Posted by Tony-VA/NC on September 21, 2003 at 19:17:57:
Now you have asked investing questions.
Much of how you will proceed will be dictated by the deal and your knowledge base. Having done one land/home deal, you have some experience with banks.
But don’t fall into the belief that banks are your only means of acquiring property. Remember, it is called “creative real estate investing” for many of the reasons you mentioned. Low cash is one.
While I am a firm believer that you need to have some cash to solve problems, I do not necessarily believe you need to use your money to acquire properties.
So I repeat, your credit score may help you get loans but it does not ensure you will find deals or close deals. Those answers are found in books and courses here that can provide you the basis of knowledge while the forums provide a sounding board as you apply that knowledge.
Credit score= 722. Exactly how good is that? - Posted by Rikki
Posted by Rikki on September 21, 2003 at 08:42:53:
Recently while securing a loan for a used vehicle the loan officer showed my my credit score which was 722. Exactly how good is this? In what bracket would this put me in? Is there particular brackets or categories? Sorry for the newbie questions.
A FICO score over 720 will get you the best offers most of the time. The thing is, a score that an auto dealer uses is most likely different than actual FICO.
Less than some, better than some - Posted by Tony-VA/NC
Posted by Tony-VA/NC on September 21, 2003 at 09:29:41:
I am not sure how your question applies to mobile home investing. Perhaps if you could ask a question that is subject to your use of credit it might be more relevant.
A good credit score used to buy only used cars on payments is not truly of much use now is it?
A bad credit score that forces someone to invest creatively to become successful isn’t necessarily a bad thing is it?
A combination of the good credit and the application of investing principles is a force to be recond with.
Posted by Greg Meade on September 21, 2003 at 09:24:44:
approx 60% of adult americans have a worse score…means 40% have same or better. This score will finance anything including 100% stated income mortgages and most anythig else! Congrats. My son works for a Honda dealership in NC and pulls dozens of fico’s per week. Saw one one 850 score. Very old guy with 370k available credit lines …and you guessed it zero balances on every one!
Re: Less than some, better than some - Posted by Rikki
Posted by Rikki on September 21, 2003 at 13:16:08:
Let me fill in some details. The loan officer was from my bank (Local Government Credit Union). It was not a car dealership. I was just curious about my credit score so I asked when I applied for the loan. When she pulled up my credit report my score was 722. I was wondering in what exact category this puts me in (good, bad or in-between)so that if/when a deal comes my way I would know if my credit score would be “good nuff”. This is same Credit Union that loaned me $15,000 1 year ago to buy 1 acre of land with well and septic tank and a 1992 singlewide (I rent it out). Now I’ve made it relate to mobile homes by quoting Lonnie and including an investment into a mobile I made.
Re: Less than some, better than some - Posted by Tony-VA/NC
Posted by Tony-VA/NC on September 21, 2003 at 16:23:00:
I still don’t see how this relates to any question regarding investing.
You are asking mobile home investors, the majority of whom buy for cash, where your credit score rates.
Apparently your score is “good enough” for your credit union, where the question is most appropriate. As for investing, that score alone will not determine if you can make a deal happen. In most cases, your credit score is merely a side bar. Yes, it is good that you make your payments and have scored a reasonable score but lenders look at far more than your score. They are looking at your entire financial profile. What are the paid on time accounts in your credit report? What is your net worth? What is the equity in this deal? How much are you putting down? What is your debt to income and other various ratios.
But again, if you are investing in real estate and/or mobile homes, few of your deals will come directly through banks who go through all of this. REI will involve owner financing (they don’t know how to read a credit report much less pull one), hard money lenders, lease options etc.
Just because a banker was suprised by your score, don’t let that fool you into believing that real estate investing will be easy. Even a perfect score has little effect on lending decisions if the deal is not something the lender prefers, or the deal is too thin, or you have already leaveraged other deals and banks have capped you out. Overcoming that cap will be a matter of investing and not a matter of credit score.
A credit score is a function of the kind of debt you have and how promptly you pay. It has nothing to do with how well you find or capitalize on deals. Quite often true “deals” require a quick, cash sale to make it a deal. A lender will be of little use in aquiring this property. They may be of assistance in the refi but unless you find the ability to buy the property first, the credit score and the lender are of no use.
A stated income mortgage is… - Posted by Greg Meade
Posted by Greg Meade on September 23, 2003 at 17:34:13:
also called a lo- doc or no-doc mortgage. These are very helpful for self-employed and rental intense households… a not very well known fact is that a MHP is no good for income verification until it is owned for 2 years or so. when we moved to FL and sold our Park in TX (had to wait 6 months for all the cash), could not build a home, as the old park was sold and not paying me monthly and new park was still too new . Went to Amsouth Bank, they ran credit, took a copy of my SS card and Drivers license and had me a conforming 5% construction and 10 year converted 5% mortgage in 16 minutes. broke ground on new home the next friday and both my wife and i were drawing unemployment from TX!! Bank knew and laughed…said that was the beauty of stated income. The name comes from a slip of paper you sign saying i make 6700 per month net(or whatever) income! The bank said the loan fit fannie mae guidelines and when i paid off loan 7 months later, there were no penalties. Saved me over 6 months in getting home built.
Re: Less than some, better than some - Posted by Rikki
Posted by Rikki on September 21, 2003 at 17:41:33:
Thanks for the input Tony. I tried not to be long winded in my previous post but I guess my question(s) were not all that clear.Why do I want to know about my credit score? Because at the present time I do not have a cash reserve to pay cash for deals. Aside from owner financing, the only route I could pursue would be borrowing from a bank. In order for the bank to loan me the money, it would look at the things you mentioned AND my credit score. Should I try to improve this score? If so how? Is it right in line where I need to be? My credit score will be an important factor for me in the beginning. This is why I wanted to know about credit scores. Greg (and the rest of you that replied) pretty much answered my questions for the most part. Banks will play a role for me in the initial start-up due to my having no cash reserve. I am not looking for quick Lonnie deals at the present, but rather buying land and mobiles for renting and/or sale the mobile by itself and rent the lot. Is this not an investment on my part if the goal is to get out more than I put in? I would assume that a good deal of the investors on this board found themselves in my situation when they initally started- limited funds and having to borrow until they built up a reserve. So who better to ask than the mobile investors who started in my situation? It relates to investing to me, a beginner trying to start.
Posted by Philip on September 22, 2003 at 08:14:24:
Since I am new…It works for me! I have told many folks that the first park manager I talked to told me NO!, about buying in his park. Then he took me inside and talked for 2 hours about how to do “this business”.
“Smart is dumb and Dumb is smart” in negotiating. It applies in the learning process, too. I have had lots of help from older, more experienced park owners, investors, etc. They could tell I was dumb! Not just acting! I was no threat! The Forrest Gump of mh’s!
I know this will be tough for a girl, but it works for men all over the world in every subject! How do you think my Dad managed to get every repair on everything done by someone else? Me, my brother, my Mom…but Dad was always too…“dumb”!
Philip
