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Building Business Credit: $0 to $2.5 Million In 9 Months - YouTube
Channel: The Kwak Brothers
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hey what's going on guys this is Daniel
one half of the Kwak brothers and today
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we've got a very very special treat I've
got one of my best friends here Melvin
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Johnson we're gonna be talking about how
he went from $0 to $2,500,000
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million dollars in
business credit in just nine
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months that means that if he got his
wife pregnant today and it started fresh
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by the end of the time the baby is born
he'll have two and a half million
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dollars in line of credit what would you
rather have him and a baby or the line
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of credit oh for sure my baby maybe yeah
really I get the line of credit oh yeah
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you don't have a baby no not yet let's
go ahead and now that's my baby exactly
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let's go ahead and cue that intro let's
get right into the meat I have my very
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good friend here one of my best friends
actually mr. Melvin Johnson founder and
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CEO president janitor bookkeeper you
become HR manager coming right the the
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Joker all of the above right a Maaj
capital and he's got a phenomenal
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phenomenal story but he went from $0
to $2,500,000 in
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nine months with business credit
right now business credit it's a little
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different than personal credit is so
mellow before we even talk about that
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tell us a little about you cuz this is
the first time that our clock brothers
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viewers are getting to know who you are
okay well as you mentioned my name is
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Melvin Johnson I am a new real estate
investor if you will right but I came to
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real estate video Daniel right he was I
was flipping to Facebook one day he was
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like I'm doing real estate I was
interested in the rest is history so
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we've been able to acquire thus far
within the last month or so six doors
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and Counting and you didn't have to
raise two too much money to get those
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six doors not a whole lot actually
compared to a lot of people so let's go
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ahead and start with the basics a lot of
people no personal credit yeah right
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what's the biggest difference between
personal credit and business credit well
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personal credit is you know it's tied to
your social security and a lot of times
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it's it grows a little slower right it's
nothing wrong with it but it just grows
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different and it's not meant to bear the
weight of a business it always said it's
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like putting a rock on a dried-out
spaghetti noodle it's going to break it
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you know business credit on the other
hand it grows faster it doesn't your
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utilization really doesn't impact your
score and the only thing that's really
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important there as a pay ministery
businesses are meant to utilize a lot of
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credit so actual issuers of credit and
love to see you using your credit you
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know unlike on the personal side you
know when you use your penalized for
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using a lot of credit you know so if you
spike over 40% you know you're in that
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red area no matter what anyone tells you
you know that's that's high know so I I
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like business credit you know I love
business credit I love the introductory
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rates I love you know being able to
internal bank it you know we'll talk
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about that you know yeah shortly but
yeah right and and you know business
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credit is something that no one talks
about no one knows the real power of
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business credit I would say it's right
up there with learning how to raise
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capital so now you went from zero to two
and a half million in nine months what
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were some of the beginning stages like
what did you do right out of the gate
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when you first started that process I
networked a lot and I develop a
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relationship with 88 lending
institutions that have various programs
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for people who are trying to look to
obtain business credit so a lot of that
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is personally guaranteed for startups
but you can get up to five times the
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amount that you have on the personal and
that was huge for a lot of people yeah
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so you find the person and you know in
order for you to do that you go to a
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bank you know who do you talk to
everyday people you know people that I'm
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saying that Walmart people I'm going to
meet ups with you actually just turned
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me on recently to meet up so I'm
networking with those people I'm
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networking with people at church of
networking with people who had you know
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the laundromat just regular everyday
people you know individuals who are
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maybe not looking to get out of their
jobs necessarily but looking to create a
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pastor scream of income so that they
could have a peace of mind knowing that
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in the event that something happened to
the job they'd be okay you know so these
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were regular people you know and
obviously you could use this two and a
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half million dollar credit to invest in
real estate to invest in the company and
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a lot of times you have as much
flexibility as regular
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I do actually I really do yeah I'd say
more it one of the things that turned me
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on to it was that I had a partner a guy
who was wanting to Lin $150,000 and he
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wanted to lend it at 10% well that was
not a problem for me on this deal but
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then I thought okay I could use 150 and
do more with it if I was able to use his
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credit and now you and your friend went
to the bank with $50,000 and you got a
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secure line of credit for $500,000 but
really my hairs that correctly well not
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only five hundred thousand dollars but
five hundred thousand dollars and less
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of a percentage that I was going to give
him which was eight point seven four
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percent so we got eight point seven four
percent it's a year term and also the
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five hundred the fifty thousand dollars
that we use to secure the five hundred
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thousand dollars is actually not money
that we used right we just needed this
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show so we were able to show an eventual
we'll use it because we have to use ten
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percent of our own capital to fund our
deals which is fine you know but yeah so
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it's actually it was actually a rather
simple process you know can you do this
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with a million dollars could you this
with five hundred thousand dollars more
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than just fifty you know yeah oh
absolutely yeah fifty is the base right
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50 is the base in the minimum of six
ninety credit score but you know we
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could mean you could do this with a
million dollars two million dollars yeah
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absolutely so let's talk about
specifically how did you get to that 2.5
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million dollar number yeah so two point
five million dollars come by way of
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three partners of my partners very high
net worth individuals so with one
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partner with two separate parties I have
a million dollar line of credit
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established to the LLC that that I own
60% of they own 40% of they were able to
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retain their capital which is always
good and then also one with a five
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hundred thousand dollar line of credit
now the beauty of it is that we take it
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a step further because I'm all like I
said an infinite amount of return and
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what we did was we established credit
cards under our actual LLC for fund up
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and we were able to secure up to 100
grand per one of those LLC's that we
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have yeah so with that we initiated a
lot of these rehabs on the project and
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then we also use what's being reimbursed
to us from our line of credit to pay off
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our credit cards so we actually shift a
lot of the funds back and forth and
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after we
initiate 10% we spend no more of our
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money on these deals so let's go ahead
and review and recap for a lot of our
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viewers here so step one you find the
person finding the price the high
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net-worth good credit and maybe
something like forty fifty thousand
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dollars in savings yeah
right you go to the bank you get a
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secure line of credit using that fifty
thousand dollars
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oh you set up the entity right so
instead of the LLC which is a limited
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liable company and you go to the bank
with that LLC yep you put the business
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line of credit you still use the fifty
grand
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get it fuck it get that use that cash to
get the $500,000 this credit put that
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line of credit with the LLC yeah and you
do deals with that money you do deals
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with that money
Wow now there's a person have to keep
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the $50,000 in the bank or do they can
they retain it they retain their fifty
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thousand so the fifty will be that's
indicative of the ten percent that
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you're used to fund your portion that
the bank wants you with some skin in the
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game of dollars
so yeah that's your fifty thousand
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dollars that you'll retain but yeah they
retain their fifty before the line is
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established show it's not like they
spend 250 thousand dollars to have the
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line established now you actually only
set up the line for $750 so one-time
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processing fee and you also have an
opportunity to every year have this line
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increase so our goal next year will be
to double this line via real estate for
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sure that's awesome that's amazing
definitely a new way and also a very
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good way of investing in real estate so
thanks guys for joining us if you want
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more information I'll click on the link
in the description below for a lot of
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you students of the clock brothers
education company Melvin is actually
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going to be one of our latest
instructors he's going to be teaching on
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business funding business credit so if
you're interested click on the link in
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the description below like and we will
see you soon yeah I like to subscribe
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thank you
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