Back to School, Hello Fall, and Happy Halloween All in 10 Days!
My daughter started school almost 2 weeks ago and even though technically summer isn't over, it's pretty much over. Yesterday I walked into Lowe's and saw this 16-foot grim reaper staring straight down at me. I'm like...WTH?? Didn't we just celebrate the 4th of July?
I bought a 16-foot Grim Reaper at Lowe's the other day.
Strangely enough, when I saw this amazingly tall and oversized blow-up Halloween lawn decoration, it made me smile. In fact, I couldn't stop smiling when I saw it. I still can't stop smiling about it. :-)
You see, I'm a Halloween junkie. It's my favorite holiday and it's the only one I actually go "all out" with a variety of different blow up "things" in my lawn with the precise intent on showing up my neighbors. Yet by the time Christmas rolls around, my yard pretty much has nothing to celebrate the overrated retail-money-suck-driven holiday. Even a Charlie Brown Christmas tree much more than what I do for Christmas.
But Halloween is different.
It's a day where you can do something different...be somebody different. There's a magical element to that to me, for some reason.
So, there I was at Lowe's, smiling my ass off at a grim reaper that is about as tall as my house, and thinking how freakin' awesome it'll be in my yard since I live at the end of a cul-de-sac. I stuffed 1 of the last 2 boxed grim reapers they had in stock into my cart while thinking..."Isn't life awesome?!"
Lately the seemingly dumbest things have been making me happy. And I'm not sure why I was so ecstatic about this grim reaper. Is it because he's so unusually large in size and I've never seen any holiday yard blow-up thing so cool? Or is it because I can spend $200 on something so stupid and not think twice about it? Or because my neighbors will gasp in shock and awe at how awesome it is? (Nah, I really don't care about them but I do care about the kids gasping and being in awe! Halloween is for the kids, after all.)
I figured out the real reason why a dumb holiday yard blow-up grim reaper makes me happy.
Because I'm not miserable about anything else.
Yes, that's right. You read that correctly.
Most people are running around feeling stressed about money, or their job, or their future, or making a mortgage payment, or a variety of different things revolving around "survival" and "trying to make it." They'd be too stressed out to enjoy something as goofy as an overpriced, oversized lawn decoration.
I've been extremely lucky that I've been able to figure out business and investing early on. I've been pretty good at bringing in a consistent cash flow into my life from real estate investments, business activity, and even residual income from things I've written.
I had a conversation with a student of mine a short while back. He has 2 Master's degrees in business, he just turned 50 years old, and his six-figure-annual job just gave him his walking papers because they believe they can hire 2 college kids for a fraction of what they pay him, mold them to their liking, and have another set of slaves for at least 2 1/2 decades when they know they can't get that amount of time out of a 50-year-old.
Now he doesn't know what to do.
This is exactly what I've been talking about when it comes to the "New Economy," folks! Things just ain't what they used to be anymore.
But guess what?
If you can -- even for a few minutes -- stop thinking like a Paycheck Charlie and start thinking about an entrepreneur, you'll very easily see how this New Economy can work in your favor.
You now can easily make a six-figure-annual income...working 20 hours a week or less and never having to leave your house.
You now can easily take advantage of some incredible loan programs for commercial property allowing you to be a real estate cash flow millionaire by solely using other people's money.
It's all in what you know.
A Paycheck Charlie only knows how to put together a resume and how to start applying for jobs. He or she also knows how to do reasonably well in an interview, how to get a job, and how to take orders from someone else for 40 hours a week. He or she knows how to trade hours for dollars.
And that's hard work in my opinion.
Recently I had to do some interviewing myself. I was replacing 2 employees in my warehouse. The job pays $11 an hour.
And I had dozens of people with degrees applying for the job.
What??
What the hell is going on here??
It seems that once someone adopts the Paycheck Charlie mentality -- no matter what economic changes occur -- they can't break free of that limited type of thinking.
It's not a matter of deciding to change your thinking process because it might be good for you.
It's a matter of being required to change your thinking process because you don't have a choice anymore.
While people are demanding minimum wage to be raised to $15 an hour, little do the small-minded thinkers realize is that there are shiploads of robots coming in from China as we speak to start replacing these minimum wage workers.
After all, if you owned a McDonald's, what would you rather have:
An employee who not only demands $15 an hour in minimum wage (for very limited skills, mind you, such as mopping the floor and flipping burgers...brainless skill-less activities) but calls in sick, steals, files a Worker's Comp claim for slipping in the back, steals, punches another employee out in the parking lot (and now the other employee is suing you), files a discrimination lawsuit against you, and then slacks off on the job to the point where you have to terminate him...now he's collecting unemployment that you have to pay for!
Or...
"Hire" a robot imported from China which costs you $5,000 plus maintenance including upgrades on software...and that's it.
No salary, no lawsuits, no insurance, no days off, no calling in sick, no hurting other employees, no stealing, no drama...nothing.
It's coming, folks! If you think I'm joking, just wait around for another couple of years and watch those minimum wage jobs evaporate left and right.
Now, you have another choice...and no, it's not going back to college to get a useless degree to become "educated" so you don't have to sink to the point where you need a minimum wage job. (Because, after all, I just demonstrated that those jobs are going to be disappearing very soon.)
You have to become "educated" in another fashion.
This is why I love America. I recognize the never-ending opportunities everyone has here at their fingertips...including you. Especially you. Because you're already here!
And if you're reading this, you probably read and speak English well.
Simple elements needed to be highly successful in our New Economy.
I was watching a Secret Millionaire episode recently where I was comparing the difference between the millionaire and the guy who was barely able to make end's meet.
And, as far as I could tell, there was no difference except for one thing:
The millionaire "knew" something about how to navigate through commerce and the other sap had a Paycheck Charlie mentality.
But that was the only difference!
What did the millionaire know? Did he have some wiz-bang degree from a college?
Nope! In fact, he was a high school drop-out.
