Get Out of the Catch 22: Use Business Credit for Real Estate Investing

Do you find yourself in a Catch 22 concerning your real estate endeavors?

You want private money to close on real estate investing deals, but you need to close on real estate investing deals to attract private money. People who are just getting started in real estate investing have a hard time attracting private money, simply because private money lenders don’t want to invest in newbies because the loan is secured by a note and a deed of trust.

From a private moneylender’s perspective, they don’t want to lend out money for someone to experiment with it, and that’s understandable.

Once you have several properties in your portfolio, you’ll be setting yourself up in a position to attract people who will want to work with you. Especially once they become aware of your good track record and start seeing you as successful.

Until then, what are you to do for funding? Well, an alternative option is Business Credit Cards. The way these cards work is with a personal guarantee. You have to understand that lenders typically look at how new you are to the business. It doesn’t matter to them whether or not you incorporated yesterday or five years ago. The basis for funding is to have full documentation to include tax returns, P&L Statement, and an 80 Paydex score. So if you don’t have those documents, you have nothing to prove how successful your business has been, or currently is.

Think about it: why would a bank give a person funding under these circumstances? Lenders took a lot of time earning their money and want to put into the right hands, hands they deem responsible. So, they qualify you, but they also make exceptions by looking at your personal credit file of how you managed your personal finances, which is proven by your FICO score.

Lenders think that more than likely the way you handle your personal finances will be the same way you will handle your business finances. They typically develop the belief that if you are prudent in governing your personal financial obligations, you’ll be prudent in governing your business financial obligations.

You are then considered a safe bet because you honor your commitments. Now if you don’t have a high FICO score in the 700s, and have a multitude of inquiries, don’t fret. You should still apply, because for one there aren’t any upfront fees and you will receive a funding estimate within 48 hours with only a soft pull on your personal credit. That way if there are any discrepancies, you can work them out and get funded within a short time period later.

Business Credit Cards do not affect your debt to credit ration either, because they do not show up on your personal credit file unless you default, but the inquiries do and those can be worked out as well. Payment history is the only concern of Business Credit Card lenders. It’s irrelevant to them if you max out the cards.

Avoid wasting valuable time in a catch 22 situation seeking out private lenders. Apply for business credit today and get your funding estimate within two days of application. Once approved and awarded, convert that credit to cash, get a mortgage, close the deal and repeat the cycle over and over again to build up your real estate portfolio. Then if you decide to seek out private lenders, you’ll have the successful track record they’re looking for.

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Entrepreneurship: Practical Ways to Handle Financial Matters Like a Pro

As a first time entrepreneur, you may be wondering how to handle the financial matters of your business. You’re not alone; all entrepreneurs have dealt with issues of funding, debt, savings, spending, and paying yourself.

Starting a business without testing the market for your product or service, is taking financial risk especially if you decide to fund your business with other people’s money. If you lose the business, the debt still has to be re-paid. Instead of investing a large amount of cash why not consider using business credit cards.

Funding and Debt:

The main factor to getting approved for business credit cards is based on your credit history. Once approved, there are several things you should do:

  1. Establish strong payment histories to build business credit.
  2. Keep balances as low as possible by not carrying more than 30 percent of credit limits on any of the cards to boost credit scores.
  3. Pay balances in full and on time every month.
  4. Make purchases related to the business, and only for what’s needed to keep the business running.

Spending:

We all have different spending habits, but it’s best to develop a spending plan early on. This plan will keep you abreast of your budget and let you how much is afforded to pay down debts each month.

Savings:

There are also business savings accounts. Most people think of savings accounts for personal use, but they can be a great addition to your business:

  1. Business savings accounts help prepare for the unexpected if allocated to handle emergencies.
  2. Business savings accounts are liquid assets that can be moved into business checking accounts to pay vendors, contractors and anyone else owed without interfering with the daily budget.
  3. Business owners are responsible for taxes, and with the daily operations this task may be overlooked. However, if ten percent is saved from every business transaction, this money can be used to pay taxes without interfering with the budget.

Paying Yourself:

Finally, there’s the issue of how to pay you. If you are a sole proprietor without employees and not much overhead, you pay yourself what you earn in sales minus your costs, savings and taxes. To pay yourself from an LLC, you can withdraw money from the company accounts or give yourself a salary.

