REIA 188 Andy Williams: Learn how to use credit cards to build houses Freon the ground up

Welcome to Real Estate Investing Abundance, the show for busy, fulfilled professionals like you to learn how to develop financial independence built on solid passive real estate investments. Now, here is your host, Dr. Allen Lomax.

Hello, enlightened investors. Delighted to be back with you again today. I'm your host, Dr. Allen Lomax. Today, we are going to take a novel look at how to build houses from the ground up. Financing with credit cards. Andy Williams, after failing out of high school and doing 4 years in prison and having a son, there was only one way to go and that was up. So Andy had to figure out how to make it in the real estate niche with his background. And the easiest route was with less roadblocks was using credit cards. And now he is making at least $100K per And Gigi Flores is also with us. She is a Marine veteran. She works with Andi and she works particularly in the area of credit repair, helping others to find their way into real estate. Andi and Gigi, take us into the show and share a memorable experience from your formative years that helped you to be who you are today. And I'll let you decide who's going first here.

So what got me into the credit repair industry was my divorce. I was married to a gambling addict, and when he and I divorced, I was left with either paying the debt that was both under his and my name or feeding my kids. So I decided to let the debt do its thing, and I decided to feed my babies and I ended up with a 549 score. So after not being able to do anything with my credit, I ended up getting my credit straight and it opened so many doors for me in not only in real estate, but just in the, in the financial life. So that's what got me into the credit arena.

A lot of people learn about the joys of marriage upon divorce and finding themselves saddled with all kinds of Credit that they never thought that they would be saddled with. Yeah. Big surprise to a lot of people. And it's a shame people don't understand how those marital laws work and how, and how your spouse can tie you to mountains and mountains of debt without you ever having any say in that particular issue. Well, Gigi, I'm glad you found your way out of that dilemma and learn from it. So, Andy. What about you?

For me, the worst dilemma I had was being in prison. 4 years behind those walls, what people have to tell you to do, you know, basically like being a slave all over again. So the whole goal was for me when I got out of there was I had to find a way, I had to make it work. So first I started, you know, selling clothes, selling CDs, did that for a little bit, and I started my own paint shop, started painting cars. Then I just started, did that for like 9 years. Then I got into real estate, got into real estate, started wholesaling. Then I started fix and flipping, and then I started building. And building is like this, it was like the top, the top tier, 3 things in real estate I was doing. So now I'm just building, and here I'm looking to start doing multifamily. So it's like going to prison kind of made me like, just like, this was like the lowest point in my life, and I can't get no lower than this. So I can't do nothing but, you know, go up. So I had to just find a way to make it happen.

Well, I'm so glad you did find your way up and it has to be a very, very difficult road to travel. And I don't know how many people know this, but there's a lot of people in the United States who found themselves in that same situation. In fact, the United States incarcerates more people than any other country in the entire world. And I don't mean per capita, I mean More people than any other country. China, the communist China with a population 4 times the size of the United States has half the population, half prison population that we have here in the United States. So a lot of people find themselves in that dilemma and it's difficult to get back out of that. So I'm glad, Andy, you found your way out of that. And I know it wasn't an easy process to get out of that. So you say that you don't need perfect credit to get into real estate. I'm sure it would help, but you say you don't So tell us how you do it.

Basically, like, what we need, like, just need them to have like a 720 credit score. But if they don't have a 720 credit score, like, we always help them get that 720. But once they get this card, it's credit card credit. So basically help them get the high limit credit cards. Then we help them take the money off the high limit credit cards. And once you take the money off, you use that money to start the building process. We're going to start building. We're going to get all the way to like the foundation and the walls. Then we're going to have a hard money guy come in and lend us the money to finish the project and to pay off those credit cards. So that's the way to get in the game without having to deal with banks. Cause we got like, you got priors and, you know, convicted felonies. It's hard to get loans from a bank when you got all that stuff. So it's easier for me to create a way to do it with credit cards to where you ain't got to cut— you could cut those people out. Just got to have a good enough score to do it.

