Credit Ok but Cash Poor, Where to Start? - Posted by M Bryant

Posted by DoubleJ on April 25, 2006 at 07:08:54:

If you are at a 675 middle, you really want to jump about 5 more points to reach the next major milestone. Alot of better rates and terms are available after you reach 680 and up.

But you have a score that is capable of getting 100% stated non owner occupied loans for investment property. And while the rates and terms wont be very pretty for now, they would be a lot better than what you would probably get with hard money or investor cash.

Oh, and wholesaling is good for anyone that is cash poor, and partnerless. But you dont have to limit yourself to wholesaling. You could always look for partners on your home run deals that you find. No use leaving money on the table if you dont have to.

Credit Ok but Cash Poor, Where to Start? - Posted by M Bryant

Posted by M Bryant on April 24, 2006 at 15:48:35:

I am 3 years post BK; I have a median score 627. No derogatory credit post BK. My savings would not allow for me to make large down payments.

I live in the Atlanta Metro - Southern side and want to get an idea of where to start at given my stats.

Re: Credit Ok but Cash Poor, Where to Start? - Posted by Joe Kaiser

Posted by Joe Kaiser on April 24, 2006 at 20:47:44:

You’re entering with the misconception that this is somehow about
financing and credit scores and down payments. It is not.

You need to understand that all the pieces necessary for a successful
transaction can (and likely, should) come from someone else. Typically,
that person is a buyer, either wholesale or retail.

All you have to do is make a great deal and pass on the dream to
someone with those resources, letting them step into your shoes in the
process.

Remember Al Bundy and understand that to be a successful real estate
investor . . . you just need to be able to sell shoes.

Joe

Re: Credit Ok but Cash Poor, Where to Start? - Posted by Sailor

Posted by Sailor on April 24, 2006 at 18:38:22:

Here’s the advice I gave last year, & haven’t changed my opinion:

http://www.creonline.com/wwwboard/messages/91314.html

Tye

Re: Credit Ok but Cash Poor, Where to Start? - Posted by Joe

Posted by Joe on April 24, 2006 at 16:58:05:

  1. Figure out who the local investors are that want to pick up more deals.
  2. Go out and find the deals.
  3. Negotiate a price and put them under contract.
  4. Assign your contract to the local investors or do a double close.

$0 out of pocket (except for gas to drive around, paper to print your contracts on, your phone bill, and maybe some earnest money).

Assigning is for when your wholesale profit is a smaller amount. Double close is for when you think your investor/buyer will have a problem with you making so much money on the deal. Although they really shouldn’t care as long as they are making their own money … but if they see you making $100k on a $250k property where they will only make $50k, they might play games with you.

Re: Credit Ok but Cash Poor, Where to Start? - Posted by dutch

Posted by dutch on April 24, 2006 at 16:01:15:

But what do you WANT to do? Cash not always necessary.

I’ve said this a hundred times here and on other boards, IMHO, newbies should start out wholesaling (get property under contract, assign it to an investor/buyer). very little cash, very little risk, fast rewards, it gets you in the business. Once you are doing these and making cash, save some so you can do a deal yourself.

Get Bronchick’s course on flipping, here or at legalwiz.com. It will guide you thru it all and give you everything you need to do it right and ethically, except actually go out and do it for you.

Dutch
OKHomesavers

Re: Credit Ok but Cash Poor, Where to Start? - Posted by DoubleJ

Posted by DoubleJ on April 24, 2006 at 15:57:26:

You can still get 100% financing from a conventional lender with that score. Sounds like you would have to go stated income/verified assets unless you had a really good deal on the hook.

If you find a really good deal, find a good mortgage broker. I can get people with a 620+ and up non owner occupied loans that use the appraised value in place of the purchase price allowing for a lower LTV, and easier underwriting guidelines.

Unfortunately I am in Florida, so I can’t help you with this scenario. But I am sure there are good mortgage brokers near you.

Good luck!

Re: Credit Ok but Cash Poor, Where to Start? - Posted by M Bryant

Posted by M Bryant on April 24, 2006 at 16:54:08:

I had looked into wholesaling when I was in College but often feared I would get “stuck” in a deal. Then I thought sub2 would be a better way to go and slowly backed away to focus finishing school. After graduating and doint the “professional” thing, I realized that I hate I didn’t take the opportunity to get into real esetate 2-3 years ago. My business could have been flourishing by now.

Nevertheless, is it typically easier to “wholesale” than to go sub to?

Re: Credit Ok but Cash Poor, Where to Start? - Posted by M Bryant

Posted by M Bryant on April 24, 2006 at 16:57:16:

Glad to know my scores aren’t that horrific. Another poster, Dutch, suggested I start with wholesaling. This could give me time to get my score up more.

As far as points are concern, what are the differences in a 625 median and 675 median score with a +/- 15 point range on the minimum and maximum score.

Re: Credit Ok but Cash Poor, Where to Start? - Posted by dutch

Posted by dutch on April 24, 2006 at 19:19:00:

Yes, it is much easier to get someone under contract, promising them a cash sale, than to talk them into taking over their payments and leaving them on
the hook for the note. And you will have weasel clauses in the contract so you don’t ever “get stuck”. However, never sign a contract with every intention of completing it. But doo-doo happens, so if you can’t find a buyer, you can get out of the contract.

Dutch
OKHomesavers