All Forum Posts by: Chris Baber

@Chris Youssi  thanks for the input.  

Did US Bank tell you, or intimate that your current/new deal with them would have been easier, cheaper or faster if you'd had a 2-3 year relationship with them already, or are they doing the deal without a relationship about the same as if you'd had one?

In other words, do you think having a banking relationship with them would make your current situation better?

If I have to go to them in 2-3 years, or more, due to the size of a deal, that's fine, but if I can avoid having to deal with them in the meantime, I'll probably be happy to pay a bit more then to not deal with them until then, if that makes sense.

Thanks for sharing your feedback either way.

@Eric Gunderson Thanks, but I LOVE credit unions.  The only "banks" I work with are ones which I have a credit card with.  I don't have personal checking or savings with any banks.

I opened my current business checking with my local Credit Union, but as I stated in the OP, I don't think they will have a full range of lending options when I get to that point.  (They recently shut down their commercial lending dept).

I'm willing to do business with a small local bank, with my business, but the preference is still a Credit Union.  I only wish my CU from Texas could lend in North Carolina.

I'm now leaning towards Champion, a small Credit Union in town that was founded in the 30's and has a good range of business lending options, and low fees.

I've still got calls out to a few others.

@Ryan Howell Thanks for the input.  Both TD and HomeTrust qualify as "Big banks" to me, which rules them out.  They will probably offer "more" lending options, but will be very specific in their 'box' they underwrite with, and will probably charge higher fees, and generally don't care about small businesses.  I do hope they work well for you, I just won't do business with a huge bank.

@Dennis M. Thanks for that, I completely agree about big banks.  I was more asking about what kinds of things to ask them to help qualify they as a future lender/good partner, vs. should I go big or small bank.

@Chris Harjes Thanks, that's very useful and specific information.  I love the personal experience.  I'll reach out to them today, along with Champions and Telco.  First Bank sounded good, but I see they are owned by First BankCorp, with is a large regional bank, so they are probably out.  Several other smaller banks seem to have been bought out during the crisis, so I'm struggling to find any others to even reach out to.

@Caleb HeimsothThanks for the advice but that is exactly the thing I'm trying to avoid, working hard.  I posted here to try to work smart, and cut that list down to a few good options.  I don't have a good list of questions to even ask 30 banks, to know exactly what I'm looking for, 2-3 years down the road.

The search continues :)

I've recently formalized my business by creating a corporation.  I opened a business checking account with my local credit union, but I don't think they're going to offer as many solutions to real estate and business lending in general as some of the other banks in the region can.

So, I want to establish a relationship with another local bank now, to build on that for a while to help when I'm ready for more lending.  I will not do business with a Wells Fargo, BofA, or similar.

Does anyone have any good advice for finding a good bank(er) in a local market?  Good questions to ask, or things that should eliminate them from further consideration?

I'm in Asheville, NC, but I don't expect recommendations so specific (althought they are welcome), I'm just looking for advice on narrowing down/choosing a partner.

thanks.

I've used William Reed's office twice now, and just contacted Jonathan on Friday for a new deal.  He said they could probably close next week, but then remembered the holiday, and said it's be early the week after.  So far, they have been trouble free, and easy to work with.  I'll report back once I close this one.

I'm also recently in the market for a business bank in/around Asheville.  I'm currently working with Telco, but I don't get the impression they will be able to offer the full range of financing other bigger, but small regional banks probably can.

Does anyone have experience with beginning and expanding a growing business relationship with a local bank or credit union?  Not just for mortgage lending, but business banking as a whole?

Has anyone investigated, or knows if/when the Personal Guarantees can be removed.  They are business cards, in the name of the business, for the business, just secured by your word.  I've heard that in 1-2 years the PG can be removed, but I've also heard it cannot be done.  I'm curious if anyne has any experience, or if Fund & Grow has addressed this with any of you.

I'm looking at starting with them next week.  Do they offer referral codes (kickbacks to you) if you refer me?

I haven't seen anyone mention this, so I thought I'd throw it out there for other opinions.

I recently turned my residence into a Short Term Rental (Airbnb) because I thought I could do better than Long Term Rents.  I was hoping to get about double the monthly income, but of course, would have higher expenses due to cleanings and paying my own utilities, etc.

I'm actually seeing about 3X LT Rates so far, and I'm still ramping up, fine tuning my listing, systems, etc.  I think I may see 4X in peak season (Leaf Season where I live in the Blue Ridge Mountains).

After expenses, I think I'm still seeing 2X in my pocket over LTR, and I have had ZERO 'tenant' issues so far.