So help me understand this. So even if you've cleaned up your credit, you have a 720 credit score, but you've got a prison record. You're still going to have problems getting conventional financing. Is that what you're saying?

Yeah. Like if you try to get a loan, like just go straight to the conventional bank or anything, try to get the loan to start the project. It's going to be, it's going to be hard. It's hard for us to get loans. A lot of people check your background. A lot of people want like tax returns. They want a lot of stuff that a lot of people don't have. So when you're dealing with credit cards, you don't have to deal. You don't have to go through all of that. It's easier to get a credit card than it is to try to get a loan to start the process. But at the end of the process, we're going to have to— your credit is going to be good enough. And then you have something to lend against to where it all, it all worked itself up.

Yeah, but it takes— certainly it's going to take time to do. Well, how do you go about helping the people you work with to get these high-limit credit cards with prison backgrounds?

So when they joined the boot camp, If they do have like bad credit, if it's under 720, when they join the bootcamp, Andy pays for the credit repair. And once we get them to a fundable score, which is 720, then we help them apply. We basically tell them where to apply to get the high limit cards. And then let's say that they apply or they, they just get personal cards. We show them how to transfer that money from their personal over to the business side. Which essentially, let's say that the personal side cards are maxed out, we'll show them how to transfer the money over from the personal to the business, which will essentially drop the utilization on the personal side and transfer everything over to the business side. And the business credit doesn't impact the personal credit. So doing that transfer will essentially bump their score back up, which ultimately allows them to continue to apply for funding.

Okay. Interesting process. I don't know much about all of that. So you're teaching them to leverage their credit cards. To get into real estate and you're using both business credit cards and personal business cards. So what you're saying here is that the business credit cards are not being reflected upon the personal credit line. I didn't know that. I thought that your business credit cards would reflect upon your personal credit score.

No, the utilization on the business side doesn't have an impact on your personal side. It's only on the business side. And see, and the beauty of it too is if you accrue, you build the business credit, you essentially don't have to be a personal guarantor for the debt on the business side. So if you build the business credit right for the business, ultimately you're able to apply for funding or loans or credit cards just using the business as its own person, just as we do when we're building our own credit, you know, or our kids' credit. Like we start from scratch and then we start adding accounts, you know, and we build the personal credit up. We're essentially doing the same thing for the business.

Tell me, Andy or Gigi, about the credit repair process. What does that entail?

So depending on what you have going on on your report, you know, it could take anywhere from 2 weeks to— if we're trying to remove bankruptcies, we're going— we have to wait on the courts to get back to us. So it could be 3 months before we hear back from the courts. So it just depends on what you have on your credit report.

Well, how do you get them to remove a bankruptcy?

So for bankruptcy removals, here's the thing. Bankruptcy shouldn't be on your report because the courts don't report the bankruptcies to the bureaus. So what the bureaus do is they go fishing for this information. There's a website where all the bankruptcies are reported to, and that's what the bank or the bureaus have access to. And they go get that information from that website. And then they take that information and they report it to the bureaus. So that's how we're basically able to get the bankruptcies removed because they shouldn't be on there in the first place.

So does that take a letter from an attorney or?

No, there's no attorneys. All we need is a letter from the courthouse. Basically, whenever we get the letter from the courthouse, they basically tell us like, hey, we don't report anything to the bureaus. They— that's Basically, that's what they say. We don't report anything to the bureaus. And then the bureaus come back saying that they verified that information with the courthouse. So when the bureaus tell you, okay, we verified the information with the courthouse, but then the courthouse is telling us like, no, we don't provide that information to the bureaus. There's some type of miscommunication right there. So either one, the courthouse is lying, which they can't be lying, or 2, the bureaus are lying, which they are lying. Well, that's when they catch— that's when we catch them. That's how we get the bankruptcy relief.

Oh, okay. So you just, you catch them in a lie.

That's exactly it.

And they have to remove it.

