Can it be done? - Posted by Jared

Posted by John Corey on April 06, 2006 at 20:41:14:

There are a number of ways to invest in RE without using your credit.

When you have poor credit you need to focus differently then when you have good credit. Find some articles, books and other materials where they discuss subject-to deals, lease/options, using OPM such as hard money and how to partner with someone who has the credit. Then consider what seems to be best for you and your local market.

Do continue to work on improving the credit as it takes both time and money to achieve a great credit score. Cash to pay off the past bills and time to show you can handled your debts wisely.

John Corey

Can it be done? - Posted by Jared

Posted by Jared on April 06, 2006 at 17:51:33:

Hey guys,
Great site. Something I am looking to getting into.

Can it be done with really poor credit? I am working on rebuilding my credit now, but would like to venture into this buisness.

Any insight would be great.


Re: Can it be done? - Posted by Ed Garcia

Posted by Ed Garcia on April 08, 2006 at 01:31:22:


.Here are 9 ways to do a deal with no money and bad credit.

In my workshop, I teach that there are at least 9 different ways you can do a deal with poor or bad credit.

Now before I give them to you, I want you to know that I’m really supportive of learning deal structuring. The first thing you need to do is, “investigate your deal” to know what I call (where the bodies lie) another words what is the seller’s main objectives or motivation. That allows, you to have an idea of what approaches are going to be compatible with the sellers needs, allowing you to do the deal.

Here are the 9 ways that I’ve mentioned.

(1) PARTNERHIP: Find a 50/50 partner. It don’t have to be 50/50, it can be what ever you can negotiate.

(2) FLIP: the best way to flip is to find a potential buyer first and then find a property. You can do this by running an ad on a property to see what kind of action you get. Once you have a potential qualified buyer, you’d be surprised how easy it is to find them a house.

(3) LEASE OPTION: Many times you can buy and sell with a lease option. We call this a “Sandwich Lease Option”. Jared, I’m not going to go into any great detail, you can find this information all over this forum.

(4) SELLER CARRY BACK: This is one of, if not my favorite way to buy. Now the best way to utilize this system is to do a second seller carry back in order to give the seller some cash in the deal. If money doesn’t exchange hands, many times the seller doesn’t feel that they consummated a sale.


I find a house that has a small balance on the first. Lets say the house is worth a $100,000; the balance on the first mortgage is $30,000.

If I wanted to buy this house for lets say $80,000, I could ask the seller to carry back $15,000 and go to a hard money lender to borrow 65%
of AMV (appraised market value) of which is $65,000 and the seller carrying $15,000 in second position, would ad up to $80,000. It would also give your seller $35,000 new cash, and $125.00 income on the $15,000 loan that they carried at 10% interest only, for 5 years.

(5) HARD MONEY: Hard Money, is an equity loan made at approximately 65% LTV, based on the equity of the property only. Credit is not a consideration.

(6) HARD MONEY/SELLER CARRY BACK: Again, You can have the seller carry back a second and refinance the first, giving the seller some money. You can do variations of this system.

(7) SUB PRIME FINANCING: Many National lenders will provide financing at 70% with poor credit and won’t verify money down.

(8) SUB PRIME/ SELLER CARRY BACK: Again this combination can provide money to the seller, rather than ask them to carry the whole thing. Also there are local independent portfolio lenders that will lend as well as mortgage co’s and I always recommend seeking them out. National one’s would be Associates Finance, American General, Beneficial etc.

(9) CREAT YOUR OWN MORTGAGE: In our workshop, Terry Vaughan covers this, and shows you how to discount it and market it. You can find an article here on this site written by Terry?s wife J.P. Vaughan in the How-To Articles.

Ed Garcia