He knew how to develop a product that would sell and he also did well in investing.
Oh, one more thing: he wasn't afraid to take risks and start a business.
That's sort of important.
Our economy isn't going back to where it was so now you're faced with a question that you have to answer:
How are you going to start cashing in on the New Economy in order to not only survive but thrive these major economic changes? Are you going to invest or are you going to start a super successful Aggressive Income business? Or both?
The only thing my mother ever taught me about anything "financial" in my entire lifetime was about credit. She always told me to take good care of my credit because our entire world revolved around having an excellent credit history.
She cautioned me about using credit wisely, about not getting into debt, and about "constructive debt" vs. "destructive debt" long before Robert Kiyosaki's book Rich Dad, Poor Dad came into the picture.
And that's all she taught me about economics. Period.
Turns out, it was one of the most important lessons a young chick like myself could have possibly learned because I'm only now just figuring out how extremely important all this "credit business" really is.
And the more fractured and delicate our economy has become over the past several years, the more cautious banks had to become. The more cautious, the better your credit has to be in order to tap into the financial resources (i.e. loans, credit cards, etc.) that they have to offer.
None of us really could have predicted what happened with our economy. The only thing any of us really could have known was the regular "ups and downs" economic conditions tend to wave through as the years roll on.
Now it takes really good credit to get to where you want to go...and that includes anywhere.
Let me give you an example:
Right now I'm in Las Vegas at a trade show for my other business. There are hundreds of exhibitors, all of whom cater to retail stores and wholesalers. This means that anyone with a business is considered a prospective buyer to these exhibitors.
But here's the deal...
The buyers qualify for "show deals" on placing orders directly with these exhibitors during this 4-day trade show.
However...
There are what they call "purchase minimums." This means that you're not going to walk up to a booth and realistically get one of anything. In many cases, you won't be getting a handful of anything either. You're looking at purchasing in volume.
We just closed out the first day of this 4-day show. I, of course, had to walk the show to see the hundreds of exhibitors and what they had to offer in a variety of different categories.
And all I could see is dollar signs.
Why?
Because most of the items that are being sold at this trade show are not only being offered at incredible wholesale prices but the "show only" deals that are being offered for orders placed here at the trade show are...absolutely mind-blowing!
The money that can be made by simply buying products and selling them to the general public is nothing short of amazing. Even if you had an eBay store, you'd make a killing.
But if you don't have the money to be buying these required volumes to get these "show only" deals, you're screwed.
Unless you have the credit, of course.
I started thinking about the new credit cards I just got for my newest company within the past couple of months, adding up to tens of thousands of dollars that I could simply use at any of these booths to essentially "flip" product and make a fortune.
And guess what, folks?
I may actually just do that.
After all, many of you who know me already know that I like doing different things just to change stuff up a bit (since I'm easily bored).
Plus...
Since I have my seminar coming up next month in Los Angeles for my Underground Secret Event talking about the most Aggressive Income Strategies (on Speed and Steroids), within the past couple of months I've been creating this special "case study" that will be presented at the event to show you how you can build a $20,000-per-month home-based business literally starting from nothing.
And I can just add to that special case study I'm doing by buying some stuff at this trade show, "flipping" it online, and taking in some huge profits by using other people's money.
Yes, that's right.
By using the bank's money with the new business credit cards I just got!
There's nothing worse than building business credit and using it for anything but business and investing related endeavors. In fact, using business credit for personal reasons should and probably is considered a crime on certain levels. As it should be.
There's only one reason to get business credit: to use the money to make money.
And the last time I checked, a big screen tv or a new Mercedes doesn't make money.
As long as you are responsible and understand the importance of why you are fixing/rebuilding your personal credit while building business credit then you're responsible enough to do the right thing with all the money you're going to have access to.
And that is to use that borrowed money to make money.
If you don't understand that basic concept then don't even bother trying to get personal or business credit otherwise you'll be irresponsible with this newfound secret strategy.
You need to now choose how you'll position yourself for 2014. You can choose to be broke and feeling sorry for yourself for missing the boat. Or you can choose to seize these opportunities by positioning yourself slightly ahead of the curve so you can cash in big when the next year rolls around.
As I always tell you, the choice is always yours.
Again, you can choose to take advantage by both learning what I have to show you but by also (most importantly) applying the strategies I give you.
Or not.
You choose. The nice part about life is that you always get to choose your own fate. You just might be realizing for the first time ever that you actually do get a choice in the matter. You always have.
Some of my students who are part of my business credit building teachings like to put the cart before the horse, usually even before they get or read my course materials.
I got an email today from one such student who asked about opening up several BLOCs (business lines of credit) at the same time. After all, he wanted to open up as many as he possibly can in the shortest amount of time. (Who doesn't?)
First of all, business credit access doesn't work like this.
How does it work?
Glad you asked!
In order to gain access to lines of credit from $50,000 and up (preferably a lot more than that), you have to start establishing yourself with a bank. Preferably a large bank.
You can't realistically walk into any bank in town and say, "Hey, I have a DNB profile with a 90 Paydex so...where's my $200,000?"
As you can probably guess, that's not how it works. Not by a long shot.
When getting unsecured BLOCs, you have to understand that the bank has to "get to know you" on a financial level.
And this starts with an unsecured business credit card.
Now, here's the trick and something I've learned the hard way:
You can't have your business bank accounts at this bank where you want to establish a relationship (to get a BLOC eventually) unless you do a sizeable volume of business (i.e. have a huge business cash flow). If you just open a business bank account with $100 in it, never have any volume or business transactions, and expect that they won't consider this inactive account in their credit decision on a BLOC, you have another thing coming.
So...
You have your business account somewhere else.
Here's a scenario for you:
1) Open up a business bank account at Chase.
2) Get an unsecured business credit card at Wells Fargo. (Wells Fargo is the only bank that offers secured business credit cards now too; in the event that you have poor personal credit, you can start with a secured business credit card now.)
