How Real Estate Investors Use Business Credit to Fund More Deals

Bobby Moody (00:00)
I tell you man, business credit is like having a second job on steroids. You know what I mean? You don’t have to worry about going out and looking for another job. All you have to do is leverage your personal credit. You leverage your personal credit, you have an LLC, and then from there, you just go ahead and make sure you have the right data points and apply for business funding. It’s all in your business name. You don’t have to worry about utilization. You don’t have to worry about maxing out a credit card.

And it’s a great strategy because you can even liquidate those credit cards and use them as down payments for real estate investing.

Dylan Silver (02:07)
Hey folks, welcome back to the show. Today we’re joined by Bobby Moody, a New Jersey based real estate investor operating through Moody’s movement. Bobby has spent years building his business through off market deal sourcing, relationship driven acquisitions and hands on investing strategies. Bobby, thanks for taking the time today.

Bobby Moody (02:27)
Hey, thank you, thank you. How’s everybody doing? As again, my name is Bobby Moody, owner of Moody’s Movement. I’m also a licensed active roliater with NJ Elite in Asbury Park, New Jersey.

Dylan Silver (02:39)
Bobby, you’ve been active in several different transaction types and deal structures. What strategy has been the biggest long-term opportunity for you personally?

Bobby Moody (02:52)
Well, thank you for the question. My biggest long-term strategy has been the buy and hold strategy. Starting off with duplexes. You know, that’s my niche. They call me multi-family moody. I just always looked at having two or three or four is better than one. And so that was the driving force for me. And that was actually how was able to walk away from my full-time job by acquiring buy and holds through multi-families.

Dylan Silver (03:21)
Now, the buy and hold strategy is time tested, but there’s also a lot of interest over the years of more short term gains like fix and flip wholesale is a big way that people will get their cash up, but also continue to stack cash. And then you also have people that are looking at, you know, ⁓ short term rentals. And I might also distinguish that from when I think of buy and hold, I think a lot of times of

Bobby Moody (03:35)
Yes.

Dylan Silver (03:50)
you know, year to year leases, but of course that could also be stacked in with STRs. What has made you decide I’m gonna stick with buy and hold versus some of these other, you know, potentially shiny strategies?

Bobby Moody (04:03)
Right, because I never was always focused on the shiny object. I always was focused on long-term wealth, long-term generation. So what I also understood was, yeah, you can buy and fix and flip, and then soon as you get done with that property, you pay the taxes, or if you defer, you’re right back to square one. With wholesaling, yes, you can make a lot of money. You can have an acquisition deal. I’ve had some up to $100,000. But then again, right after that, you’re back looking for a deal.

So again, when you’re out in those long times looking for new deals, waiting to close on another property, you have nothing coming in. So I always set my long-term goals out first and then I just focused on the short-term goals after those was truly established.

Dylan Silver (04:47)
Now in the multifamily space, ⁓ we had been talking in the green room a little bit about this, the duplexes, right? So purchasing duplexes is an interesting strategy because it fits into the segment of multifamily, but it’s also one to four units, right? So there’s some similarity between the single family homes. How did you decide to carve out that niche for yourself?

Bobby Moody (05:07)
That’s correct.

again, once I became a real estate agent, what I realized was that you don’t sell a house every day. And so I said, well, if I can buy a quad, a tri or a duplex, I can live in one side, rent out the other side and help generate cashflow to help offset some of the mortgage. So I just used that strategy, you know, bought 10 different duplexes and tri, mixed up duplexes, triplexes and quads over the years.

And that was just my strategy.

Dylan Silver (06:32)
Now for acquiring these small multifamily properties, have you found that lenders are able to utilize the potential cashflow from the other units or is that not always the case? I hear that quite a bit.

Bobby Moody (06:47)
No, no, it’s always the case. You know, you can get it with the FHA, you can get it and you can do them with conventional and you can do DSCR. So again, we all know that with standard FHA, you can only buy about 10 properties, you know, under that type of umbrella. But then when you go to a DSCR, that’s actually the main way that you get the properties is because what they’re looking at is what the asset is going to generate to service the debt. And so since I was out of the

⁓ FHA status, that’s now the DSER products is all I use.