See, and the beauty of this is, is that because there's the FCRA that protects us as consumers, right? So anything that's reported to our reports that's in violation of our rights of the law, we can invoice the bureaus anywhere from $250 to $1,000. So I tell my clients, if you're going to invoice them, hit them hard. And go for the $1,000. So at that point, if we get, when we get the bankruptcies removed, we, I tell them, I don't do the, this part where I'm invoicing that for my clients, but I tell them like, send the invoice and hit them hard for the $1,000 because they just broke a law. They violated your rights.

Do they often get the payoff?

I don't follow up with them as far. I send them the invoice. I give them the laws that were broken and it's up to them to get that money.

Yeah. Very interesting. What about foreclosures?

Foreclosures, as in they're still in the process or they're going, it's already been settled or what part of it?

I would say once it's, once it has been foreclosed.

So that can be anything. Let me tell you, sir, anything can be removed and the report can be manipulated in a way that helps you out. The bureaus are not federally regulated, right? So they set themselves up in the positions that they're in right now. So if all of us were to stand together and bankrupt them, we would be able to shut them down. I don't know what's in the works right now where the government is actually trying to stick their nose in there and they're trying to get a cut of like whatever the bureaus, however much money the bureaus are making, but we can get anything and everything removed from, from the credit report. I'm gonna tell you something. I went as far as when I moved into this house, I went as far as removing an active mortgage from my credit report just to see how far I could get through underwriting. Before they caught it. I mean, they caught it, but I removed it.

Wow. What about student loan debt?

Student loans can be removed as well. Student loans, child support, bankruptcies, collections, charge-offs with collections. So let's say you're Wells Fargo Bank. I'm Gigi and I owe you $2,000. You've been trying to collect $2,000 from me for the past 2 months or 6 months. You came to the conclusion that I, you're not going to be able to get those $2,000 from me. So you're in the business of losing money. What you're going to turn around and do is tell the IRS, hey, I've been trying to collect this debt from Gigi for the past 6 months. She hasn't paid it. So what the IRS is going to do is they're going to go ahead and give you a credit for that debt that they weren't able to collect from me.

Right?

Mm-hmm.

So now once they give you the credit, that debt is considered paid in full. Now what Wells Fargo does, or any lender does, is they turn around and they sell that debt to a collection agency for pennies on the dollar, right?

Mm-hmm.

So now that collection agency turns around and they come after me for the original amount and they tack on an additional admin fee on there, right? Now what they're doing is they're committing tax fraud. One, Wells Fargo committed tax fraud, and now the collection agency knows that that debt was paid for, so they're committing tax fraud. So that's how we, we remove that collection to its entirety. And we still can collect money on, on that debt.

Oh, wow.

This is all in the FCRA too.

And the F— the FCRA, is that what you said?

Yeah.

It's the FCRA.

What does FCRA stand for?

Let me tell you. It's the federal— I'm sorry. Like I know the acronym.

Federal Credit—

It's the Fair Credit Reporting Act.

Fair Credit Reporting Act.

Yeah.

Do you know the number of the act?

That's the entire— it's— there's laws within the, within the, the FCRA. So there's, there's numerous laws. And after the government saw that the bureaus were getting away with so much stuff and they couldn't control them, they put the FCRA intact to be able to help us as consumers. And that's what we should be using to protect us.

Oh, great. Good. Well, Andy, we've talked about credit here and I appreciate that information, Gigi, valuable information for sure. Andy, you are building, you started out fixing and flipping. You've shifted to actually developing. Tell us about that transition from fixing and flipping and why you have made choice to focus upon development rather than purchasing existing properties.

The reason why I started building now, because it's harder to find something that you can buy that's already there and make money on it because everything is so high with the way the market is now that you're paying like double the price. You're paying, almost paying like retail price for fixer-uppers.

Yeah.

So immediately it was cheaper for me. Just like I could build a house for $200K. If you, if you try to go buy a house to fix and flip, you're going to pay about $220K. That is still going to need about at least $50K, $60K in work. So you're going to be at like $300K and the house only worth $350K, $360K.

