Can you really get started with no money and bad credit ?
Wholesaler · Bunnlevel, NC · Member since 2017 · 25 posts · 16 votes
Can you really get started with no money and bad credit ?
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Real Estate Agent · West Hills, CA · Member since 2016 · 43 posts · 26 votes
9y@Sharon Tippett I would find a legit investor(s) near you and see if you can work out a deal to find properties for them and receive a fee. That way you have a buyer and all you need to do is find the property. No risk on your side.
49 Replies
- Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes9yCody L. I think you missed my point. I love sales. I am in sales. Sales is the greatest job on earth. BUT no 7 year old kid says they want to be a "salesman" when they grow up. Sales people get a bad rap. I knew I wanted to be an entrepreneur my whole life. But I'm talking "sales" specifically is not typically what people strive to do. And more specifically when people watch the tv shows and think they want to get into real estate, I'd be very surprised to hear they all knew that sales and marketing were the key to this business. They think it's all about picking cute colors and designing nice kitchens. It's all about getting the deal, getting it closed, negotiating good work at a fair price and then closing the deal on the back end. (For a flip). If you wanted to be a sales guy since you were young, awesome. I'm just saying I didn't even realize sales were the key to business building until I was into my twenties yet I had been opening and running businesses since I was 7 delivering news papers. That was supposed to the point I was conveying. Not everyone is cut out for sales.
- Wholesaler · Bunnlevel, NC · Member since 2017 · 25 posts · 16 votes9y
I just want to clarify that I am NOT looking for someone to feel sorry for me, I am simply asking for advice.
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes9ySharon Tippett is your credit below 700? If I were you I'd get a side job and improve your credit.
- Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes9y
A person can get started and be successful with no money and no credit. I say go for it, lol. However, I would suggest that a person start from the true beginning. Figure out what caused you to be broke, with no credit, and why you were not able to stop this from happening. I say this because if a person does not fix the foundation, but learns to make money in REI, there is still a high probability, IMO, they could end up back broke if they are making the same money and life choices. Making money never meant you will keep it. Ask all of those ex-athletes who made millions but were not able to keep it.
- 9yMike CumbieBusiness MemberREALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
I don't think @Steve Vaughan was trying to insult you at all, he was trying to insult the guru courses that convince people they can invest with zero dollars and zero credit. The question begs what exactly are you investing? You could answer time, but that is not the investment because investing time for money is a job. Investing by it's very nature is:
1. expend money with the expectation of achieving a profit or material result by putting it into financial schemes, shares, or property, or by using it to develop a commercial venture
Investing is using money to grow money. By it's nature one can not invest with zero money. You can use someone else's money. However that requires some form of demonstration that you are a good risk (or the person is just charitable and wants to risk an investment on someone with out a track record.. credit). So you have to now convince someone to give you money so that you can invest it. You have to convince someone who has demonstrated a method to grow money, that you are a better risk vs reward for their money.
There is no shortage of people who will be willing to take your money. There are hundreds of courses that offer a newbie a chance for 10-45K. They convince new people to raise their credit cards and borrow from a 401K and beg mom for a 10K loan to teach how to make money with no money. So how do you make money with no money? Get people to give you money to learn how to make money with no money. They will tell you they are selective and not everyone qualifies, when in reality the only ones who do not qualify are the ones that cannot get their fee together in some manner.
If you didn't make any other changes but a part time job you could easily have 10K and better credit in a year. Then you would be asking how do I invest 10K. That we could have some honest lower risk answers for. Some advertising, some joint ventures, investing in someone else's flip. Then once you do one or two, you get other people to believe you can do it because you are trading experience for their money.
I know my answer is not the one you want to believe, but if you took that few hundred and got a license at least you would have something tangible and a group of people to go to. Someone is going to offer to sell you "yellow letter" and a "mailing list". I honestly wish you the best.
- Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes9yCaleb Heimsoth how would her getting a side job have any affect whatsoever on her credit score? That would help the No money half of the OP, but not the no credit part. People need to realize credit has NO relation to income whatsoever. The 2 are mutually exclusive. A credit score is an indication of how one uses credit and then pays that credit back. That is all. Income is NEVER a factor in your credit worthiness. Income will affect buying power, but never your credit score, ever. In fact here's an example of how the 2 have no correlation at all. You could earn $10,000 a year, have a 850 credit score and accumulate over a $100,000 in available credit to be used on credit cards or lines of credit. Conversely you could earn $1,000,000 a year, and have a 500 credit score and 0$ available on credit cards. If you use credit, and then pay it off, over time, your credit score gets better. Over time you can increase limits. Simple. Borrow , pay it back, repeat equals good credit. Borrow and fail to pay it back, no matter the amount, bad credit. If you use credit and miss even 1 payment, your credit score is negatively affected, no matter how much your earn or have in the bank. Or, if you have bills that's go unpaid like cable or electric or medical bills and they go to collections, that has a negative affect on you credit. I could write a book on how credit works but I'm sure it's been done before and the internet is free so google it. Everyone needs to know how credit works. Learn how your score is determined, and then you can use that to increase the score. It's a very simple concept if you just use it correctly, spend within your means, and ONLY borrow what you can pay back. My last point on credit is going to be credit is like bone, and it's broken right now, it can easily be fixed over time. You need to learn what put you there, get help, learn how to make it better, and give it time to heal. Time is the best thing that can happen to a late payment or a bankruptcy or foreclosure. Once enough time passes you can start all over again. Actually I lied one more thing I forgot to mention. NO credit is 100% different than BAD credit. They are like apples and monkeys. Not even in the same isle at the store. Bad credit needs to be repaired over time. NO credit is as good as good credit. its a fresh clean slate and once you learn how credit works you can EASILY and and for free, mean without paying anymore money out of pocket each month than you normally would, build up good credit within a few months, if not faster. Iv had clients purchase homes 60 days after we spoke for the 1st time and they had no credit the day we spoke. Iv also sold homes to buyers with 580 credit scores, so asking if it was under 700 didn't make much sense either. Anything over 600 is good in my book. Under that is bad. Over 700 is wonderful. Over 800 is perfect. Feel free to contact me directly with any questions relating to credit Iv rambled long enough. Hope this helps if but one person who was confused about credit being tied to income.
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes9y
@William C. it wouldn't affect her credit. You misunderstood what I was saying. I'm saying get a part time job to help with the no money part. The credit part is going to vary person to person
- Wholesaler · Bunnlevel, NC · Member since 2017 · 25 posts · 16 votes9y
@Mike Cumbie I understand what you are saying.
@Steve Vaughan If I misunderstood I am truly sorry. The wording seemed as though it was directed at me as if I were trying to get money because I am careless with my finances. I am trying to stay positive in a world that is full of negativity, I am a hard worker and I am not asking for someone to hand me my future on a silver platter. I know all to well that there are people out there that expect that. I am old enough that I have a 30 yr old and a 28 yr old. ( also a 9 yr old ). I was not raised to think you get something for nothing. It takes hard work. I want to build a brighter future for my family. I do believe that reading something and hearing it face to face something gets lost in translation. So again if I misunderstood I am Truly Sorry !
- Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes9y
@Caleb Heimsothi actually went back and reread your comment and realized that I probably misunderstood you, then my phone died before I could comment again and apologize. So with that said, I'm sorry, and my rant wasn't directed at you, but it is a common misconception so I hope it helps clear things up for anyone who thinks no money also must mean no credit. The 2 are different, and can be conversely related as I mentioned in my example of the millionaire with bad credit.
Your response is definitely the simpliest way to answer OP and put an end to this thread.
Get a job, and also fix your credit.
Fixed your post...smiley face emoji
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes9y
@William C. no worries! It's not always easy responding to these by phone. I'll definitely want to learn more about credit as I get older. I
- Wholesaler · Bunnlevel, NC · Member since 2017 · 25 posts · 16 votes9y
@William C. @Caleb Heimsoth I am working on my credit. The biggest problem with my credit was no credit. I had, and I did say HAD a 0 credit score. For the past 10 years I have not applied for any credit. I have taken out a loan and my credit has gone up from 0 to 573 in the past 3 months. I appreciate your advice.
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes9y
@Sharon Tippett yeah that'll do it. For me, I just have one main credit card that I make sure I pay off every month. That helps your score a lot (apparently) as I'm proof of that.
- Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes9y
How to get started with no money and bad credit:
- Figure out the root cause of why you have no money and bad credit.
- Attack the problem at its root.
- Save money.
- Fix your credit.
- Invest.
Please do not attempt to skip steps 1-4 ... the results will not likely to be positive.
- Real Estate Agent · Souderton, PA · Member since 2016 · 591 posts · 414 votes9yCaleb Heimsoth how old are you? I think you need to be 18 to get a credit card, but you may also be able start earlier as an authorized user on a parents card or account. It's never "too soon" to start building credit though once your turn 18. Like I said credit is built by using and repaying it on time. I always advise the first place to start is by getting a card where you normally get gas. They'll probably start you off with a $250-300 spending limit at first. That should be plenty. Simply use the card to buy your gas instead of s debit card like you normally would. Then pay the card off in full every month. Bingo, you have established a credit profile. The longer the card is open, and the more time that passes with you paying it ON TIME to ( preferably in full so you don't pay financing charges, but not required to keep building good credit. The on time part is the key. 1 late payment will set you back greatly. I can't stress this enough. Sharon Tippett credit scores do not go below 450. You either have "no credit profile" or a credit score based on your credit history. To be honest if you recently opened a card and have paid it on time, every time since it was opened, your score should not be that low. You need to pull a free credit report to make sure nothing is on their that is negatively affecting your score. It could be an old cable bill you never even knew about just siting in collections and pulling your score down. As I mentioned before, Iv had buyer clients come to me with zero accounts opened, and within 60 days they were qualified to buy a home with a credit score in the mid 600s. You'll also need different "types" of credit, but in an attempt to keep this short I'll summarize. Credit cards are one type, also known as revolving. Loans would be another type also know as installment, where the payment stays the same each month. The second major factor on your credit score aside from always paying on time is you need to build a large amount of available credit. This simply means the limit on the card. This does not mean you need to use the limit, nor should you unless you plan to pay it in full at the end of the month. The amount you use is not the important part. You can buy a pack of gum every month, and pay it off, and over time your score will increase. Lastly you want to keep the balances on your cards below 50% of the limits. This becomes easier as your limits are increased, or as you open more cards. Just use the cards in place of cash, and then use the cash to pay off the card. Do not substitute the card for cash if you do not have the cash to pay it off, or don't have income coming in that will pay it off at the ends of the month. As time passes, you can ask each credit card to increase the limit and as long as you have been paying on time, and have low or no balances, they will likely increase the limit. Iv seen clients accumulate $80,000 in credit limits, with zero balances, in about a years time. It's not hard, as long as you understand credit and how to use it to your advantage. I'll end with, make sure the cards are free, or small annual fees. Interest rate should be low, but it also shouldn't matter since we are paying them off in full each month anyway. Best of luck bringing that score up. My guess is there is an account in collections or you were late on a payment, otherwise the score would be higher. Maybe another time I'll get into how to rebuild credit once you've made some mistakes like missed payments.
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Cody L. too funny you mention the I don't want to be a salesmen.
I was brought up in a sales family.. top salesmen drove the nice cars.. the worker bee's well you know.
I always wanted sales.. my first job was selling FULLER brush door to door I made more in 3 hours than my piers made in a whole week of bagging groceries... got my RE license at 18 and was soon making 4 to 5k a month in commission and this was 1975 when that was some pretty big money.
I suggest anyone who wants or thinks they want to wholesaler or wheel and deal in real estate needs to along with learning the terminology they need to learn sales skills..
So go work for a car dealer.. they hire anyone.. they pay usually 2k or better a month to start so your at least eating.. and they are VERY Good at teaching you closing techniques.. which is what you need if your going to be a successful wheeler dealer in real estate.
Buying rental props once your going you don't necessary need those skills.. but they come into play even negotiating on your buys and sells.
I just don't think its realistic or REALITY at all for those that have no education other than reading on line no money no credit.. and NO REAL PEOPLE OR SALES SKILLS to do much of anything in real estate ever.
Are there exceptions for sure.. but that's what I have seen over the years.