Starting a business may be easy, but the hurdle is knowing when and where to spend money. It’s very important to only spend where necessary. Although it’s been determined to make small purchases starting out, this is not a reason to cut corners with what your company needs. Handling the financial matters of entrepreneurship can be daunting, but if you establish a plan for funding, debt, savings, spending, and paying yourself upfront you’ll be that much closer to reaching money-mastery level.

 

Talk May Be Cheap, But it Drives Sales

You may have heard the old saying, “talk is cheap, but it takes money to buy a farm.” In the business world, talk can be expensive in regard to how it can help increase your sales and attract interest to your brand. So what does this really mean?

It means that as a business owner you have to speak your customers’ language by getting to the point without wasting their time. People want to know what it is that you do, who do you serve and how you deliver your product or service in the most clearest possible terms.

If a customer doesn’t understand you, they won’t buy from you; point, blank, period. You may be thinking, “Who doesn’t want to be on the cutting edge creating new terminology specific to their business?”

That may work for the big dogs, but for small business it isn’t as convenient. Learning a new language takes time; time customers don’t want to invest. The downside is that you may lose them to your competitors.

Speaking your customers’ language means not trying to look smart. That can come across as being pompous, even though that isn’t your intention. You may be used to talking technical jargon, but that can turn customers’ off and lose their trust. People want to communicate with someone who understands them.

There are three things you can do to improve communication with your customers:

  1. Learn to Listen: Customers have their own way of dealing with problems based on their experiences. Your job is to take the time to understand things from the customers’ perspective and implement their language into your business model. This can be accomplished by simply picking up on key terms and phrases that they use continually to describe their situation and needs.
  2. Start Connecting: The only way to really understand what your customer wants and to give them the best possible service is by interacting with them. Even though you are the expert, your customers can teach you a thing or two if you are willing to open up and consider their feedback. Looking from the outside in often proves helpful, because they may see things you have overlooked.
  3. Use the Right Communication Tool: Depending on your industry, using the right medium of communication is key. It’s up to you to decide which method is the fastest and least obtrusive to your customers. Is it better for your business and will it make your customers happier if you communicate with them via phone, email, or in person?

To be successful in business and bring in the sales, you as the business owner must take customer communication seriously. Customers are conditioned to expect interaction and service. This can simply be accomplished by learning to speak their language and in turn they will engage in your brand.

Apply for Business Credit

How to Play the Entrepreneurship Game and Win

To win at being an entrepreneur, you have to be extremely confident. You must settle in your mind that no one around you is better than you, and it’s an equal playing field.

This may prove difficult for women, since women tend to be more humble and less likely to be overconfident. Men tend to take credit for their success and blame their failures on someone else. Women are typically the opposite of this by taking credit for their failures, and giving credit to someone else for their successes.

Success and failure is really the learning curve every entrepreneur can take advantage of. It’s the gauge that can be used to measure one’s ability on whether they did a great job or not. And the more a person fails, the more information they have available to use for their improvement.

The unfortunate thing is that when women fail they are less likely to try again, unlike their male counterpart. They may also give up on their dream of being an entrepreneur. Women tend to become disheartened, which is certainly understandable and sometimes work in their favor, because they are less likely to go down that same dead end path again. Whereas men may keep trying to succeed at a failed business over and over again, losing money in the process.

Even though there appears to be quite a difference between how men and women approach entrepreneurship, the common factor that both genders need to succeed is to have and display an abundance of confidence. Studies show that being overconfident increases a person’s social status, and they are more likely to be respected and influential in the business arena.

To become more confident and win in the entrepreneurial game of life, start by implementing these five simple behaviors into your daily routine:

  1. Make good first impressions: Smile, use good posture and give great eye contact. Body language is the most powerful way of communicating confidence to others.
  2. Accept compliments graciously: Never downplay yourself or your accomplishments. This allows others the opportunity to sow into your life, and it shows you are appreciative of what others think of you.
  3. Do not brag on yourself: Confident people do not need to constantly remind others of how great they are and about the great things they’ve done. It’s the insecure individual that needs constant reaffirming.
  4. Always talk positively: No one wants to take on your problems; they have problems of their own. Being critical and complaining doesn’t help you in any way. Turn your thoughts to something positive so that the centerpiece of your conversation is profitable to all, and it helps you to be more solution oriented.
  5. Don’t dwell on the negative: Thinking about difficulties and disappointments can halt your progress. Start taking action to fix the problem. For instance, if you run out of money apply for business credit that can easily convert to cash.