3) Get a second unsecured business credit card at Bank of America. (May as well establish credit with 2 banks at the same time, right?)
4) When basing credit decisions (even down to getting your unsecured business credit cards), these decisions won't be based on what's in your bank account or what type of business volume you do since they don't have access to that information.
5) Once you establish a payment history with your business credit cards, you can now start the process of getting a very low BLOC...like $5,000 to $10,000.
Now, in case you don't understand what a BLOC is...it's a line of credit. And it's revolving, much like how a credit card works. You gain access to a certain amount of money that the bank allows you access to. Say it's $10,000. You can draw out $5,000. This means you still have access to $5,000 that's left. Say you make a payment of $2,500. This means now you have access to $7,500. Say you pay all $5,000. You now have access to all $10,000 again.
Eventually, after showing that you can take money, pay it back, take it again, pay it back...you can now ask for the bank to increase your BLOC.
So, this goes against my students' common misunderstanding that a BLOC is a loan. A loan is an open and closed deal. You get a certain amount. You get the whole amount, usually in the form of a check that is deposited into your account. You make payments on the loan. Once the loan is paid off, the loan closes. It's not revolving in any way.
A BLOC is not like this at all. The account stays open...forever (or until you die, close it, or screw the bank over, which I hope isn't an option for you).
So, when a student is asking me how he can open up as many BLOCs as possible, my question is..."Why?"
You need to establish a solid relationship with a bank, first starting with a business credit card then a small BLOC. Once you get this relationship going, they'll keep increasing the size of this one BLOC. No need to have 20 BLOCs when you can keep increasing and stretching the one you got!
Then, hopefully if you paid attention, you will have started establishing a business credit card at a second large bank and this is when you can also get a small BLOC with them for the purposes of establishing credit.
Now, when I say "for the purposes of establishing credit," I mean you're not using this money to buy anything. You're taking the money out, parking it into a savings or checking account, then using the same money to pay back the bank.
Get it?
Within a short time, you'll notice that you'll have a BLOC (or two) that are collectively worth several hundreds of thousands of dollars that you can use for investing, starting a business, etc.
As you know, to compete in real estate investing right now, you are going to be going up against seasoned investors that have money down. This is the way it's going to be from now until about 2020. So, if you don't have the cash to compete, establishing solid business credit is your last chance aside from robbing a bank, hitting up rich Aunt Sally, or winning the lottery. (You could get an investor partner.)
Some of you have actually been emailing me, wondering when I'm going to spill the beans on how to access the hundreds of thousands of dollars in business credit cards that you'll be getting.
After all, getting unsecured business credit cards are actually the easiest thing to get when it comes to business credit provided that you put the time, effort, and appropriate energy into fixing/rebuilding your personal credit to get yourself over that 680-FICO score threshold.
Now, since getting unsecured business credit cards is quite easy to do and it's much easier than you think to get several of these cards that are collectively worth $100,000 within a very short period of time, you're probably wondering how to use this credit as a down payment on a property, for instance.
Many of my students have asked me..."Can I just give escrow my credit card for the down payment?"
Um...no. You can't.
What you can do is this:
1) If you plan on having and operating a functioning business (say a distribution business, for example) then you'll get something called a "merchant account." This merchant account will allow you to be able to charge credit cards which can include your own. (There is a restriction against this in the merchant agreement about running your own credit cards but that's a risk you'll have to take.) It's recommended that you have a different business set up than the company that you are establishing business credit under in order to successfully pull this off without a hitch.
2) You can "pay yourself" through PayPal. For example, if your spouse has a PayPal account and you (or your company that has the business credit established, which is preferred) have a PayPal account, you can have your spouse do a "money request" or send a PayPal invoice for services for whatever amount (cash) you want to take off your business credit card. You can easily get the money off your cards this way. It's recommended that your spouse have a PayPal account set up under a different business name than the one you have business credit under, particularly with a different tax ID number. You don't have to have a corporation to go to the IRS.gov website to get a tax ID number for a "sole proprietor" business. (For example, your spouse could "start" a company called Terry's Flowers and go to the IRS.gov website to get a tax ID for this company using his/her personal social security number to secure this tax ID number. This tax ID can then be used on the PayPal account where the money request is coming from, thus "shielding" your spouse (who probably has your same last name) in the transaction as being someone who is related to you; this makes it look like there is no relation between you and the establishment who requested the money for services from you.
3) Cash advances are limited but are also available for some of your business credit cards. You can "max out" on the cash advance limit for each of your credit cards.
Since getting $100,000 in unsecured business credit with multiple business credit cards is quite easy to do within just a few months' time, you can easily extract $30,000 or more of that money without anyone (mainly your credit card companies) really being any the wiser to what you're doing. And getting a whopping $30,000 is a decent amount of cash if you're buying a "quad" or if you need that 10% down on a commercial SBA loan.
Also, when paying for due diligence (property inspections, appraisals, etc.), you can use these business credit cards to directly pay for these services in many cases as well.
When you borrow this business credit, make sure you have the means of paying it back. If this money is going toward a cash flow property, make sure you understand the interest rates on the down payment money you are borrowing off these credit cards to make sure the property still cash flows. Also, make sure you take more cash off the cards than what you need for the down payment so that you can wait the first 45 to 60 days to start seeing the first of your cash flow after closing without being strapped for the money to pay your credit cards.
The other day I promised to lay out the exact steps you need to do to get the type of business credit I was able to line up recently with my relatively new company. In order to do this, though, it's only fair that I break it down into 2 parts since getting this type of credit requires seemingly "separate" things in place.
Now, before I tell you exactly how this is done, I need to first make it clear why business credit is where it's at. Building personal credit alone won't get you to those unsecured six-figures (and one day seven figures) as I indicated in my last email when I was showing you the difference between my 2 Bank of American unsecured credit cards that I got in the same month: my personal card yielded me a pitiful $5,000 unsecured credit card while my new business's unsecured credit card is $30,000! Big difference!
