What are real ways someone with horrible credit can invest in the real estate market?
Posted on January 30th, 2010 in Renting & Real Estate | 4 Comments »
AntzaGurl asked:
I hear all this talk about not using your own $$ or credit to buy homes, fix them up and sell them, my credit is CRAp literally, but if theres away around that I would love a piece of this real estate wealth pie. My husband is a contractor and he knows how to fix places up, it purchasing power we lack…any “secrets” …PS I heard something about using the SBA and business credit, is that an option?
4 Responses
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First, you have to clean up your existing credit. If your personal credit is in the toilet, you are going to have a heck of a time finding investors willing to loan you money for a business. Talk with a credit counselor to see about getting your credit repaired. A good counselor will help you work with your creditors to reduce your interest, eliminate some late fees, and get you on a plan to pay what you owe. Then, once you have that straightened out, you can look to building a business line of credit.
Even if you get a line of credit for a business, unless you incorporate, you will still be personally responsible for the debt.
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Cash is your best option. Those late night infomercials are junk. Don’t waste your money. The SBA only insures a business loan, they don’t grant it. You will still need good personal credit in business. You will have to sign the note, and pay it off personally if the business goes under.
Flathead Lake Real Estate
I’ve heard all the same things you have… the “no money down, bad credit not a problem, use other people’s $$ to get rich” stuff they show on late night infomercials. But, they all seem to be scams. I’ve looked into quite a few of them. Bottom line, if you have the credit score, you don’t need the cash. If you have bad credit, you’re going to need a large down payment. One option – first time homebuyers usually get a better interest rate and more flexible terms – credit and downpayments are easier. So, you buy one home (will have to be your primary residence, though) and do the repairs/upgrades while living there. Then, you sell that for a profit, using the profit to buy the next home, etc.
Wish I knew something about the SBA/business credit option!!!
For the “get rich quick” schemes – check this link out before sending them $19.95 or $99.99.
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No on the SBA or business credit. The way you do it is you find a house that is for sale for less than 50% of its assesed value and any bank should fund it because its low risk.