Dylan Silver (07:22)
Now, from scaling your business, I’m imagining that part of this was a balancing act between personal production and then building a team and then managing your portfolio. What was maybe the biggest aha moment that you had in scaling your business?

Bobby Moody (07:42)
One of the biggest ones was just being able to depend on other people. Whether it’s contractors to come in and fix things, whether it’s just lenders. A lot of people that work from home are not as driven. They look to say, I’ll do it later. You know what I mean? And in real estate, time is of the essence. So for somebody like myself, Moody’s Movement is a company that stays on the move.

So again, if I bring you in as a part of the team, I need you to move with the same type of passion, the same type of intensity as me. So kind of dealing with other people has been one of the biggest challenges. And so nowadays, you you have to find those good people and keep them tight knit.

Dylan Silver (08:26)
Now, being active in both brokerage and investing and then working a lot with people in the off market space does have its challenges. As an agent myself, I’ve faced this where, you know, some brokerages want to be very hands off with this. How have you been able to navigate that complexity?

Bobby Moody (08:44)
The great part about it is, is, you know, for a couple of years I did jump from brokerage to brokerage. And what I realized is, you know, as you said, a lot of the standard brokerages, they do want to be hands off. The great part about this is because my brokerage and J Lead, I love them because they actually encourage off-market investing. They encourage off-market investing. They encourage, you know, us as agents to be investors.

And so it was just the perfect match once I teamed up with them because now, you know, on a standard brokerage, they don’t want to deal with a double closing. But then when you come to my brokerage, we can do double closings. And that has been a real blessing for me because now they have the solutions to the problems.

Dylan Silver (09:22)
Right, no.

want to pivot here, Bobby, and talk about ⁓ branding and specifically when it comes to looking for investment opportunities. Have you been one that’s been heavy on building that sphere and your brand? How have you been able to market yourself?

Bobby Moody (10:21)
I’ve just been able to market myself by traveling a lot. That’s one big thing. Between just my personal attire, whether it’s my clothes, whether it’s my jewelry, whether it’s my coat. My business coach always told me, you should make sure that you have a conversation piece. So if someone walks up to me, I’m in the airport. Hey, what’s the stand for? Well, in reality, the stands for my last name.

You know, but then again, if I have on a different chain and has my whole business card on it. And so then they’re like, well that’s unique. And I’m like, yeah, you know, it’s my business card. I’m a multifamily real estate ⁓ investor. I’m also an agent. That’s a conversation piece. And then it’s almost like a upsell. You know, I can help you get your credit fixed if you need that. You know, I’m also helping people get business funding and personal funding. So then, you know, that’s just how you can, that’s myself, how I continuously marketing brand myself.

Dylan Silver (11:18)
Let’s dive in there. That’s something that we didn’t discuss previously. There’s a lot of people who are looking for ⁓ business funding. In that space specifically, there’s ⁓ beginning to be more information out there, but there’s still a lot of people who would like to gain access to business funding that have no way to go about it or don’t know where to turn.

Bobby Moody (11:38)
I tell you man, business credit is like having a second job on steroids. You know what I mean? You don’t have to worry about going out and looking for another job. All you have to do is leverage your personal credit. You leverage your personal credit, you have an LLC, and then from there, you just go ahead and make sure you have the right data points and apply for business funding. It’s all in your business name. You don’t have to worry about utilization. You don’t have to worry about maxing out a credit card.

And it’s a great strategy because you can even liquidate those credit cards and use them as down payments for real estate investing.

Dylan Silver (12:12)
Now I’ve heard of the credit stacking strategy. What’s your perspective on that?

Bobby Moody (12:18)
My perspective on it is, and a lot of people won’t be honest and say this, it is a great thing, but you have to know what you’re going to do with the money. There’s no reason for someone to go out and get $200,000 worth of credit and you don’t have anything to do with it. Because again, it’s borrowed money. And yeah, it’s great when it has the 0 % interest, but once that 0 % interest is over, that’s where the game starts. So if you don’t have anything that you’re servicing that money with,

you’re going to run into some problems and that’s what a lot of people are doing. And then a lot of times people are getting business credit and they’re even paying people to do it for them at 10%. So now if I help someone get 20,000, you know, $200,000 and I’m paying some and you know, they’re getting, they’re paying $20,000. Guess what? That’s $20,000 you don’t have. You have to now figure out how to make that money and then on top of finishing paying off the rest of it. So again,

Dylan Silver (13:08)
That’s a great point.

