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