Everyday is Saturday

I begin this post with a little bsuiness 101. If some of this seems redundant, my apologies but I have readers from all over the business spectrum and do not want to assume everyone knows what I am talking about.

When buying a business - include real estate in this thought as well, especially if you’re going for apartments, cash flow etc - the number one concern you have is where to get the money. A close second is when do I turn a profit? But without money, the second concern is a moot point.

So you have your business identified with your business plan put together, next you need the funding. You can go to a bank or mortgage broker, but as we discussed yesterday, that is becoming more and more difficult due to the sub-prime lending market going south. Sub prime simply means, loans that were granted to “not prime” candidates. Whether their credit was below a prime candidate or their income was not enough, debt-to-equity ratios were off- something was not up to speed. They were given loans at great rates the first year and then those same loans ballooned to as high as 11%, leaving the banks and client toast. They were rated high, packaged and sold to Wall St. Investment bankers then put them into their clients portfolios and now you have Trillions of dollars of junk in the portfolios of investors. I spoke wtih a real estate agent in Naples, FL yesterday who receives 200 new foreclosures every month, and that’s just his portion!

Back to your business. You have your business mapped out and now all you need is the funding. I am going to use real estate for my example because it is what I know best. Insert your own plan where applicable. You find a piece of property for sale at $100K. You know based on your due diligence that the proerty is worth $200K. It is a motivated seller and the they need to get out fast. I come across these deals everyday and the difference between me getting the deal versus most investors is that I have the cash to pay right now. No banks, no appraisals, no long delays. Here’s your money and we both win. If you had the money for this same deal, you would have $100K of instant equity. There are too many ways to list how you can make money with your new property. You can flip it for $150K and still give $50K equity to a new buyer. You can rent it and have instant cash flow, you can lease-option the property and on and on.

But you need the cash to make any of this happen. Here is the solution.

Purchase an aged corporation with existing lines of credit. An aged corporation, also known as a shelf corporation, is simply a corporation that has been around for 2+ years “on the shelf.” It has all the paperwork registered with the appropriate state and is ready to go. When banks and others lenders look at business credit they look at how long the business has been established as well as existing trade lines. The older the business the better, the more trade lines the better.

When you purchase and aged corp you also receive the corp with all the original paperwork, established trade lines a Paydex score of 80 (which is the equivalent of outstanding personal credit) and funding to go with it. What is funding you ask? Funding is simply access to buinsess credit from banks that will allow you to pull the trigger on your business. The funding can be as low as $100K or as high as $25M, it is up to you. You pay 10% of the funding given to you as a fee, which comes off the back end. The shelf corp itself costs $25K but that can be reduced down to $3K based on your needs. There are other charges that apply, but it varies with each individual.

Using our example above, you need $100K right now. You secure $200K of funding through your shelf corp. The $200K cost you $20K (10% funding fee), you have $180K to work with. The $20K is chraged interest at approx. 7-10% until paid back. You use the $180K to buy the property at $100K. You flip the property for $140K, a $40K profit to you. You then pay the funding fee and have an approximate net profit of $20K. Best of all you have your own corporation with exemplary credit doing all the deals. None of the exisitng or future inquires or credit lines appear on your personal credit report, it all is contained within your business.

I’m going to stop right now and let you re-read this post. As I mentioend in my previous posts, this is only for the astute investor, not for someone looking to buy a new car. You need to have a plan for your shelf corp and the funding or you will be like the buyers I mentioned earlier in this post.

This is an unbelievable tool to earn your financial freedom but only if you use it wisely. I will be blogging more about aged corps this week to help everyone better understand the process, but I wanted to respond to all the emails I have received since I first mentioned this last week.

If you would like to inquire about purchasing a shelf corp, you can call our corporate office at 888-311- EDIS (3347) or send an email to my assistant Melissa at info@everydayissaturday.com. I will call you back personally for your interview. As I said yesterday, I will not approve any shelf corps or funding unless I feel good about your plan to use the money wisely.

Until then -

You are a champion.

Sam

www.EverydayIsSaturday.com