All Forum Posts by: CJ T.

@Greg Scott Hi Greg, thank you for sharing your thoughts, I agree. But I do have a significant amount of cash reservers + 12 month emergency savings. Using credit cards is a strategy for the cash down payment only, which I would get back after the rehab and refi. Also my credit cards have 12 months of 0% interest.

Hello everyone,

Getting ready to invest in my first rental and I'm in the mood for an inspirational story time. 

I'm calling all the badass creative financing investors. If you didn't use YOUR CASH for your downpayment, what did you use? 

I am doing my own homework so I do know of a few ways, but some recent case studies from you guys would be much appreciated. So please do share! 

I'm particularly interested in hearing from those who didn't have a stated income, IRA or HELOC, and from commercial investors or those who use commercial loans.

Thank you in advance!

@David M. 

Thank you again!

@David M.

Thank you David I appreciate that, those clarifications help a lot. Just today Fund & Grow told me that it's possible to build corporate credit with a sole proprietorship (without personal guarantee/liability) as long as you use your EIN - it was news even to them. Can you believe that? I've always heard the exact opposite (that you absolutely need an entity to build corporate credit). So that's exciting, and if it is true then that's yet another reason why having an LLC just isn't necessary in most cases. Anyway, thank you for your help! It will all tie into my strategy (long and short term) step by step.

@David M.@David M.@David M.

@David M.

Oh I see, thank you David! So once we start talking about "business credit scores", we're talking about "corporate credit" (D&B, etc) and that is what you use to take out actual loans with your business. Corporate credit (and the business credit scores that come with it) is irrelevant to regular business cards because obviously you don't need corporate credit, or a business credit score, to get business credit cards. Is that good way to look at it?

@Peter M. Thank you for the feedback, it's reassuring - and I hope you stay pissed forever too! Haha - and that no issues come up for you. 

You're on point re: business credit cards. And you know what I just found out, it's possible to build corporate credit with a sole proprietorship (without personal guarantee/ liability) as long as you use your EIN. Sounds too good to be true, but a business credit-building company just told me that today!

So like I mention in another comment, many people use business credit cards with 9-12 months 0% interest to make their down payment. Specifically, they use a service like Plastiq; you can pay Plastiq a flat 3% fee (roughly) to make a wire transfer without triggering a cash advancement with the credit card company. So that was my plan - to kind of recycle those cc funds and keep my cash out of my investments. I may have to put a bit of my cash in though, as I'm not getting approved for business cards as easily as I thought - and so far the limits are NOT good. Step by step though - I have strategy in place.

So much to learn along the way!

@David M. Yes, the issue is that I am short on cash for my down payments. But I'm slowing building business credit (credit cards).

So as you probably know, many people use business credit cards with 9-12 months 0% interest to make their down payment. Specifically, they use a service like Plastiq; you can pay Plastiq a flat 3% fee (roughly) to make a wire transfer without triggering a cash advancement with the credit card company. So that was my plan. 

On another note, now that I think about it, perhaps I made a wrong assumption re: corporate credit. Question: Are "corporate credit cards" the same thing as "business credit cards"? If so, is the real difference between "business" and "corporate" credit the non-credit card tradelines that come with corporate credit - but not business credit?

My goodness, I hope I'm being clear!

@Danny Webber

Thank you for that suggestion. I'll look into it!

Hi David thank you for your response. I appreciate what you've shared! 

Here are my thoughts: My assumption is that I don't have a corporate veil to begin with because my plan is to buy the property in my own name with a DBA (let's call this Business A). Regarding the LLC (let's call this Business B), my idea is to use the LLC to build business and corporate credit cards that I'm not personally liable for. I would then use a company like Plastiq to move cash from my LLC credit cards to my Business A bank account. I'd let the funds season in my account and then use those funds as a cash down payment for commercial loans and conventional multi-families properties. I'd be using the BRRR strategy to pay back the credit cards. Later on, as my corporate limits increase, I can do the same thing but with larger deals and take advantage of other D&B/CAPEX score benefits (which I'm still learning about). So how does that sound to you? Any red flags?

What you mentioned about the California $800 LLC tax is my biggest issue and partially why I wanted to avoid LLCs in the first place. But the more I learn about corporate credit and D&B and CAPEX scores, the more it seems that having an LLC is worth just for the benefits of building access to increasing capital over time through corporate credit and "true" business credit.

Re: regular business credit cards, as you mentioned, I'm using Fund&Grow at the moment to get as many as I can (but those cards have my personal guarantee attached to them). So far I got the Chase Ink card, but the funding process is moving very slowly and with very, very low limits.

I hope that clarifies where I'm at in my head (still trying to figure this out!)

Hi everyone,

I live in California, investing in the Midwest.

(Read only the bold if you're short on time)

I'm getting ready to buy my first rental property (it's been a long time coming). Initially I was planning to establish an LLC for liability protection, but after several consultations with different law firms, entity structures seem more complicated and much more expensive than what I need just starting out and with and no real wealth to protect. 

More recently I realized that I don't need an LLC. Why? Because liability insurance + homeowners insurance + separation of finances + taking care of my property and tenants + being leveraged (the bank owns the house and anyone that might sue me will be in line after the bank) = a fine liability strategy for an investor starting out. So that's what I plan to do: I'm going to buy in my own name and use a DBA.

However, I also want to start building corporate credit now; which requires an LLC. So now I'm right back at forming an LLC again, but strictly for building business credit.

Do any of you have experience / advice / insights regarding forming an LLC just to build business / corporate credit? I'm thinking it could be my own kind of lending company; lending to RE investments, other businesses and projects.

Thank you in advance for any help!