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Updated about 7 years ago on . Most recent reply

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Lord Tachanka
  • Chicago, IL
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Real Estate Using a Business As Leverage?

Lord Tachanka
  • Chicago, IL
Posted

Current Situation:

I have a business that produces around $330,000 in dividends per year and is holding roughly $30,000 worth of hard assets.

We're looking to leverage our existing business to start hoarding real estate as a hedge because our current business is very sensitive to the macroeconomic climate.

The business in question is roughly 2 years old. Has never defaulted on anything, perfect credit, no existing loans, etc...  

Both my business partner and I have perfect credit. I'm Canadian, but he's American and I trust him enough to make the company 51% American if need be to access greater financing sources.

Anyways:

Goals

1. Create a long-term cash flow machine. Not worried about short-term cash flow from these properties. Nor do we really intend on flipping as it's not worth our time. 

2. Protect ourselves and our company from paying excess tax by investing surplus cash into paying off mortgages early.

3. Have an ultra reliable income machine for when the economy ***** the bed.

4. In the long-term, create a base of assets we can get leverage against if our primary business needs loans. Loans against hard assets are cheaper than loans against business cash flow.

Questions:

1. Can we leverage our business to get into real estate to the point where little to no down payment is required? We're OK with doing a down payment but prefer not to tie up cash as our return on capital is higher with our main business.

2. Given we only care about long term cash flow, aren't really after short-term gains, want to minimize time spent on managing these properties, etc... what kind of properties would be most suitable/should we be doing research on?

3. Any recommended reading?

Thanks for your help!

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