Why the difference?
Think about it from the bank's perspective.
If you were Bank of America and you were analyzing a personal vs. business credit application, the first think you'd wonder is...what's someone getting a personal credit card going to do with it? Then, what's someone getting a business credit card going to do with it?
When someone wracks up debt on a personal credit card, they quickly get into financial trouble. It many cases, it can become the financial "death" of them within a very short period of time. And it almost doesn't matter how good their personal credit is now. A small (and even temporary) financial off-balance (i.e. loss of job, high medical bills, etc.) can sometimes lead to getting into a lot of debt...and fast.
In business, "debt" isn't only accepted...it's expected! Many businesses use credit to balance cash flow against giving clients and customers extended credit terms (like net 30, 60, or 90 accounts). And business owners need a means of balancing their incoming cash flow which is where credit comes in.
This may seem obvious but one thing you probably didn't know is this: while banks drew back on giving out personal credit ever since our recent banking collapse, they've been virtually forced by the government to keep offering up credit to businesses.
Why is this?
The only difference between the Great Depression in the 1930s and our complete economic demise by 2008 is one thing...and one thing only: credit to businesses.
That's right.
The reason so many businesses folded in the 1930s to the point where they had to close show (thus offering no employment to people which makes the economy go around) is that banks completely stopped giving out any type of credit to business owners.
When businesses can't stay open for business, they shut down. When people are out of work, they don't get a paycheck. Without a paycheck, they stop buying. Then the economy shuts down.
The government didn't want that to happen...again.
Now, I don't know exactly how it went down but I imagine it played out something like this. Imagine the bank is a lower-echelon thug and the bank is a gangster named Bruno, dwarfing the thug in size.
Bruno to thug: "Come here!"
Bruno drags thug forcefully by his ear into a dark alley, probably around 1am.
Bruno: "Now, I just want to make sure we have an understanding here. We don't want a replay of the Depression so, no matter what, we're going to keep lending money to businesses to keep the economy from collapsing completely."
Thug: "Or else what?"
Bruno: "Or else I'll make your life very miserable."
Thug: "And how's that?"
Bruno: "You don't wanna know. So...do we have an understanding?"
All the while, during the conversation, Bruno was punching his hand the whole time to drive the point home.
And that's how I envision that it went down. Take it or leave it, that's a symbol of how it pretty much went because nobody can quite pinpoint what the threat would have been but suddenly, around 2010, banks not only started offering business credit but they were raining it down on businesses whether they needed it, wanted it, or not!
Of course, there was a single criterion to giving out this money to businesses. Based on the major reason we had the credit collapse to begin with (which was non-qualified individuals getting loans on houses they couldn't afford in the first place), the banks had to be careful with lending out business credit.
And no, it had nothing to do with having business gross receipts (i.e. "business activity"), businesses that were "well seasoned," or businesses with a lot of built up business credit.
And it definitely had very little to do with whether the business had a Dun & Bradstreet profile with built business credit either. (Surprised??)
Unlike the "old days"(just a few years ago), personal and business credit now go hand in hand. You have to boost your personal FICO to about 720 or above ("mid" score) in order to fully qualify for endless amounts of business credit.
Yet surprisingly, this is fairly easy to do!
So, I'll quickly lay out the very simple steps of bolstering your personal credit before delving into the business credit part.
1) Pull your "tri-merge" credit report. I recommend using Experian.com and paying the $39.95 to pull all 3 reports which will include the FICO for each. (Don't fall for the $1 bait-and-switch deal because they'll bill your credit card forever for some monthly monitoring service that you don't need.)
2) Dispute everything that's negative. This includes "hard" inquiries. In this step, you'll also fix personal information including phone numbers and addresses to make sure your account is current.
3) Start rebuilding personal credit at the same time by getting yourself a car loan or lease (if you don't have one) and getting 2 credit cards: these can be secured or unsecured depending on what you qualify for in the present state of your credit. Use the credit cards and never exceed 45% of the total credit line in charging activity. Pay your car payment each month on time. This process will automatically build credit for you while you're chiseling away at the negative things on your credit reports.
4) Keep disputing and disputing and disputing while using other critical strategies to get these negative things removed off your credit reports. The more consistent you are with the process (by disputing every 35 - 40 days), you'll have Triple A credit within a few short months...especially while rebuilding at the precise same time. (That's the key!)
In the meantime, you can start the process of building your business credit at the same time. This also can be done in just a few months.
Here are the steps:
1) Get yourself a corporation. Yes, it helps somewhat that you have some "seasoning" which means the age of the corporation. Two years seems to be the "magic number." So, if you already have a corporation that's 2 years or older, you're ahead of the game. If you don't, that's okay. You can consider getting a "shelf" corporation that's already seasoned 2 years for you or you can start from scratch (incorporating right now) if you have a long way to go with your personal credit (i.e. just filed for personal bankruptcy). By the way, your corporation needs to be in your home state and not in Nevada (unless you live there or you are foreign to the U.S.).
2) Once have your corporate resolution documents (after incorporating), get an EIN (employer identification number) with is equivalent to the "social security number" of your corporation. You can get this number at the IRS.gov website.
3) Open a business bank account with a large bank like Wells Fargo or US Bank. You need your EIN in order to do this.
4) Get your first business credit card. If you're still working on your credit, go to Wells Fargo and get a secured business credit card. They are the only bank that offers this program right now. Otherwise, get something like a Chase Ink credit card or other business credit card that's unsecured if you have at least a 680 mid FICO score.
5) Use the hell out of that single business credit card. Use it, pay it off, use it, pay it off. Keep doing this. All activity will be reported to Experian Business using the company's EIN. Use this card for 6 months and wait until you get a business credit card offer in the mail. (Always fill in the application and mail it in. Never apply online. It's weird but when a human being has to type in your application information, it usually gets approved. When you apply online, a computer makes the decision on your credit worthiness...and they are pretty hard to surpass because one minor "glitch" on your credit report can throw you into a "decline" as far as the computer is concerned.)
