▷ MONITOR AND IMPROVE YOUR PAYDEX SCORE, WHICH REFLECTS YOUR VENDOR AND CREDITOR PAYMENT HISTORY. ▷ USE CREDIT TO BUILD TRUST WITH LENDERS — BEFORE YOU NEED IT. This is how credit becomes a proactive growth tool, not a reactive crutch. It’s not about debt — it’s about positioning. Strong business credit gives you leverage: to move on deals, improve properties, and weather market shifts without losing momentum.
Establishing a clear entity strategy — often using multiple LLCs, series entities, or a holding-company model — allows you to isolate risk between properties, maintain transparency for lenders, and simplify accounting. It also signals professionalism to potential partners and funding sources. When structured correctly, your entities should do three things: 1. PROTECT EACH PROPERTY FROM CROSS- LIABILITY OR PERSONAL EXPOSURE. 2. OPTIMIZE TAX OUTCOMES BY ALIGNING HOW INCOME FLOWS THROUGH THE STRUCTURE. 3. PREPARE FOR SCALABILITY, MAKING EACH NEW ACQUISITION EASY TO INTEGRATE. At PRIME Corporate Services, we’ve seen investors lose six figures in taxes or lawsuits simply because they didn’t separate assets or chose the wrong structure for their goals. The fix isn’t complicate —it’s just intentional. The takeaway is simple: You can’t scale what you can’t protect. A thoughtful entity structure gives you both safety and momentum. TAX STRATEGY If structure is the foundation, tax strategy is the engine that drives performance. Affordable housing deals can operate on thinner spreads, but that doesn’t make them less profitable. It just means every tax dollar counts. One of the most powerful yet underused tools is cost segregation, which accelerates depreciation by reclassifying components like flooring, fixtures, and mechanical systems into shorter tax lives. This unlocks significant early-year deductions — cash that can be reinvested into future projects.
Bonus depreciation remains a major advantage when paired with cost segregation. Capturing it can dramatically enhance cash flow in the first year of ownership. For those looking to keep capital compounding, 1031 exchanges remain essential. Rolling gains from one property into another defers taxes and preserves momentum — a critical strategy for portfolio growth. And for active investors managing day- to-day operations, S-Corp elections can help reduce self-employment taxes while allowing flexibility in distributions. The key is coordination — making sure your entity type and tax strategy are designed to work together, not against each other. When your entities and tax plan are aligned, you’re not just minimizing liability; you’re creating financial efficiency that compounds over time. That’s what separates one-off deals from scalable wealth. CREDIT & LEVERAGE Even the best structure and tax plan fall short without the ability to fund and scale. Affordable housing often requires creative financing — and that starts with strong credit. Most investors don’t realize they can build a separate credit identity for each business entity. Doing so protects personal credit, increases access to capital, and strengthens relationships with lenders who look for disciplined borrowers. A few fundamentals make a big difference: ▷ BUILD BUSINESS CREDIT TIED TO YOUR ENTITY’S EIN. ▷ REGISTER WITH DUN & BRADSTREET TO ESTABLISH A BUSINESS CREDIT PROFILE.
Credit is the oxygen of portfolio growth. When managed well, it keeps your business breathing easy — through every cycle.
ACTION & ALIGNMENT Affordable housing sits at the intersection of purpose and performance. It’s one of the few investment spaces where you can create real community value while building durable financial success. But those outcomes don’t happen by accident — they happen by design.
TOMMY THORNBURGH
Tommy Thornburgh is the President of Prime Corporate Services, a national leader in business structuring, asset protection, and tax strategy for entrepreneurs and investors. He helps real estate investors turn financial complexity into clarity, building sustainable wealth through proactive planning. Learn more at https:// primepartner.info/ThinkRealtyArticle.
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