Bobby Moody (13:15)
I encourage people, you know, I always encourage people to really understand your numbers, really understand what you’re going to do with it. And yes, there is a fee for getting it if people don’t know how to do it. But I’m not one of those people who are going to tell you, yeah, let’s just get as much as you can get. No, I’m going to have a thorough consultation with you and say, OK, what is your goal? How do you plan on doing this? What do you plan on doing with the money? OK, so after we come up with all of that, I’ll say.

Well, I believe you should probably start off with around $100,000 because guess what? You always can go back and get more. But when you get so much so soon, you’re burning down bridges with the banks.

Dylan Silver (13:56)
Now, when we talk specifically about the different ways that people can get business credit without giving away all the gold here, Bobby, but maybe a little nugget. If someone has an LLC, right, and they have, you know, a couple thousand dollars in their business bank account, is there a way for them to get started? What would be your generic feedback to folks who are looking to get the ball rolling?

Bobby Moody (14:14)
Mm-hmm.

⁓ Make sure you have a good internal relationship with the bank. ⁓ And hey, just start off with a credit card. That would be the best way. And then from there, you work that relationship and then you just go ahead and get a line of credit.

Dylan Silver (14:38)
Now for a line of credit specifically for folks who are unaware, what would be the benefits and detriments compared to a credit card?

Bobby Moody (14:46)
Okay, well the benefits first would be that you can use the money, pay the money back and have the money paid and you can use the money again compared to a credit card. You normally, because it’s unsecured, you have a higher debt. So where a line of credit, you may be at a 10 % on a credit card. You may have that 0 % for a period of time, but then that’s going to then jump to 25 to 20, know, anywhere from 19 to 25%. So again, you can pay the credit card back and then still have the money.

But after that 12 months, now you’re using that same money at 25%, which is pretty high.

Dylan Silver (16:03)
Yeah, now you’re looking at almost double the rate or in many cases double, right? ⁓ Pivoting here, if we’re looking at different ways where people can access credit, right? And you have business credit, you have personal credit, you have home equity lines of credit, and I believe also refinancing, if I’m not mistaken. There’s so many ways where people can go about this.

Bobby Moody (16:06)
Absolutely.

Right.

Dylan Silver (16:27)
If they do have those options, know, a home equity line, refinance, personal credit, business credit, and they’re trying to figure out where should they start. Do you have any feedback for them?

Bobby Moody (16:37)
Yeah, I would just say make sure that you’re speaking with the person who is really, really knowledgeable in these areas. Because again, the people that you depend on are gonna be the people that either help you scale or fail. So if you’re looking for a line of credit, know, weigh out the pros and cons. If you’re looking for, you know, a HELOC, look at the pros and cons. You know, understand if you’re an investor like myself, you know, there’s some, you know,

The more you get into this space, you find out even more stuff. So it’s like, this is just general surface things. And then before you know it, you can easily have 200, $300,000 of credit just around you before you even need it.

Dylan Silver (17:18)
⁓ We are coming up on time here, Bobby. I do want to ask you about how you’ve been navigating these ⁓ real estate markets over the last couple of years. Have you seen your strategy pivot or adjust at all as the markets have shifted?

Bobby Moody (17:34)
yeah, it’s definitely shifted. You know, the main ways that it’s been shifted is of course prices, inventory, ⁓ the materials are a lot higher. And so again, now it’s just a matter of double checking your numbers. The strategy is pretty much still the same. It’s just a matter of making sure that you double check your numbers and execute efficiently. You know, got it. The people that you’re contractors, you know, if you’re having them walk properties with you, make sure you’re walking it with the fine tooth.

Because at the end of the day, you can go into this, have a scope of work and run into an issue. And there’s the deal right there.

Dylan Silver (18:13)
We are coming up on time here, Bobby. Any new projects that you’re working on and then also anything you’d like to say directly to our audience.

Bobby Moody (18:21)
Yeah, so I’m working on a new build right now here in the Sicklerville area. That’s my first newest biggest project. And for anybody out there who was looking to have a consultation, want to learn more about anything on real estate or business, hey, please reach out to me, MoodysMovement.org. I’m here to help the people.