Right.

So it ain't enough profit in between for me. So when I build, I build at $200K and I sell $375K, $400K. So I make, Anywhere from minimum of $100K, maximum $200K on one house. So it only made sense for me to do the developing instead of trying to get out here and fight with everybody else who's trying to buy these fix and flips, all the competition.

Right. So that finished price, I guess, is including the property purchase and the construction costs on that.

Yes.

Are you serving as the contractor on that or do you have a general contractor? How are you, how are you handling?

No, I'm working under a general contractor. I got a general contractor. I pay him to use his license and I sub out all my work.

Okay. Where, where is it that you're working out of?

Out of the Tampa Bay area, Tampa, St. Petersburg in Florida.

So in Florida, that's, well, that's interesting. I mean, it doesn't really surprise me. I mean, the housing inventory is so, so tight these days that it is almost impossible to find properties. The, I guess the, the thing about development, the risk in that is that it's going to take several months to build a house.

I don't know.

It may not take you a whole lot longer to build from foundation up to finished product than it does actually to do some flips, but it is going to take some time. And the market is in a great place today, but by the time you finish the house, the market could be in an entirely different place. How are you mitigating for that particular aspect of the risk?

I look at it like this. Okay. If I'm all in on the house too, and the house is worth $400,000 and the market crashed, how much do you think the market's going to crash? It shouldn't crash. It won't crash to under my $200K that I'm in.

Well, in 2008, it actually did crash that much. And in fact, I mean, the markets just froze and nobody was buying.

Back then everybody was buying with credit. Now everybody buying cash. So you can't, you can't really crash cash because it's everybody's money.

Yeah.

Back then everybody was getting loans. They couldn't afford the houses. Now everybody's spending cash on it. So if the market do crash, I don't see it crashing more than half what the houses are worth. I just see it stabilizing because there's so much in demand. I don't see it— and then people coming from out of state buying down here, they paying $20K to $50K over asking and they spending cash. Like the people with programs down here that help you get houses, that they're not even being able to buy any houses because Everybody from out of state coming to, you know, winning the bids on them.

Wow.

Knocking them out the way. Well, I don't want to see it happen no time soon down here. Probably in some markets it's like, it's crazy.

Yeah.

You never know what markets are going to do, but that, that boy, they've been going up more than they have this, this last, I guess it was this last 5 years, more than they ever have, I guess, in the last 100 years. So who knows? What's going to happen.

And again, okay. Just say I'm in at $200,000 and I just— the market do crash.

Okay.

I can rent it. It still rent out for $2,500. Yeah. So I'm still able to pay my mortgage and still have a little extra cushion, little leftovers.

Yeah. So you've got a plan B.

Yeah. I always keep a plan B. Like, you know, you gotta meet those numbers. The numbers gotta make sense.

Yeah. Plan B is always a very good idea. Well, Gigi and Andy, you've got a lot to offer here. So tell our viewers and listeners how it is they can get in touch with you and take advantage of the opportunities you have for them.

I can be reached on Instagram and it's Miss C Notes, and it's S-C-N-O-T-E-S, or at my telephone number, 404-458- And Andy, how about you?

Andy, I could be reached at Andy Buy Houses on Instagram, A-N-D-Y B-U-Y H-O-U-S-E-S. And we also got, got a bootcamp coming up June 11th and 12th. Well, I'm teaching everybody how to do this, how to build houses using credit cards. I do one every 3 months. So if you want to get in, just look at my bio and you'll be able to sign up for the program to where we teach you how to do it.

And they can find information on the bootcamp on your website at AndyBuyHouses.com. Okay. Wonderful. Excellent. Wonderful information. Thank you all for being with us today and sharing with us this very novel approach that is helping people who've been knocked off their feet to get back on their feet. It's a wonderful thing you're doing. Thanks so much for being with us.

You're welcome.

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