Opportunity for 50k loan but need 680 credit
Real Estate Agent · East Orange, NJ · Member since 2019 · 56 posts · 42 votes
I got an opportunity for (approx) a 50k personal loan from someone, their underwriters want to see a 680 FICO score and they will disregard income. I'm still building my credit at the moment so my score definitely isn't there. But getting this 50k would ultimately be a game-changer for me as a Newbie REI, I've tried reaching out to others to co-sign for me and everyone's credit seems to be in a not so "good place" at the moment. Should I just let this opportunity go and continue to fix my credit and try again another time...or am I just not seeing the other side of the rainbow
Hi @Miltiana Holdip.
Here's a different perspective: Unless you already have a rock-solid plan for using this loan to make money, I don't see this as an "opportunity" at all. Taking on $50K in personal debt makes your financial situation worse, not better!
My recommendation is that you maintain focus on your ability to recognize (and eventually construct) actual money-making deals. That is what makes you an investor, not how much debt you are holding.
Hi @Miltiana Holdip.
Here's a different perspective: Unless you already have a rock-solid plan for using this loan to make money, I don't see this as an "opportunity" at all. Taking on $50K in personal debt makes your financial situation worse, not better!
My recommendation is that you maintain focus on your ability to recognize (and eventually construct) actual money-making deals. That is what makes you an investor, not how much debt you are holding.
Hi @Miltiana Holdip.
Here's a different perspective: Unless you already have a rock-solid plan for using this loan to make money, I don't see this as an "opportunity" at all. Taking on $50K in personal debt makes your financial situation worse, not better!
My recommendation is that you maintain focus on your ability to recognize (and eventually construct) actual money-making deals. That is what makes you an investor, not how much debt you are holding.
Thank you for the response, I actually have two plans that I can use the 50k for (putting down on a rental property in Louisiana where my JV partner lives and has a property management company or corporate rentals for AirBNB). Also, I see you're in ATL, I've been longing to move to ATL since I was in high school visiting there on college trips, and until this day the vibrancy and opportunities continue to grow! You definitely will see me down there, I am speaking into existence!
But you're absolutely right, I just try to look at everything from all angles to make sure I am NOT passing up an opportunity.
A few things that helped my husband and I used to increase our scores quickly were self-lender, line of credit at Conn’s with a small purchase, and we opened new credit cards. Feel free to inbox me with any questions. We’re preparing for our first deal soon. Good luck with everything!
@Miltiana Holdip Mitch is absolutely right as far as stating that a 50k personal loan is more of a risk rather then an opportunity. Not to mention the interest rate you'd have is most likely between 5% and 15%, and probably on the higher end of things because your credit is not on the GREAT side of things. This interest rate can be a real cash flow killer in any deal you invest in.
Its better to start taking steps to better your credit (obtain credit cards that you pay off) and then continue searching for RE deals. And if you truly find a one of a kind RE deal, then you should not have a problem getting a partner to join in on the gains.
@Steven Wilson
Thank you very much and you’re right I completely forgot about the interest rates killing cash flow 🤦🏾♀️ that’s exactly why I always put my question out there for those more knowledgeable to critic them. I’ll definitely wait it out there’s always a good deal out there
@Lareshea Anderson
I’ll definitely look into that! I can feel 2020 being my year
I'm not sure I understand what your question is. It looks like you could get a $50k loan if your credit score is over 680. But it isn't. So if your question is "should I get this loan?" it isn't much of a question, because you don't qualify. Right?
If your question is how to improve your credit score so you can get the loan, it depends on where you're at now. What's your credit score? If you need a 10-50 point boost, there are a number of things you can do to increase your credit score, although usually not in the matter of days or weeks. If you need a 300 point boost I don't think you'll have much luck in the short term. Having unsecured debt limits increased is a good start (ask for the credit card companies to increase your credit limit), and keeping your balance below 30% of the credit limit is also a key start. Beyond that, you can look at credit card piggybacking. I know some people who it's worked for. Or try challenging a few of the bad things on your report if you have some reason why it should be removed. Some may come off, which helps.
But generally I agree with @Mitch Messer. If you don't qualify, I wouldn't try and make the situation worse by getting a personal loan, unless you have a REAL investment opportunity at your finger tips.
Good morning! I can virtually assure you there will always be someone with money who wants to lend it out. Take the time to stabilize your base. Pay off personal debt, rebuild credit, establish relationships with those that can assist you/partner with you when your credit is repaired. I finished grad school with $25K in credit card debt and it was very tough to pay off. Fortunately, someone very wise helped me with a smart plan and it worked.
Ideally, once you have some more experience you'll have the knowledge of how to leverage a 50K loan into a solid investment.
Good luck!
@Miltiana Holdip in my opinion if the score isn’t ready, you’re not ready. Your score is a reflection of yourself not something else looking at you. I destroyed my score. The lowest score I viewed on me was a 460 on Equifax. I couldn’t get a loan for anything and if a loan was approved the interest was thieve worthy. In only 3 years I’ve turned it around completely. My score is in the 700s and rising. I’ve obtained my first home loan with $0 down and I’ve also been approved for other loans with low interest and I’ve gained access to larger lines of credit with lower interest on those as well. In this process I’ve learned a lot of “tricks” about money and understand the whole of financing and lending better. My advice is down jump the gun. If your score shows your not ready I believe that the odds of you taking a “good deal” and then regretting it later are far greater. It may feel like the slow track but a “fast track” that ends in a crash is not as good as a slower track that actually ends in success. I understand you. It’s frustrating to wait so long and your tired of this old lifestyle and your ready for the brighter future.