Everyone experiences setbacks in life and in business, but the confident person sees it as an opportunity to grow and get better while still making a valuable contribution to society.

Employee to Entrepreneur: Making the Switch Successfully

“If you want things to change in your life, then you must change.”

Jim Rohn

You may be tired of the 9 to 5 and think deep down you’d make a really good real estate investor, but your day job pays the bills. How do you make the switch from employee to entrepreneur successfully? There has to be a shift in mindset and by taking hold of a few fundamental truths about entrepreneurship does that.

Truth 1:

Starting your own business is being the CEO of your company. You will be responsible for making all of the managerial decisions, unlike an employee who waits to get told what to do. Jumping in headfirst may be a bit overwhelming for you, so this should be a gradual process. Don’t quit your day job yet until you can manage your time effectively.

Truth 2:

You will have to make concessions during the interim period. Small business startups take time to turn a nice profit. You will have to know in advance how you will support yourself until then. Having enough cash or credit stashed away to support you and the business for at least a year is ideal.

Truth 3:

Having a working knowledge of money management is crucial. Being able to understand financial statements will keep you abreast of how much money is being made, as well as how much money is being spent. Understanding of this will help keep you from being in the red and staying in the black.

Truth 4:

You know the saying, “Jack of all trades, master of none.” Well the opposite is true for the entrepreneur. An entrepreneur in the beginning stages will have multiple roles to fill, at least until staff is hired or tasks are outsourced. You may find yourself being the salesperson one day and customer service the next and the order fulfillment person the day after that. Employees have set job descriptions that they complete day after day, so their day may not be as hectic as the entrepreneur.

Truth 5:

Entrepreneurship requires having the mental energy, focus and tenacity to succeed. Business trends change all the time, and as an entrepreneur you will have to evolve with your industry. This means learning all you can all the time to be on top of your game.

Truth 6:

It can be lonely at the top. Well, maybe at the top of your kitchen table is a better way to put it. This is just because you are no longer going out into the corporate sector. But, the loneliness can be overcome by doing all the cool things entrepreneurs do: lunches, networking events and the like.

Making the switch from employee to entrepreneur can prove successful if you grasp hold of these six basic principles. You will want to plan ahead before quitting your day job by having financing in place, being knowledgeable about financial statements, being a good steward of your time, being decisive since you are now in the driver’s seat, continuously improving upon your skillset for your chosen field, as well as networking with likeminded individuals and groups.

 

 

 

How Being Socially Savvy Can Help Grow Your Business

Every which way you turn, someone is talking about social media. It’s the place where everyone engages, where we humans connect with likeminded individuals whether for business purposes or personal pleasure. Think of it as a tool that allows you the business owner the opportunity to influence people, not only in your local community but people throughout the world. Being socially savvy can help grow your business and here are three tips to help get you started:

Tip 1: Determine Your Platforms

When first planning to use social media for business in order to connect with people, many newcomers feel a bit overwhelmed because they do not know which platforms to use, so they sign up for all of them and end up using none of them.

First, find out what sites your customers and potential prospects are using on a more regular basis and set up accounts with those few sites. The key to having successful relationships, business or personal, is all about being consistent with the communication, and to communicate one has to be present. Having accounts with too many sites can cause you to lose your focus and appear unengaged, which will testify against your character as a business owner.

Tip 2: Show Genuine Interest in People

Yes, you have a business to run and money to make, but that isn’t going to happen with the help of social media if you don’t show interest in what your customers need and want. It doesn’t matter if you are a real estate investor or if you own a cleaning company. The success of a product or service depends on solving the customer’s problem.

Social media is the perfect platform to perfect your business, because it gives you the opportunity to hear what people really want, and that gives you the advantage to improve upon your product or service. It also allows for customers to get to know and trust you. Taking the time to listen to peoples concerns, and showing genuine interest in helping them enables a far better chance for you to deliver well thought out solutions.

Tip 3: Stay Informed

Being socially savvy has several meanings, but the take away for this tip is that you have to stay on top of your game. This is accomplished by keeping up with the trends of your particular industry. Take classes, go to seminars; you can even join 100pf Real Estate Investing Coaching Program.

