Today, Justin Wilmot elaborates on how not all credit is created equal and how it’s not always a bad thing to use credit for your investments.
By using cheap debt or a business line of credit for your wholesale deals, it can allow you to continually build your business.
Mike: Welcome back to the flipnerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Justin: Hey, guys, Justin Wilmot here, and I’ll be your host for today’s FlipNerd show. And today, we’ll be talking about using credit to fund wholesale deals.
Mike: This REI Classroom Real Estate Lesson is sponsored by uglyppportunities.com.
Justin: All right, look. Not all credit is created equal. You got Suze Orman out there preaching to you that debt is evil and debt is bad. And indeed, debt is bad if you are using it for going out to eat and not paying the bill, right? That makes common sense to most people, but, hey, we’ve all been there and we’ve all done it. So not all debt is created equal.
There are ways to obtain business debt and business credit in order to fund deals. And truly anybody can do this. You really don’t need a phenomenal credit score. This is something that a simple Google search can help you find out. There are a lot of . . . Fund & Grow and Flip and Grow, these are all companies that will help businesses that are established find business credit. You can even get high credit lines on a credit card and buy properties on a credit card, depending on what state you are in, or how long you’ve been doing the deals. So what this means is using credit to fund a deal at any interest rate, I don’t care if you are paying 18%, 20%, which is high, right? But debt is cheap these days, debt is extremely cheap. And the average person is getting credit for between 3% and on the high end 18%. It depends on which vehicle you take.
Now if you can obtain debt, obtain credit, and close on a smoking hot deal, and relist that deal on the MLS, and put yourself into a bidding war, no matter what market you’re in in the country right now, if you’re in an end market that has got anything outside of Timbuktu or rule, you’re going to have a bidding war on a good deal. Everybody is buying right now. So imagine obtaining business credit in order to start doubling your profits on a wholesale deal. You can use revolving credit, you can use business credit, maybe you can get private loans or a family loan, but at the end of the day, this is a method that going to catapult a wholesaling outside of a fix and flip business. This catapults wholesaling.
So having the availability to build up a Dun & Bradstreet number for your company and corporation or LLC, and eventually get to the quarter million, half million, million, multi-million-dollar mark, is something that separates small players from big players. Imagine cheap credit, cheap debt in order to profit from.
Please don’t mix this up with personal credit. Completely different things. You go out today, take this advice and end up finding a company that can get you $50,000, $60,000, $100,000 dollars from credit, business credit, please don’t mix this up. You don’t go out to eat, you don’t take the wife out, you don’t pay any bills with it. It is 100% allocated to the acquisition of a property that is going to give you infinite returns, close to infinite. So imagine that, cheap debt, now, especially with everything that is happening in the economy right now, it’s only going to stay cheap, I believe. We’ll see.
So I highly encourage you to look into business lines of credit, revolving credit, start putting some feelers out there and obtain some debt, good debt. Don’t listen to Suze Orman. She’ll keep you broke.
Mike: HomeVestors, the “We Buy Ugly Houses” folks, is a franchised system of hundreds of real estate investors that have purchased over 65,000 houses. If you’d like to learn more about the most powerful real estate investing system in existence, whether you’re a pro looking to take your business to the next level or whether you have no experience at all, but a burning passion to be successful in real estate investing, please visit flipnerd.com/ugly to learn more.
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