You know I love to coach students and clients. It’s something I’m super passionate about because when they succeed it’s an amazing feeling for them AND me.
So, a student of mine brought a concern to me recently. He has bad credit.
Look, it happens. I’d say most people at one point in their lives have had sucky credit. I did. Some of you reading this are likely in the same boat. It doesn’t mean you suck. $#&! happens, right? Bad credit happens to good people.
Let me say this: It does not mean the end of your investing career. Don’t give up.
So this student wants to get into rental investment properties but can’t get a bank loan because of his credit situation.
Well, I’ve got 5 ideas so you can keep moving forward with rentals even if you have bad credit.
- Get creative with your financing. Offer owner financing or lease options.
- Be a deal finder. Find someone to partner with on deals—active investor landlords who have access to cash or financing. Bring the deal to them and split the equity and cash flow.
- Borrow private money from private investors. This actually becomes easier and easier the more deals you do. You’ll have a track record to show = credibility.
- Establish a business line of credit or credit cards. WARNING: BE CAREFUL WITH THIS ONE. This is only a short-term strategy. The best way to do this is after you’ve bought the deal, bring in a partner investor who can buy you out to pay off those credit cards.
- Have hard money lenders on your team. Pro Tip: If a hard money lender doesn’t want in on a deal, it means it’s not a good deal, so you should walk away from it. And be aware that hard money lenders charge a lot.
2 final thoughts…
Check out this helpful book: Building Wealth One House at a Time by John Schaub.
And, make sure you get your credit fixed, but remember that you can still actively invest while you’re working on that.