In order to win professionally as well as personally, it requires being informed. Being the person in the know, is the person that possesses the understanding of the how and why of a situation. You will be the go to person who gets the job done right, and your customers will thank you for it with repeat business and referrals.

When you use social media you’re not wasting anyone’s time; you’re making valuable contributions to the lives of the people you interact with. Being socially savvy enables you the business owner to build strong interpersonal skills as well as provide you with a greater sphere of influence, which will help grow your business.

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Get Paid to Have Fun: How to Profit from Social Media

In order to get paid to have fun, you have to bring one of two things to the table: a following or content.  If you have either of these items and it’s better to have both, you can take advantage of social media and really profit from what you love to do.

As an online entrepreneur, I get paid to have fun.  While others are on social media for personal reasons, I’m on social media for business marketing as well as to connect with people.

Basically, this means that the majority of my time I spend on social media is as a producer and not as a consumer.  Don’t get me wrong, there are times when I’m finished producing content and answering messages and comments on my closed Facebook groups that I’ll scroll through my news feed to see what’s going on.

So, even if you really just enjoy being on social media there’s still no point in having 5000 followers, subscribers and friends if you’re not making money off of it in this day and age.

Monetizing your following can be as easy as joining an affiliate marketing program. If you don’t know what your followers want and cannot figure out which affiliate product to offer them, do a survey.  People will generally tell you what they want.  It’s always better to find a demand first and fill that need, than to have ordered a large volume of inventory hoping one day someone will buy it.

It’s perfectly okay if you don’t have a social following.  As long as you have content you can monetize it. Content equates to the value you can extend to the marketplace for a set price. You can take your content and partner with someone who already has a following. Maybe there is an individual at your workplace you have an established relationship with, or you have an outgoing family member with a lot of followers. Either of these people can be an ideal partner.

Getting paid to have fun is tangible, but it does require having followers or content or both and it isn’t without cost. You will need a website, marketing material, inventory, or digital products as well as financing to set up your business to meet state laws.

Business credit cards are an alternative funding source and the application process isn’t as stringent as with traditional lenders. Apply today for a free funding estimate without having a hard pull reported on your credit file.

 

How to Build Business Credit in 3 Easy Steps

Now that you have started your business, where do you go from here? The next thing to do is to build business credit in three easy steps.

Step One:

One of the first things to do is separate your personal finances from your business finances. That requires opening up a business checking account. The money in your business checking account will be used for all of the business expenses. Do not mix your personal money with your business money, meaning: do not buy groceries with your business debit card, or write personal checks to vendors to pay for supplies.

Eventually, you will see the benefit of keeping the two separate as your business grows to the point that your personal finances can’t keep up with the business demands.

Step Two:

Before you step into the bank to open your business bank account, understand that a business bank account will need an Employer Identification Number and proof that your business is registered. To get an EIN, go to the IRS website and first determine your eligibility. Then use their preferred method by clicking the “apply on line” button and complete the application in one sitting.

Contact the Secretary of State’s office in your state, get the Articles of Organization for an LLC, or the Articles of Incorporation depending on the structure of your business and pay the fees and file the forms.

As a reference point only, this PDF shows what documents are required to open a business bank account for all business structures in the state of Montana, but you should contact your local bank for their specific requirements.

Step Three:

Once you have a business bank account, it makes good business sense to apply for a business credit card, especially since these types of credit cards can convert to cash. The application and award process isn’t as stringent as dealing with a traditional lender. Business credit cards operate the same as personal cards and can be used to purchase everything you need for your business to succeed.

However, you must be responsible for your usage because delinquencies will be reported on your personal credit file and credit limit increases depend on your payment history. Use business credit often, pay the bill on time and do not ever max the card out.

Credit bureaus and lenders evaluate creditworthiness differently. Your business credit profile is similar to having a resume for your business. Most companies that look at your business credit file expect a complete and unbiased view of who you are and if there poses any risk working with you, so keeping your personal credit and business credit intact is just as important to build credit for your business.

The Entrepreneur Mindset: Do You Have One? Top 5 Characteristics To Acquire

The entrepreneur mindset, do you have one? People are rarely born as an entrepreneur. Research studies to tend favor the idea that being an entrepreneur is based on how a person thinks about and how they approach things. In other words, there are characteristics that can be learned to develop an entrepreneur mindset.

