Re: I Just Want To Get Started - Posted by JT (CA)
Posted by JT (CA) on April 22, 2002 at 10:53:20:
Seems like we got stuck on the same boat. I did the same thing apparently, got stuck in paralysis analysis for a couple of years before diving in.
Anyway, I would highly suggest starting off with your credit. You might want to apply for several credit cards, being that you will get turned down outright. I did this as well because I had bad credit a year ago. I applied for several credit cards to be able to get my credit report for free, tsk, tsk. You might be familiar with those letters that the credit card company is turning you down and says that if you have incorrect information, contact Equifax, or Trans Union, then do so, and get a free credit report. Applied knowledge is power. It wouldn’t hurt, worse case scenario, they’ll approve you for a new credit card right, then you apply to a different company? Another way would be to just get a credit report outright. You’re entitled to get a free report once a year. A sample letter is in one of the archives on this site written by Bill Bronchick.
If you have incorrect or old information on your report (over 7 years) that’s derogatory, have the reporting agency remove it. Or, if it’s old information (over 5 years), have them investigate it. I had several of my past delinquents removed/change to positive status when I did so. Not having great credit should not prevent you from investing in real estate, but it sure is a great feeling to know that everyone can trust you with money, or you know where you stand creditwise, that’s the first step in financial independence, isn’t it? Also, you can have better negotiating power with banks and conventional lenders if you have great credit. Especially since you’re getting into rentals, where you might go to a bank and use the process of OPM.
Getting to your question regarding a Land Contract, yes, you can flip on contract. You might want to look into the tax ramifications of flipping though in your particular state, since, in my state, California, if you’re a dealer, you’re subject to hefty taxes since you collect profit quickly on inventory, and the state treats every property as inventory if you’re a flipper, not subject to depreciation, etc., etc.
Look through the archives on this site and you’ll learn much about doing your deals if you have questions.
All the best!