Posted by Debra G.-VA on May 23, 2000 at 10:07:10:
I just found out that this park management just checks rental references and job history. They don’t pull a credit report at all. Hmmm… I’ll have to talk more with the couple and decide how I want to handle this.
How well should I screen buyers with bad credit? - Posted by Debra G.-VA
Posted by Debra G.-VA on May 23, 2000 at 08:34:07:
I have a potential buyer for a 1983 home that needs some work - worth $8,500 fixed up, maybe $5,500 as is. Will have $2,500 invested in it, before fixing. This buyer is willing to buy AS IS (great plus, in my book!) as he has the construction skills to work on it. They have $1,000 down payment. Currently living with family, so they don’t have a rental reference. They say wife has medical bills and court costs on her credit, and he has an old student loan.
Should I still check their credit report, to make sure they are not professional deadbeats? Some of you folks say that you don’t care what the buyer’s credit is if they put at least $1,000 down. I would make at least 150% yield on this deal, if it goes through OK.
So far, I’ve preferred to finance buyers with good rental references, even if they have no credit. The park management had previously approved them for a park rental, but they didn’t take it as the home was in bad shape for the amount of rent they were charging (which I’ve heard other renters say about the same park).
Any suggestions? Thanks!
Re: How well should I screen buyers with bad credit? - Posted by Judy
Posted by Judy on May 24, 2000 at 20:22:01:
Why don’t you run the credit report, then you’ll know for sure what you’re dealing with? That way fewer surprises.
Re: How well should I screen buyers with bad credit? - Posted by Tony-VA
Posted by Tony-VA on May 23, 2000 at 09:07:54:
At the very least, have them run through the park manager’s application and credit check again. I will leave it up to you on what you decide from their. Each investor has his or her own risk tolerance. Certainly knowing what you are getting into is a good idea. Some park manager’s are more choosy than others and do a great deal of screening for you. Once you have a relationship established, you can usually get a feel from the park manager what type of risk you are getting into. If you have any doubts, run a credit check on them yourself and go from there.
Best Wishes,
Tony-VA