The most common question you’ve probably heard of when it comes to purchasing a home is “How Can I Buy a House if I have a bad credit score?”. That is a very good question and before I give you the solutions to it, you need to understand that the average credit score in the U.S. is anywhere from 669 to 699 depending on which credit report is used. Although that is the average score there is still quite a huge sum of Americans whom still have a credit score less than 600, which means this individual are unable to obtain a mortgage, buying a house or even real estate investing can be hard for them.
Now there are two sides to solving this issue, there’s good news and there is bad news.
The good news is YES, you can invest your money in real estate with bad credit. I’ll explain a few ways you can do it later on. Some of you reading this are probably new and not sure how is your credit score rated. Don’t worry below I have listed down the numbers for you to see. As for those who already know about this, bear with me and I’ll get right to the ways after this.
Poor: 579 and lower
Fair: 580–669
Good: 670–739
Very good: 740–799
Exceptional: 800+
Now that you’ve seen the value, which category do you fall in? No matter what reason you have for having low credit, it doesn’t matter anymore. It’s done. All you have to do right now is to find ways to make it better.
The truth is, a credit score is merely a number that represents your financial ability to manage your money. Anyone with a bad credit score is someone who fails to organize their money properly. However, do not take it that real estate investing will help you solve your bad money habits because it won’t. It all has to come down to you and you need to change your mentality and habits about money. What I mean by this is if you want to see some change, you need to start by paying everything on time, no matter what. Consider getting a secured credit card. A secured credit card is a credit card that has a maximum limit of whatever dollar amount you deposit with the lender. Start by doing this little things step by step in order to build your trust back, it’s going to take some time but if you are fully committed it can be done.
For those of you who have made a change deep within your heart and are working on improving your credit, that’s good. Let’s discuss some of the things you can do
What I like about partnership is that it brings everything together, because everyone has something they are lacking
Partnerships are one of my favorite ways to invest in real estate because everyone has something they are lacking but maybe you have something that they don’t have. Time? Knowledge? Passion? What can you bring to the table that will help them achieve their goals while you achieve yours?
With that being said, you must be careful in this process because getting into bed with the wrong person can cause you. Do your homework, and choose your partner carefully, and as is true with all these tips, only invest in great deals.
- Rethink Seller Financing.
How does seller financing work is that the seller agrees to finance the property, rather than making you obtain a new loan? In other words, the seller agrees to let you make monthly payments to them until the property is paid off (or the term of the seller-financed loan ends).
Seller financing can really be helpful if your credit score is low because the sellers typically will not ask to see a credit score. What I would suggest you do is to get a seller that owns the property free and clear that way you would not have any problems like foreclosure due to mortgages in the future. So to be safe look for deals where the owner has no mortgage. Why would I recommend you to do this is because seller financing offers a win-win situation for all parties, so why not.
- Try private money lenders.
This is another way you can get some capital in order to invest in real estate. Private money lenders, in other words, are someone with a lot of funds available on hand and they are looking at ways to make a good return by borrowing out their money. They can be anybody, not necessarily have to be a real estate agent which is why you do not have to worry about credit score when you deal with them.
One thing to keep in mind when dealing with other people’s money is to be very careful it. Do not take it for granted and lose it all on a bad investment.
Now that you’ve seen some of the things you can do to help you achieve your investment use these tips wisely. If you are interested in learning the top house design for 2019, you can view it here. Trust me you will benefit from it.