such as roof damage, hvac replacement, leaks etc.
The cons are that you most likely will have to pay cash advance fees on some of those cards for down payment money. You cannot do a cash advance off the entire card. So if you get a limit of 5k you may only be able to do a limit of 1500-2500k. You may have to do several cash advances off of one card as there may be a limit. We had that issue with one bank. They only allowed a certain amount per transaction. So we had to pay a cash advance fee twice.
So,if you are going to use business credit cards I highly suggest you make sure you have enough cushion just in case. Remember that only a portion of that card can be used for a cash advance so depending on the purchase price of your homes, you may or may not have enough credit so you will need to seek more financing options. If you can, get an actual Line of Credit so you can use as much as you need for down payment money. Especially, if that is all you plan on using the credit cards for.