Should I take action or wait

4 Replies

Hi BP,
I'm new to real estate investing but have been reading a lot of BP articles, listening to BP podcasts, networking and learning my market. My credit score is around 545 so I'm still working on that. I just started a well paying job but don't have any money saved yet. My uncle has really good credit and can help re-finance if needed.

I want to start off with one rental property by the end of this year. I feel ready to take action but not sure if this is the right time. My plan so far is as follow:

-Find a property (50k or less) with good cash flow
-Use hard money lender to finance the property.
-Rent out the property
-Refinance the property in 6-12 months

My fear is not being able to refinance due to my credit.

Should i wait until my credit score improves while saving capital or can this still be done if I find the right property and hard money lender?

What else am I missing or should consider?

Thank you in advance

do you have a plan to force your credit score up? imho, implementing one and working it is much better than sitting around letting time pass and hoping that it will get better as recorded bad debt ages. my coin.



Hi Mary,

Thank you for your advice. Yes I do have a plan. I just got a well paying job and I'm paying off my credit card debt and student loans. I should be done paying off all my credit card debt around June 2018

-Find a property (50k or less) with good cash flow (Do you have realty in your market meeting this requirement?)  - You could get an FHA loan with 1.75% down payment instead of using a hard money lender... 

-Use hard money lender to finance the property. (What is the interest rate? Do the numbers make sense?) 
-Rent out the property ( What does the NOI look like?) 
-Refinance the property in 6-12 months

Hi Joshua, 

Thank you for your advice. 

-yes, i have an agent in my market sending me properties that meet this criteria. I thought about the FHA loan but will definitely look into it more.

- A friend referred a few lenders but the interest rates were too high so Im still looking for one where the numbers make more sense. like 85% LTV, 10% or less interest.

- Im familiar with calculating monthly and annual cash flow. If you don't mind, can you tell me the difference between cash flow and Net Operating Income and why its important? 

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