Poor Credit For 1st Time Investor
Can some one tell me if there are any options for an investor with a 560 score? Would I be better off starting a LLC and borrowing through the corp? Also the homes I am looking into are less then 50K and that is a problem as well. Need help bad and soon. Thanks
Wheras this shouldn't keep you from doing deals, I would start sending out letters to get that score up. Go to the library and get credit repair books with sample letters to send to creditors and the credit bureaus
[addsig]
I am redaing right now The Credit Repair Kit. (Laughing) But I need something that will help me now. I can repair my credit but time is a issue I have been doing my homework for about a year. And have looked at 100's of properties and there are about 4 I would like to get by FEB. Ready to rent and Rehabs.
I don't think setting up an LLC for the purpose of funding will help you. I've found the lenders still require you to personnally guarantee the loan and will use you're personal credit scores.
Considered obtaining property on a L/O?
Do you have money for higher downpayments?
No I dont have a lot for a large down payment.
On L/O properties how do I get them and not be affected by my scores?
Big City
why do you need help fast and soon? Is there a project you are working on now? If so, tell us about it. I'm sure someone can help.
L/O or owner financeing. More flexibility with credit if you can get the owner to trust you.
I have been going real estate crazy. I have read,listened and talk to everyone that is where I have been and where I want to be. I live in DE and work for the Airlines so I am able to buy in diff areas. Right now I am dealing with DE,PA and VA. I have a broker that is helping me and he understands that I dont have a lot to put down. I am not that concern with the rate I just need that first one out the way. I would go hard money, rehab loans but what he has found for me that will do 100% want the loan to be min of 100K all the homes except one is under 50K. I am trying to find an owner that would sell but they want some cash to do that. Basically I have the know how as far as picking a gem but I need the cash to walk in the store.
I will try and get a grant from a place that I read about that will help you with downpayments..."Ameridream" I just did that Friday. I am hoping they can help me.
Please take this advise as a christmas present. You told us you have credit problems, you don't have a lot of money to put down, but you gotta do a deal now. I don't know you, but from your writing style I'm gonna guess that you are slightly compulsive and are willing to jump at any opportunity. Remember this ain't baseball cards. RE is one of if not the largest ticket item out there. 1st off you still have lots to learn. You need to learn how to structure a CRE deal, then you need to find the right property and then the right seller. Now true enough, if you look hard enough, you may find it and you should keep looking. But, just because you can buy a property doesn't mean you should. Somewhere in the article archives I've got an article about beginning in RE with no money, no credit, and a dream. I strongly urge you to read it and educate yourself a wee bit more before you take the plunge. I've been where you are, and I've done it. You will do it too, but take your time and find the right deal and the right opportunity.
Good Luck,
Shawn(OH)
Thanks....Life is a learning process. And I never said I have nothing else to learn. I am saying I have looked at well over 200 properties and have set myself on 4. I have taken everything I can into consideration to get down to these 4. I ask many many questions and have found a nice formula from all the advice. I am as ready as one could be. And I will not let a small thing like money hender me. Where this is a will there is a way.
BigCity,
Post details of your potential deals. Maybe someone will see specific solution or two for you.
Share more info. of the Ameridream that you found.
I am interested in De. + Va. as well. Is your Va. on the shore? ~C
No it is on the Border on NC. In a nutshell. One property is near the waterfront in DE. Needs work to get to good quailty for the type of buyers I would want. Around 50K looks like at least 15K to get it right. Values are going up real nice. Prob#1 My score is 560. I have a partner who has a 700 at least, and boroker said he could do it but I would only be able to be on the title. Prob#2 small down payment is all I have, and that would be eaten up by costs. Property once done would be worth in the range of 90K. Prob #3 Hard money would only give me 60%LTV BEFORE rehab which is no good to me at all.
The Ameridream has not gotten back to me yet. I just made contact with them on Friday. I hope to no something soon. I have two other companies that give down pay. help. I will get the info and pass it on today. Thanks
Couple thoughts:
1. DE has a 3.5% tax at closing, right? check into
2. DE had a fantastic loan program for rehabbing for both OO + NOO. If you have not done so, look into that program.
3. Are you intending to do the fixup work? If so, what is your experience and how will you work properties so far apart?
4. If your partner w/good credit is willing to carry the loan and put you on title, what is the problem?
5. Concern. With credit problems + little cash why 4 properties?
The just being on the title is not a problem. No I have two contractors that have done great work on my own home lined up and just made contact witha painter. So I have the elect,general con and a plumber. The homes that are in VA are already done. They need nothing. My broker is here in DE and has been looking for something that will work for me so I will mention the program to him. I narrowed it down to 4 from the 200 I looked at. I dont have to get 4 but I would like to get at leaset 2 by Feb. I dont think so with the 3.5% tax I did not pay that with my home and that was 2000. What about constuction loans? Where they would help me get something maybe from the sheriff sale and fix it to sell.
Unless you have some motivated sellers here I would think you need to concentrate on two of these deals at most and probably only one. If you have been studying over an entire year, you must have come across people talking about credit. Yes - deals can be done without getting your credit involved, but you need some motivation from the seller or a partner with excellent credit.
Either way you look at it, if you get a traditional loan, you credit score will be going down even more due to the additional inquires. Do you homework, there are more deals out there. Take the 1 or 2 out of these 4 that are the least amount of headache and go for it.
So what if you high score partner is the only one on the loan, you can sign a side deal with him making you liable to him for the payments if you want.
There are lots of ways to do these, I am just not sure you will be able to do all 4 without some serious seller motivation.[ Edited by dnvrkid on Date 12/06/2004 ]
Do you own your own home? If so I would take out a equity line. If not I would consider buying one it is much easier to get a loan on owner occupied property
With my score being 560 a line of credit is out the window. I have a line of credit anyway at the moment. It is for 15K My house is worth at lease 330k and I owe 205 on it. Does anyone think that even though I have that much equity I could still get a line with a 560?
One quick way to boost your scores pretty quickly would be to become an authorized user on a credit card or two or three. Make sure that the person you choose has a postive credit history for the card you become an authorized user for---preferably no lates and low utilization. Meaning that their balance is relatively low on the card (less than 30% is ideal) and that they have had positive history for a couple of years...the longer the better. You will take on the positive history of the credit card holder and gain an overall lower utilization for yourself thus greatly improving your scores ASAP as well as increase the average age of your credit history.
You can see a significant increase if you can do this and perhaps you can get that LOC afterall. This is not the same as becoming a joint account holder. Just know that not all credit cards report authorized users but most do. Other than that, try to increase your credit lines with your open existing accounts to lower your utilization.