Building Business Credit: $0 to $2.5 Million In 9 Months

Building Business Credit: $0 to $2.5 Million In 9 Months

hey what’s going on guys this is Daniel
one half of the Kwak brothers and today we’ve got a very very special treat I’ve
got one of my best friends here Melvin Johnson we’re gonna be talking about how
he went from $0 to $2,500,000 million dollars in
business credit in just nine months that means that if he got his
wife pregnant today and it started fresh by the end of the time the baby is born
he’ll have two and a half million dollars in line of credit what would you
rather have him and a baby or the line of credit oh for sure my baby maybe yeah
really I get the line of credit oh yeah you don’t have a baby no not yet let’s
go ahead and now that’s my baby exactly let’s go ahead and cue that intro let’s
get right into the meat I have my very good friend here one of my best friends
actually mr. Melvin Johnson founder and CEO president janitor bookkeeper you
become HR manager coming right the the Joker all of the above right a Maaj
capital and he’s got a phenomenal phenomenal story but he went from $0
to $2,500,000 in nine months with business credit
right now business credit it’s a little different than personal credit is so
mellow before we even talk about that tell us a little about you cuz this is
the first time that our clock brothers viewers are getting to know who you are
okay well as you mentioned my name is Melvin Johnson I am a new real estate
investor if you will right but I came to real estate video Daniel right he was I
was flipping to Facebook one day he was like I’m doing real estate I was
interested in the rest is history so we’ve been able to acquire thus far
within the last month or so six doors and Counting and you didn’t have to
raise two too much money to get those six doors not a whole lot actually
compared to a lot of people so let’s go ahead and start with the basics a lot of
people no personal credit yeah right what’s the biggest difference between
personal credit and business credit well personal credit is you know it’s tied to
your social security and a lot of times it’s it grows a little slower right it’s
nothing wrong with it but it just grows different and it’s not meant to bear the
weight of a business it always said it’s like putting a rock on a dried-out
spaghetti noodle it’s going to break it you know business credit on the other
hand it grows faster it doesn’t your utilization really doesn’t impact your
score and the only thing that’s really important there as a pay ministery
businesses are meant to utilize a lot of credit so actual issuers of credit and
love to see you using your credit you know unlike on the personal side you
know when you use your penalized for using a lot of credit you know so if you
spike over 40% you know you’re in that red area no matter what anyone tells you
you know that’s that’s high know so I I like business credit you know I love
business credit I love the introductory rates I love you know being able to
internal bank it you know we’ll talk about that you know yeah shortly but
yeah right and and you know business credit is something that no one talks
about no one knows the real power of business credit I would say it’s right
up there with learning how to raise capital so now you went from zero to two
and a half million in nine months what were some of the beginning stages like
what did you do right out of the gate when you first started that process I
networked a lot and I develop a relationship with 88 lending
institutions that have various programs for people who are trying to look to
obtain business credit so a lot of that is personally guaranteed for startups
but you can get up to five times the amount that you have on the personal and
that was huge for a lot of people yeah so you find the person and you know in
order for you to do that you go to a bank you know who do you talk to
everyday people you know people that I’m saying that Walmart people I’m going to
meet ups with you actually just turned me on recently to meet up so I’m
networking with those people I’m networking with people at church of
networking with people who had you know the laundromat just regular everyday
people you know individuals who are maybe not looking to get out of their
jobs necessarily but looking to create a pastor scream of income so that they
could have a peace of mind knowing that in the event that something happened to
the job they’d be okay you know so these were regular people you know and
obviously you could use this two and a half million dollar credit to invest in
real estate to invest in the company and a lot of times you have as much
flexibility as regular I do actually I really do yeah I’d say
more it one of the things that turned me on to it was that I had a partner a guy
who was wanting to Lin $150,000 and he wanted to lend it at 10% well that was
not a problem for me on this deal but then I thought okay I could use 150 and
do more with it if I was able to use his credit and now you and your friend went
to the bank with $50,000 and you got a secure line of credit for $500,000 but
really my hairs that correctly well not only five hundred thousand dollars but
five hundred thousand dollars and less of a percentage that I was going to give
him which was eight point seven four percent so we got eight point seven four
percent it’s a year term and also the five hundred the fifty thousand dollars
that we use to secure the five hundred thousand dollars is actually not money
that we used right we just needed this show so we were able to show an eventual
we’ll use it because we have to use ten percent of our own capital to fund our
deals which is fine you know but yeah so it’s actually it was actually a rather
simple process you know can you do this with a million dollars could you this
with five hundred thousand dollars more than just fifty you know yeah oh
absolutely yeah fifty is the base right 50 is the base in the minimum of six
ninety credit score but you know we could mean you could do this with a
million dollars two million dollars yeah absolutely so let’s talk about
specifically how did you get to that 2.5 million dollar number yeah so two point
five million dollars come by way of three partners of my partners very high
net worth individuals so with one partner with two separate parties I have
a million dollar line of credit established to the LLC that that I own
60% of they own 40% of they were able to retain their capital which is always
good and then also one with a five hundred thousand dollar line of credit
now the beauty of it is that we take it a step further because I’m all like I
said an infinite amount of return and what we did was we established credit
cards under our actual LLC for fund up and we were able to secure up to 100
grand per one of those LLC’s that we have yeah so with that we initiated a
lot of these rehabs on the project and then we also use what’s being reimbursed
to us from our line of credit to pay off our credit cards so we actually shift a
lot of the funds back and forth and after we
initiate 10% we spend no more of our money on these deals so let’s go ahead
and review and recap for a lot of our viewers here so step one you find the
person finding the price the high net-worth good credit and maybe
something like forty fifty thousand dollars in savings yeah
right you go to the bank you get a secure line of credit using that fifty
thousand dollars oh you set up the entity right so
instead of the LLC which is a limited liable company and you go to the bank
with that LLC yep you put the business line of credit you still use the fifty
grand get it fuck it get that use that cash to
get the $500,000 this credit put that line of credit with the LLC yeah and you
do deals with that money you do deals with that money
Wow now there’s a person have to keep the $50,000 in the bank or do they can
they retain it they retain their fifty thousand so the fifty will be that’s
indicative of the ten percent that you’re used to fund your portion that
the bank wants you with some skin in the game of dollars
so yeah that’s your fifty thousand dollars that you’ll retain but yeah they
retain their fifty before the line is established show it’s not like they
spend 250 thousand dollars to have the line established now you actually only
set up the line for $750 so one-time processing fee and you also have an
opportunity to every year have this line increase so our goal next year will be
to double this line via real estate for sure that’s awesome that’s amazing
definitely a new way and also a very good way of investing in real estate so
thanks guys for joining us if you want more information I’ll click on the link
in the description below for a lot of you students of the clock brothers
education company Melvin is actually going to be one of our latest
instructors he’s going to be teaching on business funding business credit so if
you’re interested click on the link in the description below like and we will
see you soon yeah I like to subscribe thank you

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About the Author: Oren Garnes


  1. Just needing some clarification. Is there a particular bank type(community, credit unions, traditional, etc) I need to approach with this strategy? So this is my understanding; I go into my local bank, request to open a secured BLOC with at least 50k? And bank will match up to 5 times of the deposited amount?

  2. Wow… best video yet. Loved it. My business partner just signed up w another company… I am always looking for the best deals… would love to start to speak w you guys. I am los angels CA.

  3. What are some of the lenders or companies Melvin uses to obtain the line of credit? Is he using big banks or credit unions?

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