I've bought another just up the road, and am in the middle of rehabbing that one, and am trying to get it finished in time for Leaf Season also.

My personal plan at this point is to try to find more SFRs that look like they can/will cash flow anything positive in a LTR situation, as a fallback position.  But I plan to make them STRs for the extra income while that market is still offering such high returns.

I also think I may have the potential to sell it based on rental numbers, like a MFH. If this actually works, the value should be at least double the SFR value as a house.

Rounded specifics:

Mortgage was 125,000

PITI is 700/mo

LT Rents would be 1200-1300/mo

Last month I booked 4000 with Airbnb

Appraised value is 200k as SFR/Home

I haven't looked at appraisal value for a rental property vs Owner Occupied/Home in a LONG time, but I suspect with an average of 3000/mo in consistent rent, I would think the value of that as a business/investment should be over 400k (would love feedback on this point)

Just some thoughts I had.

I've been studying this subject a lot lately.  here's what I've learned and done so far.

I created my Corporation on 6/1/18 (3 weeks ago).  

I got my free EIN from the IRS on the same day.

I got my Free DUNS number from Dunn & Bradstreet (I paid $45 to expedite that number, as I'm trying to move fast on all this; it's not required.  do NOT buy the D&B program they will try to sell you to set up your credit or whatever BS they tell you.  it's a waste of money.)

I rented a virtual office to have a legal business address, which many companies want to see.  A PO Box is an instant denial in almost all cases.  A Mailboxes etc type address that looks like a real address is just as bad.  You MUST use a real address for your business.  Home address is better than other options, but a virtual address is the best option if you don't really have your own commercial business address.

IMPORTANT!!!

Make sure your address, phone numbers, etc all match across all business documentation.  If your address shows as 123 Main St Ste 100 with the IRS on your EIN, make all your other documents use the same address.  Don't use 123 Main Street, Suite 100  -  all spelled out.  Much of business credit (and personal too) is processed by computers and if they don't see your address matches, you will likely be denied.

Get your business number listed on 411 business.  Do NOT use a home phone number for your business.  (Opus gives me a number, a fax number and gets me listed with 411 all included in my $99/month rent)

Once you have everything setup (took me less than a week to get to this point).

Apply for the following accounts

I started with ULINE and ordered some storage containers

I went to Quill and got some coffee creamers for my Airbnb listing, and some markers.

I went to Pilot to get a gas card, then later found out they no longer report.  They may/likely will start reporting again, so I'll still use this card from time to time.

I went to Grainger and bought some tools.

I went to Barnett (a Home Depot owned company which will let you use your Barnett card at Home Depot!) and bought some PEX pipe I needed.

I went to People Ready and hired a guy to help me with some land clearing I needed done.

I went to Gemplers and bought some tools I needed.

I probably would not have bought any of these things from these companies normally, but by doing it, I now have 6 accounts which all will report to business bureaus, within 30 to 90 days.  There are some 'tricks' to ensure they report, but in general, wait for a month to change before paying any invoices to make sure they report your credit to bureaus. (Gemplers for example, will report on the 1st of the month whatever balance you have on the last day the month, so you must have a balance roll from month to month.)

I show above some of the basics required to get the card, and who they will report to.

Once you have 5 "payment experiences" on at least 4 vendors, you can move to companies in orange.

Minimum accounts to proceed is first column on left.  Don't jump ahead, you have to wait to hit this accounts and score minimums before moving forward.  If you try to skip ahead, you will probably be denied, so just be patient (the hardest thing for me to do).

Your D&B score (called PAYDEX) is calculated almost entirely on your pay history.  Pay on time, you get an 80 (out of 100), pay early and it goes up, pay late and it goes down.  So, it's VERY IMPORTANT to pay these bills a bit early, to ensure a high score.

I hope this gives everyone a decent guide on how to start this process.

The chart above outlines my plan to get which cards as I'm able, and the requirements to do so.

I use NAV.com to monitor my business credit for free, and also D&B offers free credit monitoring, which I also use.

My plan is to have the ability to get business credit cards in my EIN ONLY within the next 4-6 months.  

My goal is to acquire at least $100,000 in available business credit not tied to my social within the first year.

Feel free to hit me up for more info, if you find this interesting.

@Joel Owens I am/was concerned about imminent domain also.

I agree tenant pool would be very limited, which is why I brought up a 'storage or holding' type business.

I'm NOT focusing on price in lieu of usability, I'm interested because of seller financing, but if I couldn't rent for at least 1000/month, it probably wouldn't be worth it.  that's why I asked for other ideas to generate rents.

Thanks