Why is business credit a powerful tool in the expansion of your real estate portfolio? Do you know the power of having business credit cards for your investment? That’s something very difficult for you to tie all the pieces together. Here you will find some answers about getting started with business credits.
We have the one that we know the most which is the personal credit, and then we’re going to have your business credit. For your personal credit, it’s pretty obvious, you will need either a Social Security number or maybe an ITI number. For those who are international investors who don’t have access to Social Security, you can still apply for an ITI number.
Then you’re going to use this to build up your FICO score. When it comes to business, as you know you’re going to need an EIN. An EIN usually is a number that is the equivalent of the Social Security number and it’s issued upon the creation of a business legal entity, call it an LLC, call it a partnership, call it a corporation, all of those legal entities are going to give you access to an EIN.
The access to funding
The access to funding is based on the potential income of your business. Call it a store, call it your real estate. In this case, you have to put emphasis on running your real estate portfolio like it is a business. It is very important that you view that as a business so it can be treated as such. Because you are running a business, and because the income potential of your business is typically going to be higher than an individual salary, you will get more access to funding. Funding is actually a big thing.
It’s actually given to you in higher chunks that you will get under your personal. Typically, mortgages are usually capped by your personal income. Depending on your credit profile, it can be up to three or four times. In terms of funding, let’s say you have a building complex, and every month, you get $20,000 worth in rent, the funding is going to be based on that $20,000 multiplied by 12, and whatever criteria they utilize to do that.
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In essence, what this does is that it allows you to exponentially grow, it allows you to expand. If, for example, you have four LLCs: LLC 1, LLC 2, LLC 3, and LLC 4. Assume that for each of the LLCs, you have a building complex. Now you’re having, let’s say, access to $1 million on LLC 1, and then $1 million on LLC 2, on LLC 3 another million, and on LLC 4 another million. We’re talking $4 million worth of funding access.
In terms of credit cards, it’s also an amazing tool because, again, you can apply for business credit cards and it will not appear on your personal, it will not impact your FICO score.
Other Tools that work very good
We have mentioned before Fund & Grow as a service, and how this company can help you gain access to up to $250,000 worth of business credit cards. None of that is going to go into your personal. You can actually use those credit cards for the investment or the expansion of your real estate portfolio.
You can have current mortgages, and then you have services like Fund & Grow that help you get access to additional credit cards. Then you can actually add up to $250,000 in fundings for that investment and your real estate portfolio. Definitely, a very powerful tool to leverage.
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