Within a year, you'll have tons of unsecured business credit cards, adding up to at least $100,000. By having (and using then paying off) these credit cards, you'll qualify for all kinds of unsecured business loans.
Now, I have one secret for you that a lot of my students have been asking me about for years and it goes somewhat as follows:
"So, if I have $100,000 in business credit cards, how can I tap into that money to use the cash as a down payment since most credit cards don't allow for huge cash advances?"
And I have a secret. And no, you won't show up at a closing with a MasterCard telling the escrow officer to "put it on this card." (It doesn't work that way.)
In the next entry, I'll tell you exactly how to tap into that credit card cash. (I think it'll surprise you.)
The other day I sent you an email about my recent Bank of America experience with a personal vs. business credit card.
And I think I proved that you'll always get more -- much more -- when it comes to business credit, even if you have a fairly new business.
Here's an example of the power of taking a conscious effort in building business credit for your company:
Because of all the promotional materials, ad space, trade show booths, equipment, raw materials, and printing I have to do for my newest company (which is only 2 years old), I've been using my business credit cards a lot.
On the other hand, Global Success is over 5 years old but I've used my business credit for that particular business minimally due to wanting to stay as solvent as possible.
Britney at US Bank talked me into a business credit card for my newer company and for Global Success. Since I was doing other banking business there I said, "Sure, why the hell not?"
Both companies were instantly approved for business credit cards except...Global Success got approved for much less! What?!
Let me reiterate: The older company with more "seasoning" that has made millions every year (as per our annual tax returns) is approved for...less? Much, muchless?? WTH??
Then I put 2 & 2 together in almost an instant.
Because I've been consciously building credit for the new company (because I know what the hell I'm doing due to plenty of practice), the new company has kick-ass credit while the other one never had the need for credit and therefore didn't build it up well enough.
The newer company is only 2 years old. Two years and 3 months, to be exact. There is only one good tax return (for 2012) that actually showed that the company did decent (but still not as well as Global Success). The year before was at a lossdue to its first year being in business.
I didn't start actively building business credit for this new company until I got anAmerican Express card for it last summer. Then I got a 2nd American Express card for the company about 6 months later.
I used those credit cards to death and all of the activity was immediately reported to my Experian Business credit report (through the company's EIN).
Last month I applied for a Chase Ink business credit card for the new business. It was instantly approved for an unsecured credit line of $18,000. (In the meantime, I can't get approved for a personal unsecured credit card for over $5,000 if my life depended on it!)
And I just mentioned that Bank of America just approved the company for an unsecured credit card with a credit line of $30,000.
Meanwhile, Britney at US Bank is shoving a $250,000 unsecured loan down my throat that I really don't need but I think I'm going to take it today. I can use the money to build up more credit simply by borrowing it and then paying it off within 6 months...or less, and never really using the money at all for anything.
Between this new loan and a small handful of business credit cards, I'm at $313,000 of unsecured credit not including the one American Express that has no pre-set spending limit.
And I pulled this off in less than a year without busting my ass or anything like that. All I did was get a couple of business credit cards, use the hell out of them, and...that's basically it! That's all I did!!
Okay, so there are a few other steps that I didn't quite mention. But it's all simple stuff that you have to work on regularly and religiously.
In the next entry, I'm going to break it down to you so you know exactly what you need to do to gain access to this type of credit and then, after that, I'll tell you how to access the credit for things like down payments on apartment buildings. (My strategy for accessing this credit, especially unsecured credit cards, will probably surprise you.)
I have this perpetual battle with some of my students who don't quite "get" how important both personal and business credit is in this day and age...
Yet they wonder why a bank won't finance them to buy a stick of gum because they have a 425 personal FICO score.
And it actually shocks and amazes them.
But think of it in terms of this:
If you were a bank and someone wanted money for, say, a $10 million apartment complex and yet they had no assets, no personal credit, no business credit, and can barely "vouch" for the fact that they're an American citizen (if they can even do that)...would you give up the money?
I didn't think so.
Remember the giant credit debacle of the 21st century? Remember when lenders were giving home loans with 100% LTVs (and even over 100% LTVs) to people who had "stated" income...meaning they simply "stated" what they made and they were financed?
And remember where that got us, right?
Yes, exactly right. Foreclosure-ville-galore!
And the banks don't want a replay of that. At least not quite yet. At least until they've forgotten about the 21st century lending debacle, that is.
So, in the meantime, it all boils down to credit.
I've been working diligently on my credit since I filed bankruptcy back in 2003. I've fought with creditors, even sued a couple. I've chiseled all the bad marks off my credit reports, even having hard inquiries removed.
Fixing and rebuilding personal credit came first. My personal credit was so bad that I had to get secured credit cards in order to start building credit. Between those and getting a car loan, I was on a fast rebuilding track for my personal FICO score. Within a year I dramatically increased my FICO just by doing those 2 things.
Once I got my FICO above 720, a whole new credit world opened up for me but...
It wasn't about personal credit.
You see...
I now have excellent credit. In fact, I have a banker by the name of Britney who calls me literally every other day to give me business loans. She called me yesterday (for the 3rd time this week) when I was standing in the middle of Universal Studioswondering what the "status" was of my considering her latest loan offer...which was somewhere in the neighborhood of $250,000.
I told her to call me back on Monday. I don't need the money. But maybe I can use it for something to keep building my credit. Or I'll just borrow the money, stuff it into a bank account, and then pay off the loan in 6 months to beef up my Experian Business FICO score.
One of the biggest changes with business credit is DNB vs. Experian Business. I've noticed a huge change in how to build business credit over the past couple of years. Building business credit used to be an endless chore that would be equivalent to holding down a part-time job just to keep up on it since DNB (Dun & Bradstreet) requires you to build (and maintain) your own credit profile.