  1. Optimism-

Entrepreneurs are optimistic. Having a positive outlook while dealing with problematic situations encourages and expands creative thinking to come up with favorable solutions. This can be self-taught by simply repeating a set of affirmations daily to program your mind into believing the stated outcome.

2.Risk-Taking-

Entrepreneurs are risk takers and are not afraid to make mistakes or face failure. They know that mistakes are a part of the learning experience. It’s an opportunity to get better and stronger at what they do, while failures can be the kick-start to a new and profitable venture. The key is to fail small, fast and cheap early on. Freud once said, “Anxiety is treating a stick as a dangerous snake, and fear is treating a dangerous snake as a dangerous snake.” Be able to differentiate fear from anxiety while making important decisions.

  1. Self-Starting-

Entrepreneurs are self-starters. They visualize their successes and that makes them work hard and put in the time and effort to get the job done. They are productive people and understand that sacrifices must be made to achieve their goals. They are driven by their desires. Take time to meditate on your future and see yourself achieving your dreams.

  1. Forward Thinking-

Entrepreneurs are forward thinkers. They have a solid vision of what they want to achieve. They focus their attention on the future and do not dwell on the past- -the should of, would of, could of scenarios. They are open minded and receptive to new ideas and challenge the conventional way of doing things. Start thinking outside the box.

  1. Self-Discipline-

Entrepreneurs are disciplined. Successful entrepreneurs know how vitally important it is to have rituals, regimens, and commitments in their business as well as their personal life. Having and commanding respect from others is a by-product of being disciplined, and it comes by being aware, decisive and taking action on a consistent basis. Be sure to always follow through on everything you commit too.

Being an entrepreneur takes more than starting a business. It takes hard work, funding, innovation, a positive outlook, a strong inner drive, and being totally committed, all of which can be acquired by purposefully implementing them in your daily life and business interactions.

 

Partnership In Business

 

Defining a Partnership:

You may like the simplicity of a sole proprietorship as discussed last week, but what if you want to own a business with someone. Is there is another option? Yes, you can structure your business as a partnership. A partnership is when two or more people share in the ownership of a single business.

This basically consists of each partner sharing in the responsibility of funding the business, getting equipment and any inventory, providing or obtaining skilled workers and all aspects of management. Partners also share in the profits and/ or losses of the business just like a sole proprietor does.

Partnerships tend to work best if an agreement is drawn up, preferably by a lawyer, which details and delegates every aspect of the business’ operation.

Partnership Arrangements:

The three common partnerships are: General, Limited, and Joint Ventures Partnerships. Within the scope of a General Partnership, normally all partners share equally in the profits and liabilities while exercising equal management responsibilities. If you choose not to use equal distribution in any area, whatever percentages decided upon needs to be included in the agreement.

The Limited Partnership is a little more involved than the General Partnership, because it limits partners’ participation in management decisions. It can be viewed as a blessing in disguise since it also limits the liabilities of the partners. The limits are factored by the percentage of investment from each partner.

The last type of partnership is the Joint Ventures. This type of partnership is usually temporary and is established based on need. Two or more businesses join their resources and expertise on a short-term project or goal. For example, a small company has a great new product and teams up with an established marketing firm to land contracts with companies on the marketing firm’s distribution list. Once the goal is reached the partnership is dissolved. Both businesses profit financially.

Forming a Partnership:

As with any business structure, you will need to establish a business name. Partnership agreements require your legal name or the last names of all partners involved. If you decide against using all partners’ legal names, the trade name must be filed and the business must be registered in the state the business will be conducted in. There isn’t any paperwork needed to form a partnership.

Licenses and permits may be required for your line of work. Partnerships require a tax ID number. The business is not taxed, but the profits and losses of the business are the responsibility of the partners and filed on their personal tax returns.

Pros and Cons of Partnership:

Forming partnerships are not only inexpensive they are easy. Everyone involved is responsible for the success and liabilities of the business. The chance of obtaining business funding is doubled by the amount of partners.

Drawbacks include disagreements on how the business is run, and how responsibilities and profits are divided up based upon the percentage of investment.

Forming a partnership takes careful consideration and should not be something rushed into. Do not hesitate to seek legal counsel for more specifics regarding General, Limited and Joint Ventures Partnerships.