Improve Credit, Or Start Investing?

Question

Hello all! First post here!

I'm based in Canada, 31 years old and currently working as a Commercial Real Estate broker. Love the industry and now want to start building my "empire" of residential investment properties.

I'm not in the best financial situation:

- Credit card balances of $30K (I'm still recovering from the loss of a former business. No bankruptcy thankfully, just closed it)

- Poor credit score, at 612 - mainly due to these balances and lots of applications for credit over the past few years

- Own home, but not enough equity to refinance

Question is, should I take some time to improve my credit score, or start finding creative ways to finance my first deal?

We're actually recovering well from our former financial situation, and I cleared $100K in commercial deal commissions last year to pay down 50% of our balances. At one time we owed $80,000!

Anyway, just wondering where I should be focusing my efforts right now. Any advice appreciated!

Joseph Pietrzak · Answer

Reducing your credit card balance should also help to drastically increase your credit score. Your right at the  threshold as far as minimun score requirmnents. I would work on reducing the credit debt and watch your credit score go up as an effect of paying down the debt. After that you would have an easier time financing a deal.

Account Closed · Answer

@James Collins try to get a stable job that will pay up your debt and give the bank a reason to be confident in financing your future deals. in the real estate investing world, the idea of having a nine to five job is a complete nightmare. However, to get the ball rolling, it’s probably the best position to be in.

A: you’ll be able to pay your debt and build your credit back up.

B: the bank will feel a lot more confident in financing your deals, considering the fact that you have a reliable source of income for the bank to collect from.

Lastly, as motivation, gary vaynerchuck said that even at the age of thirty you still have your entire life ahead of you, so don’t overthink your current situation you’ll be just fine.