And that sucks.
Plus they have limitations on which types of creditors you can have.
That sucks even worse!
Then Experian Business came along.
And it's freakin' seamless to work with.
For example, you have a Social Security number. You apply for a personal credit card and the bank uses your SS# to tie you to your credit profile. When you use the credit card, all of your activity is reported to your Experian, Equifax, and Transunion credit reports via your SS#. This happens automatically.
Experian Business works much the same as the above scenario except using your company's EIN (employer's identification number) to tie your business into its own credit profile. Therefore, any business credit card you use with the EIN attached will automatically be reported to your Experian Business credit report.
Automatically without you doing a damn thing except for using and paying your business credit card.
Told you...freakin' awesome!
So, why tinker around with DNB -- building profiles, fighting with a customer service rep over which accounts you can add to your profile, arguing with them over your tax returns -- when you can have Experian Business build credit for you? Just by using a business credit card??
DNB has its place in the food chain. But it's not really something you concern yourself with until you start needing higher dollar amounts such as $500,000+. Then you need to have some type of built up DNB credit.
Until then...you build business credit the easy way!
I have a 4-month Personal & Credit Mentorship Group starting on Wednesday, August 7th. It's my last group for the year.
This group will show you, step-by-step, how to fix and rebuild your personal credit while building business credit at the very same time.
And yes, you can still do this if you don't have a business that has "gross receipts" or tax returns. You can do this if your business is brand new!
In my next entry, I'm going to tell you how my newer company gained access to over $300,000 in unsecured business credit while my older company didn't...and why. (It'll actually surprise you! What'll surprise you more is how easy and quick it was for me to build up so much business credit with my new company in less than a year!)
A couple of days ago I laid out how awesome it would be to have someone fund your deals with 100% LTV but I think I may have skirted over something that's rather important.
It's awesome to be able to have access to these 100% LTV financial resources in my new2014 Motherload Resource Directory but, since these are private investors that you'll be working with, they're not just going to write you a check for any deal.
You do have to prove that your deal is a cash flowing investment. This is done through an executive summary and, in some cases, a mini business plan.
Each private investor has different requirements to what they want to see (and they let you know in full detail what that is).
Here's a few tips for you if you're interested in using these investors for your deals:
1) When doing your numbers on a deal in the CFE (Cash Flow Evaluator), make sure you account for a higher interest rate on a 100% LTV loan. This can range from 9% to 16% on average and these loans are typically interest only which means no principle is ever paid. If you borrow $1,000,000 you'll still owe that same $1,000,000 in 10 years from now.
2) Make sure you're targeting deals that are slightly underperforming where you can still get a deal on the asking price. You don't want properties that are at a 50% occupancy level and you don't want to pay top dollar for a fully occupied property either otherwise the numbers won't work on both accounts.
3) You will need to have a solid future proforma of the property regardless of how it's performing right now. Even a 100% occupied property (today) will still have a higher cash flow value in the years to come provided that you find the right value-add opportunities for the property. The more you can show a higher future cash flow value, the faster you'll be able to get private investors and lenders to write checks to cover your 100% LTVs.
So, again, private investors and lenders won't lend to you based on you knowing how to pick up a phone to call them and on the sheer fact that you're flapping your lips to hit them up for money.
You have to show them that you have a solid cash flowing deal.
Here are some ground rules when you get the 2014 Motherload Resource Directory:
1) Do not call any of these people unless you have a deal. Period. Otherwise they won't talk to you. (And I don't blame them because without a deal you're wasting their time.)
2) Make sure your deal has at least an 8% CAP rate at a 100% LTV.
3) The "hotter" the area, the faster these people will write checks for your deals. They love Florida, Texas, California, Arizona, New York, and most other states. Believe it or not, they're not seeing value in areas that are still borderline "depressed" such as Memphis, Atlanta, Detroit, and Las Vegas to name a few.
The deal on the Motherload is running out. Click on the link below to check it out:
The other day I saw this picture of a mansion in a magazine that some celebrity was on the verge of purchasing and I thought to myself...
How could someone -- anyone -- go from wherever they are in life and be able to purchase a mansion like this in 12 months or less?
Of course, my initial answer is that it would be improbable for most people to pull it off simply because they don't realize or believe it's a possibility unless they win the lottery or some great uncle who is a multi-millionaire kicks the bucket and leaves their entire fortune to them including a mansion, of course.
Then there are those out there who want this level of success, believe they can attain it, and even have a viable means of grasping onto it but...they don't follow through, work hard enough, execute their plan properly, or give up at the wrong time.
But what if...?
What if -- in addition to you already knowing the bona-fide path to financial success (i.e. real estate investing as a means of passive income) -- you had a means of getting 100% of the cash you need to invest in real estate?
And no, I'm not talking about transactional "wet" funding for flipping either.
I'm talking about being able to hit up someone like a long-lost rich aunt who is willing to shell out any type of funds for you on any real estate deal ranging from $250,000 to $100,000,000 provided that you can show her that the deal will make money (vs. being a loss).
And the terms?
Don't worry. She's not going to ask for a stake in any of your deals. She won't be asking for a piece of the monthly cash flow or a percentage of the gained equity.
All she wants is to be paid back...plus interest.
And because you've shown over the years through some wavering on what you wanted to do with your life, maybe a couple of failed businesses or stupid business ideas, and perhaps thumbing your nose at some of your creditors, your aunt isn't going to charge you the lowest possible interest rate. She's going to charge you between 9% and 16% depending on the deal and how risky it is.
But...this isn't a problem. Right?
After all, she is giving you 100% of the money needed for your deal so paying a higher interest rate isn't that bad of a deal, especially since she'll be forgiving of your past credit problems that may still be reflecting on your personal credit history.