You probably won’t listen to me but emotion is what’s making this “act now” feeling so strong. Time, growth, and understanding (and SACRIFICE) will result in earning what you want and you behave differently with has been granted to you. You will behave better and it will serve you. I’m speaking from experience with fast choices that cause devastation and slow work that results in eternal wisdom. That will benefit you for the rest of your life. I’m in my current home because I had to act and acting is SOOOOOOOOO important. But it was preceded by years of learning and correction.
Just my opinion/ advice.
I recommend checking out a credit repair forum for detailed advice on repairing your credit situation. Something as simple as paying a single credit card from 91% utilization to 67% can have a 50+ improvement on your score.
@Miltiana Holdip in my opinion if the score isn’t ready, you’re not ready. Your score is a reflection of yourself not something else looking at you. I destroyed my score. The lowest score I viewed on me was a 460 on Equifax. I couldn’t get a loan for anything and if a loan was approved the interest was thieve worthy. In only 3 years I’ve turned it around completely. My score is in the 700s and rising. I’ve obtained my first home loan with $0 down and I’ve also been approved for other loans with low interest and I’ve gained access to larger lines of credit with lower interest on those as well. In this process I’ve learned a lot of “tricks” about money and understand the whole of financing and lending better. My advice is down jump the gun. If your score shows your not ready I believe that the odds of you taking a “good deal” and then regretting it later are far greater. It may feel like the slow track but a “fast track” that ends in a crash is not as good as a slower track that actually ends in success. I understand you. It’s frustrating to wait so long and your tired of this old lifestyle and your ready for the brighter future.
You probably won’t listen to me but emotion is what’s making this “act now” feeling so strong. Time, growth, and understanding (and SACRIFICE) will result in earning what you want and you behave differently with has been granted to you. You will behave better and it will serve you. I’m speaking from experience with fast choices that cause devastation and slow work that results in eternal wisdom. That will benefit you for the rest of your life. I’m in my current home because I had to act and acting is SOOOOOOOOO important. But it was preceded by years of learning and correction.
Just my opinion/ advice.
I completely understand where you are coming from. I am not in a rush to do anything to regret it later. If everyone with and without experience is saying it's not a smart move long term then I will just fix my credit up and save over time then just get a loan with great interest in the future. Thank you, for your words of wisdom and honesty
I was in a much worse situation about 7 years ago. If you plan on having some type of future with real estate you should fix your credit now rather than later. Or this will follow you for the rest of your life. You can absolutely do it and don't pay for someone to repair it as that's a huge waste of money. If I can do it anyone can. At one point I couldn't even get a loan with a cosigner. I went from the low 500s to over 800.
Start by pulling your free credit report at annual credit report.com Make sure you go through each line item on your report as it's not always 100% accurate. Anything that is wrong you will want to dispute. My sister had her identity stolen and it took 9 months to sort everything out.
Anything in collections you will want to get those current. Sometimes they will even settle for less than owed.
Keep your credit card balances low. The more you have maxed out the more of a hit your score will take.
Pay your credit cards on time every month.
Those 4 things right there will make up the majority of your score.
Any questions feel free to reach out.
@Miltiana Holdip I bought the board game CASHFLOW by the “Rich Dad” Company. The idea behind this approx$80 game is that it lets you buy and sell investment properties with fake money so you can get the experience of investing without the real life consequences. I failed and went bankrupt the first 15x I played!!!! And that’s not an exaggeration!! That’s 15x of real life failure I got to bypass. I knew sooooooo much less than I thought I did. When I purchased the game I thought the $80 was expensive. Looking back it probably saved me years of headache and financial failure. Some of the best $80 I’ve ever invested in myself. When I purchased my first home I took on way less risk and approached it far more knowledgeably than I would have otherwise. It’s my first real property and only time will tell if it’s a successful investment or not but at least my understanding of risk was truly comprehensive due to artificial experience I got to obtain. It’s the #1 investing game above Monopoly and showed me how truly ignorant I was while eliminating some of that ignorance. Good luck out there.
Sidenote I don’t work for and am not affiliated with Rich Dad company just had a truly beneficial experience via their product.
@Miltiana Holdip I bought the board game CASHFLOW by the “Rich Dad” Company. The idea behind this approx$80 game is that it lets you buy and sell investment properties with fake money so you can get the experience of investing without the real life consequences. I failed and went bankrupt the first 15x I played!!!! And that’s not an exaggeration!! That’s 15x of real life failure I got to bypass. I knew sooooooo much less than I thought I did. When I purchased the game I thought the $80 was expensive. Looking back it probably saved me years of headache and financial failure. Some of the best $80 I’ve ever invested in myself. When I purchased my first home I took on way less risk and approached it far more knowledgeably than I would have otherwise. It’s my first real property and only time will tell if it’s a successful investment or not but at least my understanding of risk was truly comprehensive due to artificial experience I got to obtain. It’s the #1 investing game above Monopoly and showed me how truly ignorant I was while eliminating some of that ignorance. Good luck out there.
Sidenote I don’t work for and am not affiliated with Rich Dad company just had a truly beneficial experience via their product.
Oh wow I always heard about Monoply but no one ever discussed the game CASHFLOW. I think I will put it on my Christmas list this year to learn a thing or two before the New Year starts.
@Miltiana Holdip, you mentioned a you'd use the money toward a rental in Louisiana. I'd be happy to help you evaluate it. If it really is a 'deal', I may even fund it. If it's a great deal, it should be gone by now. Remember, even if you can't close on it, someone else might be willing to make it worth your time to pass it on. You're welcome to call me.