Starting out with odds against me

11 Replies

Hey everyone I'm a newbie and don't really know anything about real estate except for the few articles that I've read and the ultimate beginners guide on the site. I'm really interested in getting into investing but haven't got a clue how to start and having the feeling of the odds being stacked against me. I've move to a new place for work in Alberta, Edmonton and don't really know anyone but was able to pay off all my debt. Thing is I have a really poor credit score and don't know of any family having money to lend to even start on looking at homes or anything. I've started saving but I don't think it will help if my credit score is shot. So I guess my question would be can I work around my credit score and still get something like sellers financing or should I just try to repair my credit score and how do I go about doing that. I'm interested in multifamily homes and the buy and hold strategy if that would help with the situation. Thanks in advance everyone 

Having poor credit or no money doesn't prevent people from doing investing.  Learn more about subject tos (but not sure you can do in Canada because of the laws), Lease Options and other seller financing.  This site has a ton of good information and people who will continue to keep you on track and learning.  Once you get the cash and credit up you will have even more options.Welcome to the world of investing! 

@Scott Allaire you do not need a great credit score to start doing real estate. You can start off by wholesaling, which is getting a property under contract and then flipping the contract for a fee. You never actually purchase the property so there is no need for a bank. However, if you wish to make a career in real estate and actually invest (wholesaling is a sales job) then you must do everything in your power to repair your credit. Banks are going to be one of your best partners in the industry and without a credit score, good luck. 

Try getting your personal finances together, a good job and save for a down payment. If you can house hack a multi you can get paid to live somewhere and use the money you save from not paying rent to build up another down payment. Rinse and repeat. I am sure there will be road bumps but that just comes with the territory. 

Yeah i was thinking that my job is decent pay and I've been saving I think my only issue is my credit atm to do so. I'll go check with my bank and see what i could do about that without going crazy in debt for something. Thanks you so much for taking time to reply to my question 

Scott, welcome to BP. I’m a newbie as well. If you haven’t already, IMO your #1 objective at this time is to address the personal behavior and events that led to your credit score. Those behavioral issues and decisions won’t solely go away via RE investing. In fact, if not “righted” your situation could easily worsen.

My hope is you’ve already addressed those concerns. Even then, we rarely remain objective in our own assessment when the issue is so close and emotional to us (drugs, alcohol, money, etc.).

I recommend consulting a trusted friend or family member that can give you honest, objective feedback without “guilting” you through all your poor decisions.

If you don’t have that type of person in your life, seek a financial mentor with REI experience (bonus if you can meet with in-person) and lay all of your cards out on the line. By being honest, objective, and humble, you stand a good chance of getting worthwhile advice.

If you’ve done all that already, good job and great advice will continue to come from others on BP. Take some time to tour the forums, you’ll find a plethora of others in your situation that have received great advice.

Best Regards

Yeah thanks a lot I've changed a lot about myself, my credit score was ruined by my young dumber self but i have corrected it and trying to move forward and never backwards lol thanks again 

Check out the mr mustache interview on the first podcast or follow the advice on his website. Also consider moving to a lower cost jurisdiction while you don’t have a family.

@Scott Allaire Although you have received great advice, most of it is American focused. Wholesaling is not going to be feasible in Edmonton (laws, size of market, etc). As everyone else has mentioned, you should start rebuilding your credit history ASAP. Your first step should be to request a copy of your credit report and start seeing where the easiest improvements are. 

With the new lending laws in Canada, it will be harder for you to buy into an investment property. But with the AB market being sideways, you might be able to score some deals. My friends have had the best experience with ATB as the other major banks have become too stringent (I would still hit them up though).  

For the next 9-12 months, I would focus on rebuilding my credit history, maxing out your RSP (you can withdraw $25K through the Home Buyer Program) and TFSA (TFSA is going to be your way of building tax-free wealth), and educating yourself. 

Garth Turner write a great blog: . I would also recommend to better understand your overall investing options in Canada (not just RE). 

I'm an ex-Calgarian living in Texas and advise my Canadian friends on how real estate investing and financial matters. PM me and we can start a conversation.

If your debt is paid off, credit shouldn't be a huge issue. 

If your credit is so bad your bank won't give you a CC or LOC, try Capital One or MBNA. They're pretty easy.

Having 2 active lines of credit being paid on time should get you where you need to be fast. Also what I do that helps my scatter brain is automate minimum payments to all LOCs or CCs in my name, that way at the very least the minimum gets paid if you're side tracked and forget.