Credit or Capital...Which one is more important?

Question

I have read books, watched videos, attended webinars and so forth. There is one question that keeps coming to mind. What is more important when starting as an investor. Is it credit or capital? Or are they both equal. I am interested to hear from everyone and what they think.

I have heard countless times that I can start "investing" with no money and no/bad credit. Although there are some amazing success stories out there I do not think that is the typical way people get started. I think it takes either cash or credit to kick things off.

I am very interested in becoming an investor, however I do not have the money to do so and I do not have a 720+ credit score.

Looking forward to feedback.

Derek Woods · Answer

It may have been a month or so.  As it was my underwriter that helped me with the task.

Asha Johnson · Answer

How long from the time you repaired your credit to a 620 did you get your home loan?

Derek Woods · Answer

I was in the same scenario last yr.  first thing I did was started working on my credit and contacting lenders.  I found a local lender that was easy to work with and they allowed me a minimum of 620 credit score to get their in house ARM.  At that point I had the credit issue straightened out.

Next, Cash. For their product I needed 10% down plus closing etc.  I owned my Harley outright, so I secured the loan against it. Deposited the cash into their bank.

Now for the property.  I looked for a property that I could cover the down payment and closing with my secured cash.

Hindsight, I would have asked the seller to pay closing and raised the purchase price some.

This put me in a cash flowing property with low credit and capital.  This is an option most people can/could pull off if they tried.