Just because you have bad credit doesn’t mean you can’t invest in real estate. There are plenty of ways to secure a property and start turning a profit on flipping homes.
Whether you want to purchase your own home or invest in real estate as a main source of income, having bad credits hurts.
Since the 2008 recession, across the United States, people have fought to keep their jobs, keep their homes, and keep their credit up. If you don’t have stellar credit, it can be difficult to get a loan and invest in real estate.
If you don’t have the capital for a large down payment on real estate, getting a loan is the next answer. But if you know you have credit issues, you may have already written off the idea of ever owning real estate. It can take up to seven years to start seeing real improvements on your credit score.
But don’t lose hope just yet.
There are people out there ready to help teach you how to invest in real estate property, even with bad credit. You’d be surprised what you can purchase these days. There are ways to get funds so you can invest in real estate and start flipping homes.
Personally Speak With Investors You Know
It’s part of your due diligence to put together a proposal for the property. This will take into consideration the market value of comps in the area, what kind of capital you will need for rehab and closing costs, and the after-repair value, or ARV. This will show investors you’re serious about making a deal and making a profit on the property.
Even if it’s your first property, as you do your due diligence, there’s a chance you’ll find an investor ready to help.
Personally Partner With Another Investor
This process could start with attending Real Estate Elevated seminars in your area. It’s here you’ll get to know other people who have already flipped homes before. Build a relationship with them. Once you do, you can talk about partnering up. You’ll put in the sweat equity if they can take care of the majority of the funding.
You might also consider talking with investors who are in your family, your circle of friends, or people you know professionally. Approaching more experienced house flippers you know is a great opportunity to not just work with someone you already know, but to work with someone who has experience in the field. If the potential is there for both of you to make money, they will see the property as a no-brainer.
Look Into Hard Money Loans
These aren’t like regular mortgage loans. Hard money loans look at the value of the property and its potential, not your credit score. The more success you see in flipping deals and building a stronger reputation in the industry, the easier time you’ll have convincing investors to trust you with their money.
As you gain experience, you’ll also have an easier time working with other flippers on large rehab projects as well as securing lower interest rates on your hard money and private loans.
If you’re serious about purchasing and flipping real estate but are stressed about credit, stop worrying and start taking action. Real Estate Elevated seminars are a great place to get started, especially if you want to gain insight from industry experts. The key to success is getting started, searching out investors, and putting in some sweat equity.
Sure, you may have to take a higher interest rate and a smaller rate of return early on in the game. But as you progress in the business, successfully flip more homes, and study the industry, your profits may increase and people will trust you more. Hard work equals experience and experience brings in capital -- and future investors.
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