Tom Kish's Unsecured Business Credit System
A REVIEW of Tom's System
Thomas Kish devised a system of gaining unsecured business lines of credit in order to fund real estate investments. $300K in credit is an obtainable goal. He definitely hypes his system as the next "big thing" yet there is merit to what he has written and teaches. For one, accumulating lines of credit in a business name is somewhat safer than having those lines of credit in your personal name. When you create a business entity you are able to obtain credit with that entity. Tom's system is not a corporate credit program where you accumulate credit from places such as OfficeMax and the like. He shows you how to get unsecured credit - a big difference. An unsecured line of credit can be used for anything. Without an unsecured line of credit, Tom's system would not be applicable to Real Estate in particular.
If you are reading this and are familiar with Tom's system, you know how much hype he puts on "not using your personal credit" and what not. And he is only partly right.
What he doesn't tell you is that banks will look at your personal credit history whenever applying for a business line of credit. Well...not all banks and not all the time. Confusing? Yes, as all banks operate differently they may or may not look at your personal credit history. It really depends on the lender. So can you get these lines of credit with bad credit? Well, it depends on the bank.
What is really important is the list of lenders he has compiled that grant the lines of credit that will benefit the real estate investor and really any person looking for borrowed capital that they can liquidate. Without this list one would be lost in searching for them on their own. Many people buy Tom's system solely for this list (which is constantly updated).
Another important aspect of his system is how he manages to liquidate a large number of credit lines while avoiding large interest rate hits. I would not recommend trying to liquidate on your own without having some kind of system put in place. Those interest rates can eventually erase any profit one can hope to obtain on a real estate purchase to be rehabbed and resold.
Can you get the lines of credit if you have bad credit?
Alas, this is the most often asked question and there is no black and white answer to this. Having good credit is an advantage and you may be able to gain your targeted amount of credit faster than someone with bad credit. So yes you can get the credit if your credit score is poor, but it will take more work than someone who has good credit. It is still possible.
What is the benefit of having these lines of credit?
For starters, having these lines of credit offers an avenue of cash. Since the lines are unsecured you are able to be a cash buyer of property. Also, real estate investors can use these lines as an "emergency option" and can choose to hold them until they need the funds in a pinch. It also gives prospective investors an extra boost of confidence knowing that there is money available if needed. Never underestimate the power of confidence in negotiating a deal.
Is Tom's system right for me?
Well, it depends. What I would suggest is checking your credit score if you don't already know it. Once you know your score I'd suggest thinking about how much work you are willing to do to get these lines of credit. Especially if your own credit is considered "poor". If your credit is stellar than I would say go for it. keep in mind that there are initial costs to start Tom's system that vary from state to state as you will need to create a business entity to borrow under. It's not a "get rich quick" type of system. Maybe "get rich slowly and with much thought" is a better tag line as we all know the best way to make millions overnight is by winning the lottery.
Old and outdated. In the current economy this system is obsolete.
May have worked in 2007...wouldn't take my chances on a course like this today.