When to start establishing business credit as an LLC?

I want to start purchasing residential rental property, when should start establishing business credit? Can I form an LLC and build credit before I even buy property?

Answer

You can begin establishing business credit as soon as your LLC is created.

In terms of purchasing property, it is unlikely that even "good" business credit, if your LLC is small, will ever get a mortgage that is "non-recourse".

Buy non-recourse, I mean a mortgage where you won't have to personally guarantee the note. With large, well established LLCs (such as a public company), they can get financing without a personal guarantee of an officer.

But for a small real estate investor, you're probably going to guarantee the note.

Where business credit comes in handy is in establishing lines of credit with suppliers and credit cards without a personal guarantee.