ONe thing I like right now for those that are detail oriented.. and need to work from home.. Is to be a transaction coordinator for a real estate agencie.. My wife has one.. she handles multiple agents and companies.. does all the stuff us agents hate to do.. makes 250.00 a file and probably close 5 to 10 a week... not bad... and you really learn about transactions and how people do things.
save your money.. they think about being a wheeler dealer... .
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Steve Vaughan does working my Kurieg machine count as brewing my own coffee?
- Wholesaler · Bunnlevel, NC · Member since 2017 · 25 posts · 16 votes9y
@
William
@William C. I didn't think they did either until I checked mine on CreditNav.com. This was my score back in December 2016. I did takeout a small loan to rebuild my credit. I am getting it up slowly but surely. Now it is close to 600 being optimistic.
- Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes9y
@William C. I'm almost 23
- Wholesaler · Eau Claire, WI · Member since 2014 · 133 posts · 32 votes9y
One good way to find deals is with bandit signs. Although you may want to check with your local ordinances/laws. I found a good deal by putting up bandit signs "We buy houses CA$H" ... I have since stopped doing bandit signs as my City Inspector called me and very politely explained that the city don't want those "types" of signs put up. I just decided that I don't want to fight city hall. There are other ways to find deals.
We put up a LOT of bandit signs and finally a lady saw one of our signs and told her son about it, who was looking to sell.
Initially I was trying to wholesale the house and maybe i was trying to make too much money for my fee. Couldn't find any interested buyers, so ended up buying it for my own residence.
We bought the house over a year ago in February and today I am getting the 15 year term - refinance going to be able to exit the land contract.
This was all done with No Money Down and Poor Credit.
We offered a delayed down payment, which was to put a new roof on several months after buying the house, which we did put a metal roof on it last fall. (so maybe that would be considered money down, idk)
And credit was never looked at.
What was considered was during the several months I tried to wholesale his house, the owner and I had developed a relationship and trust.
One mistake I made: Was not telling the owner up front that I might buy it. All i told him was that i was going to find a buyer for him. So I would have been better off saying that either a buyer or myself would buy it.
Another potential mistake might have been, when doing a land contract, it would be good idea to see if the owner has a loan with the bank is a first time home buyer type loan. My owner did, but was past the 10 year period that allowed him to sell the house. At least that's what I've gathered from talking to the owner about it.
Forgive me if I have not wrote all the correct wording in here, as I'm not super at vocabulary. And also keep in mind that I have done a few deals (experience) prior to doing this deal/most recent deal.
Experience helps but if you don't have experience you can always try and bring people into the deal that have experience. Maybe you could have a general contractor look at the property for an estimate on repairs. How can you pay him? Maybe offer to recommend him to your buyer. Get creative.
One thing that I did was have a realtor come along and he took pictures of the place, when I first went to look at it (inspection). I also used a smart phone and went through at the same time as the realtor and video the walk through so that I could show my buyers pics and video.
Anyways, yeah... you will probably be looking for a needle in a haystack and have to go through a lot of marketing/time/leg work/etc to find a good deal. At least that's my experience.
Best to you!
Kel
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes9y
Originally posted by @Jay Hinrichs:
@Steve Vaughan does working my Kurieg machine count as brewing my own cocred
Sure, Jay. But only you. Thanks for making fun of me while I'm getting yelled at over here :)
Seriously though- credit scores either need to be 0 or really good. Either no debt history or a lot of it. 'Building it' takes time.
Please accept my apologies for any offense, Sharon. Nearly my stock answer for 'broke with bad credit' threads. Not judgement, just what I have done myself starting from nothing.
A seasoned person with no credit score is rare, indeed. I didn't see that coming at all!
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Steve Vaughan good credit is just one of the pieces of the puzzle. you can have good credit but if you don't have the income to go along with it.. not going to do you any good in the real estate game.
buying a car yes.. getting consumer debt sure... but not with underwriting in todays day and age.
- Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes9y
Originally posted by @Jay Hinrichs:
@Steve Vaughan good credit is just one of the pieces of the puzzle. you can have good credit but if you don't have the income to go along with it.. not going to do you any good in the real estate game.
buying a car yes.. getting consumer debt sure... but not with underwriting in todays day and age.
The good ole "Three C's" that lenders want to see:
- Character
- Capacity
- Collateral
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