If there was such an aunt in your life who could pull off everything I mentioned above...and knowing what you know now about how powerful passive income real estate investing is in MHPs, apartment buildings, and commercial-commercial properties...how long would it take you to be able to afford that mansion I was talking about at the beginning of this email?
A year? Six months? Less?
It would take as long as it'd take you to buy up as many properties as you could to buy the mansion and where this mansion would be. Obviously a mansion in Malibu is a lot more expensive than a mansion in Tulsa of equal square footage.
The bad news...you don't have an aunt who can do all of this.
The good news...I now have lenders who can!
It seems that we have fully economically "recovered" when it comes to the confidence coming back in the real estate market because I've seen some changes so powerful in the past couple of months that didn't even exist back in 2005.
And what is that? 100% LTV financing for commercial and residential-commercial real estate.
These programs are brand new, available through only a handful of private lenders, and the benefit to them is getting a higher interest rate on a market they now believe is "secure" based on the newly found strength in our economy.
Plus, this is also based on a demonstrated current and future value of the property you are investing in which means you aren't going to be going after vacant REO apartment buildings (not that there are many left anymore anyway) that need millions in rehab.
And yes, some of them are forgiving if you've had personal credit issues. (When I say "forgiving" I mean they'll accept minor or older credit problems provided that you've shown you started fixing and rebuilding your credit. I don't mean they'll accept you with a recent bankruptcy with 10 foreclosures piled on top, all in the past 12 months. No one -- not even God Himself -- would finance you with credit that bad. If that's your story, find someone --anyone -- to "partner" in with you until you get your personal credit squared away.)
For the first time ever, I'm able to present these sources to you in my 2014 Motherload Resource Directory. I have 6 of these 100% LTV lenders. I have 1 lender who works exclusively with Florida commercial properties. I have a lender that is actively and aggressively looking to fund properties at a 100% LTV but they want to be part of your deal as an equity partner.
Plus I have several more new lenders and brokers with a wide variety of different exciting loan programs available for the first time in my 2014 Motherload Resource Directory.
If you've purchased a prior version of the directory, you'll get an "upgrade" discount. Otherwise, you'll still get a discount for my 4th of July Blow Out which is ending soon.
If you've missed any other offer I've ever done before, this isn't the offer you want to miss out on. Period.
Everybody knows that the world of real estate investing is all about other people's money (OPM). Anyone with a rich aunt or an endless supply of money can easily make money provided that they're smart enough to know the appreciation value of real estate (instead of blowing the money on dope and hookers...or some other such nonsense).
If you've been struggling with getting money for your deals and have been frustrated with the lack of resources due to the "dry spell" our economy has undergone in the past 7 to 8 years, here's your lucky break. (Finally!)
I have a short audio seminar about this phenomenal new Resource Directory athttp://www.monicamain.com/motherload_resource_directory/.
This deal ends very soon and once it's over...it's over!
This morning I took my daughter Brie to breakfast at a local restaurant that we often frequent. This was the second day in a row that I took her since she's officially out of school for the summer.
Yesterday morning and this morning I saw these 2 people in an old Pinto with 2 dogs. As with most people who feel they are in an uncomfortable situation, you tend to quickly skirt past people who are down on their luck, especially in a neighborhood like mine that is considered upper-middle class. That's what I found myself doing yesterday.
This morning was different...
They had this little puppy who we eventually learned was called Zippy. Brie wanted to pet the little pup and I let her. They had a much older dog called Blue, I think.
My heart went out to these people. Here they were in the parking lot wedged between a restaurant and a discount hotel/motel and this older couple (probably in their 60s) had everything they owned stuffed into this small beige beat up 70s car. With 2 dogs.
It's not my job or right to judge anyone and I don't. But these types of situations always make me ask myself..."What happened to these people that they ended up like this?"
I asked the man politely if I could offer him some money to help him out. I mentioned that I didn't want to be disrespectful but I wanted to offer him something. He said it would help get the dogs some food and he graciously accepted what I would offer.
I reached into my purse and counted out five $20 bills then handed the cash to my daughter so she could benefit from the joy of helping someone out. (This would be her second experience in 2 weeks giving money to someone who is less fortunate.) He thanked me and we went into the restaurant.
While we were sitting at the table, Brie started asking me questions about them. She asked about why we gave them money and I mentioned to them about how they didn't have a home. They were homeless and lived in their car.
This was the first time she was introduced to the word "homeless" and what it truly meant. And it made her sad. Her sadness touched my heart because she didn't understand why someone wouldn't have a home in a world (that she knows) as being abundant. It didn't quite register.
Both Brie and the homeless people are correct in the reality of their life.
Brie is correct in that life is abundant and has the ability to give everyone anything they want if they go for it.
The homeless couple are correct in that life is lacking because somehow along the way they chose that lifestyle or chose to believe that poverty is a reality.
During breakfast I pondered how someone like that could possible get out of that situation. What could you do if you're not given a break by anyone? How could you possibly shift out of that and into something better?
I thought of the possibilities.
Maybe collect cans for cash. Maybe get a post office box as an address. Maybe scrounge around Good Will to find some things you can sell on eBay. Maybe buy a cheap camera and use the computer with an Internet connection at a library to start a small eBay business.
At least that's what I would do.
Unfortunately, it's not just the mechanics of pulling out of their circumstance that's holding these people back. It's the heavy black cloud that looms over them day in and day out, blocking out any possibly hope they could ever have about their future.
Which is why they have 2 dogs. These dogs brighten each day for them and are critical for their survival. Those dogs give them the hope that they need each day.
As we left the restaurant, the man (who apparently didn't realize I gave him $100 before) was ridiculously grateful and said "thank you" over and over again. His wife (I presume) was actually sitting in view this time (since she was hidden in the driver's seat before) also profusely thanked us for the money and said something about being able to get her car registered. I quickly glanced at the tags of her license plate and saw that they expired at the end of this month...in a few days.
