Owning a Business - Credit, Renting, etc

[andrew]

Alright, So I've had my own business for almost a year. There hasn't been any sales so far, because the product has still been in development. During this time I have done misc freelance to stay alive. The business is a sole-p, and I'm the only one working it.

So now I'm thinking this summer I want to move and get my own place. By then I will have income from my business, BIG passive income. Now since I'm 19, I don't have much credit. I have never worried about it since I usually pay everything upfront. Now with my business I'll have plenty of money to rent or whatnot, but I'm assuming they do credit checks and look for stable employment. Both of which I have none of.

My mindset is that I own a company at 19, that makes me a hell of a lot more responsable than some kid working at walmart for a year. Maybe not though. I mean if I have proof that I'm making the money, I don't see why I should have a problem.

So my question is, what kind of issues should I be aware of when looking to get a new place? Should I say I have been employed for a year by (my company name here)? But then they call and ask for somebody and that would be me. Should I buy a house and rent out rooms instead of an apartment?

I know it's going to happen, I just don't know step-by-step. I have a general idea, but I'm trying to think ahead about any road blocks that I can take care of now.

Thanks,
Andrew

[Hugh Hollowell]

Rent as long as you can and pile up your cash reserves. The life of an entrepreneur (especially in the first few years) is fraught with peril. You will never wish you had less cash.

[dgorila1]

Look around thoroughly until you find what you need for the business. Do you need just some office space or something bigger with warehouse/garage space? You should be able to find something small and affordable if all you need is space for an office to work from. Look in buildings away from the "main" business or industrial areas, unless being located in these areas is important to your business. This applies to both a large or small space. Dress professionally when meeting the potential landlord, be confident, and when they ask tell them you are the owner and president (or whatever title) or your company (ACME Inc) and you are looking for a place to expand (or something along this line). All they care about is having a tenant they know is going to pay the rent each month and not destroy the place. Make up some professional business cards to have on hand to hand out if needed so they can contact you. The key here is professionalism! If you go in wearing baggy pants looking like the typical 19yo punk, you won't be taken seriously. making your business a success is serious, so take it serious when dealing in all aspects of it. Same with arriving to the appointments...don't roll up in a g-car rice rocket thats all pimped out. Rent or borrow a "conservative" looking car for the same reasons as mentioned above. If you have plenty of case as you mentioned, you will have enough to give the landlord for a deposit (AFTER reading and signing a legit lease agreement with him/her), which will validate your professionalism.
Depending on your business, you want to make sure the place is set up with the needed utilities (high speed internet, required electrical for equipment, etc). There are a ton of commercial and office spaces out there, so if you don't like something about a particular place, keep looking. You have the cash in hand, so you are in the drivers seat. As you are out and about each day from now on, always be on the lookout for a potential site. You can usually find something this way, allot of times for a good price if you see a place you like that isn't being marketed but looks empty. Find the owner and see what the status of the place is and if they are looking for a tenant. Good luck :-)

[andrew]

Thanks for the suggestions, great advice. Now what about personal renting? Like for a home instead of a business?

[ahimel]

I'd explain the situation to the potential landlord upfront. When they say, "We'll be running a credit check on you" say, "That's fine, but I'm afraid you won't find much. I haven't had much opportunity to build credit. What else can I do that can help you feel more comfortable renting to me?"

That might be references. If your vendor/manufacturer/customers say, "Oh, I love working with Andrew! He always pays on time/gives me what I need/delivers what he says he will!" that will make them feel a lot better.

It might be an extra cash deposit. If you offer to pay two months upfront instead of just one, a lot of landlords' objections will go away.

I would, however, seriously consider buying a place and renting rooms to others. Why pay to live someplace when you can turn your house into cashflow instead?

Good luck,

Amanda

[andrew]

I really want to do that, but buying a house without credit will be hourendous won't it? I also don't know the area too well. If I can get down there in an apartment for a few months first, then go from there, it would make more sense right?

[ahimel]

It depends on what kind of assets you can put up. Non-existant credit won't matter as much if your down payment can be larger.

The thing is, if you don't have the assets or credit to qualify for a traditional loan, you probably won't have them for 2-3 years... a couple of months won't help.

You can also look at non-traditional methods, like rent-to-own. I can probably find someone in the Bakersfield area to help you out with that; PM me if you're interested.

[dgorila1]

If will be new to the area and don't know anything about it (or how long you will be there) definately rent for awhile until you are settled and sure this is where you will be for some time. Don't worry too much about the lack of credit history and such.....just offer to pay an extra months deposit if asked like mentioned above. Once you have your business established and doing well, you'll have a track record with a bank and should be able to qualify for a mortgage if you decide to buy.