I looked at the woman. She looked somewhat glamorous and reminded me of Loni Anderson (if you remember who she was). If she was cleaned up and dressed up, she could easily walk a red carpet anytime anywhere.
What the hell happened to these people?
I told her "God bless" and I said that I hoped things got better for them very soon. She started wiping tears away and my heart dropped because I knew the truth...
This can happen to any of us.
Once upon a time these people were probably considered "normal" by society's standards and they hit a rough patch. And now they live in a car in a restaurant parking lot.
Again, none of us are immune to this possibility.
When you travel through LA (as I frequently do) and see a matted-haired homeless person pushing a shopping cart and wearing every bit of clothing they own on their back in 90+ degree weather...talking to themselves; what do you think?
Do you ignore them as a crazy person?
Or do you think..."What the f#@* went wrong?"
Do you think they came out of their mother's womb as a total whack job that talked to themselves and aspired to live on the streets of LA, talking to themselves?
No, my friend. Something snapped at some point in their adulthood. They couldn't handle the pressures of everyday living and their brain shut down in parts. Talking to themselves is a means of coping.
I am sometimes condemned by family members for giving money to strangers. Other people who think they "understand" why I do it think I do it as a form of tithing.
Both sets of people are wrong.
I do it because life has beat the sh** out of me many times and I understand the very real possibility that any one of us (including myself) can end up like those people.
I do it because I would want someone to help me, even a little bit, if I were in that situation.
I do it for "brownie points" because I hope the Universe will give me a "pass" and not shove me into a situation like that against my will.
And the main reason I do it because the only people who feel truly grateful for what I can give to them -- even if it's a few dollars -- are those who have been humbled by the severity of the worst that life can dish out.
The only time I ever feel a sincere blessing from anyone is when I can give to someone who is in need the most. And I need to feel their genuine blessing as much (if not more) than they need a few dollars.
Why?
Because when you're someone with money, everyone who contacts you (including and especially "friends" and family) wants money. And when they get it from you, they want more. And when they get more and you finally tell them to f#@* off after several years of the financial abuse, they immediately come to hate you and everything you are.
And it makes you feel sad because you are who you are after a time.
And that's where I'm at.
So...how does someone who is seemingly living a normal life spin out of control and end up living in a Pinto in a restaurant parking lot with 2 dogs when they should be retired, playing with grandchildren in the backyard, and watching Jeopardy every night?
The truth is this...
The mind/brain goes first. And when I say "go" I don't mean that they snapped or went crazy or anything like that. I mean that there was a slight shift in the thought process. Somewhere along the way they lost focus and maybe one or more things occurred in a short time frame that flushed their confidence down the drain where before they believed they could take care of themselves.
It happens a lot. Someone loses a good job. Then they lose their house. They find themselves living in Mom's basement. There are no job prospects. They take to drinking. Mom kicks them out.
Or there's a divorce. Or someone close dies.
Or some other such scenario.
Bottom line: something throws them off kilter and they lose confidence in themselves.
What am I getting to here?
It's simple.
Just as easily as you could be thrown off kilter, you can shift into a different direction to get what you want in life.
How?
It's so ridiculously simple that you'll probably discard it as being insignificant but here it is anyway.
1) Decide: you have to first decide that you're ready to go into a different direction in your life. To "decide" actually means "to cut off" other alternatives. It essentially means get off the fence and go in one direction with confidence while letting go of another possibility or reality. You also have to decide what that different direction will be (obviously).
2) Know-how/mechanics: once you decide which direction you want to go into, you need to get the proper know-how or mechanics (in order) that have to happen in order to achieve what you're doing. This includes education which needs to ultimately turn into a step-by-step action plan that you can follow in a specified order.
3) Action: do it. Period. Sitting on your ass thinking about it, talking about it, and dreaming about it will get you absolutely nowhere quick! My "smarties" or those of you who have high IQs, advanced degrees, or just think too much at 2am instead of sleeping end up thinking yourselves right out of success because you have trained your brains to weigh the "cons" against the "pros." And no action ever happens. So, do me a favor and "dumb yourself down" so you can take action and stop thinking about all the "what ifs" that will probably never happen.
I have to admit that in 2011 I started losing focus. When you find that you're losing focus, it usually means that something big is going on (positive or negative) or you're just done with how you're spending you life (i.e. sick of your job, business, etc.). In my case, I was getting a divorce then getting married all within about 90 days. (I know, probably not the best plan.)
No matter what I tried to do to snap my focus back, it continued to wane.
This is when I discovered that it was also time for a life change as well. Welcome to midlife crisis-ville.
In order to continue growing as a spiritual being, you sometimes have to shake things up a bit and venture out to do other things otherwise your soul starts to die.
Last year I was able to get my "groove" back with my new business.
I first started my new company to demonstrate how easy it was to set up a New Wealth Ninja business to become my own "case study" for my students.
Then this little "project" turned into a lucrative business venture.
I started to notice something weird happening...
My students knew about my new business (through my New Wealth Ninja trainings) and started to hit me up about how they could do it to.
And this is never a good sign when my students want me to talk about a completely unrelated business at a real estate investing seminar. Or maybe it is a good sign because I decided to have an Underground Secret Event solely on this Aggressive Income on Steroids and Speed method that I sort of stumbled in as a side project.
Little did I know that this side project would not only be incredibly profitable but it also saved me from careening off balance (where bad things could have happened to my financial and business future).
You'll not only discover a completely new and highly profitable business model that I've never fully explained or laid out but you'll also learn how to avoid the many pitfalls that I barely survived in this business. You'll also learn the multi-faceted realm of distribution of products from having a small home-based Internet business to having a major multi-million-dollar empire.
There's also going to be a very special guest speaker who can tell you about some incredibly profitable (and cheap) products including insider information on which of these types of products sell the most.
Ronnie will also be talking about his views of the business, the pitfalls he had to overcome, and how to quickly catapult yourself to success with some strategies that made all the difference.
