Pay off all Credit Card Debt Before First REI Deal?

92 Replies

Hi everyone! I'm new to the forums and to REI. I haven't done my first deal yet. Actually, my husband and I nearly bought a place earlier this year. That place fell through at the last minute, but although I was hugely disappointed at the time, in hindsight, it wasn't a great deal for us, I learned a lot and the whole experience got me inspired to start looking into real estate investing.

My husband and I have a small amount of savings - around $25k, which is enough to buy a rental property - but we also have credit card debt of about $19k. That sucks and I'm not proud of it - but I'm so proud of how far we've come. Two years ago we were drowning in over $40k of CC debt, I was just coming out of being laid off, and I was regularly worried sick about what we were going to do to survice. So I feel really proud of our efforts to pay it down. We have worked hard and hustled, and now finally we moving into positive net worth territory even with the credit card debt after years of having a negative net worth. 

Anyway, one of the reasons our potential house deal fell through earlier this year was because of the credit card debt. I'm now in a position where I could pay it all off in one fell swoop - but it would wipe out most of our savings and we'd have to start rebuilding them before we would again be in a position to invest in a rental property. 

I have a few options. I could pay off some of the debt and hang on to more of our cash reserves, which I could use to start investing. I could keep paying a large amount each month to the card companies (I have payment deals with them so interest is low). I could take some money out of my 401k and lend it to myself to put towards the debt. OR I could pay it all off in one fell swoop, start rebuilding my reserves firstly by paying myself what I was paying the credit card companies. 

What would you do if you were me? All advice welcome! 

Welcome to the forums. My two cents: Pay off your CC debt. Don't invest large sums of money in ANYTHING until your personal finances are solid.

Other than mortgages, I don't like debt, but that's me.  I would pay it down and then invest.  The debt will limit how much you can borrow.  Plus do the math at how much interest you are paying on that debt (ie the real cost of the $19K CC debt) at the current rate you are paying it down.  Use that as motivation to pay off the debt and then start saving for your first property.

@Melanie Johnson what is the interest rate on the credit card debt? My guess is it is 18% or higher. Paying off CC dept has the same affect on your net worth as investing money at the same rate.

Lets say you credit card charges 18% interest. Paying it down is like investing your money at an 18% rate. Where else are you going to get that kind of return? Most importantly you are earning that rate with NO RISK. Actually you are reducing your financial risk by reducing your dept. If you take the same money and invest it in something else you will always have some risk.

I might not pay it all off and have zero reserves but I would certainly accelerate the pay down of debt. 

Credit cards modify your debt to income ratio. If you go past 40 percent you will significantly limit your financing options. Pay those things off. 

@Melanie Johnson

Welcome to the BP Forums! If I were in your shoes, I'd lean towards aggressively paying off the credit card debt and THEN saving for the real estate investment.

I personally saved enough to cover half of a years worth of personal expenses and enough for a property (a downpayment, expected repairs, and closing costs) before purchasing my first investment property. Each situation is different, but CC debt gives me chills and there are so many upsides to paying down that kind of debt.

Either way, best of luck in your financial journey!

Best wishes,

Eric Sipe

@Melanie Johnson I paid off $18,000 of CC debt before I began investing. It was my second go round, this time I learned my lesson. Previously I had paid off $40,000 in CC debt. Granted I’d always had the money to pay the CC off with but then would have had no reserves.

Now I pay my debt each month and use my CC for certain things and cash for others.

I'd recommend paying off the CC debt and then rebuilding the cash for the down payment. You can always find a partner, get an FHA loan and house hack, depending on where you're located buy a duplex that's not too expensive and the 25% down on an investment property isn't that great, etc.

Best of Luck!

Investing in real estate is an amazing way to build lasting wealth and you obviously have been working hard to pay that debt off. First of all, way to go! With that said, the less reserves you have the riskier real estate becomes. When analyzing deals, setting aside a certain percentage for expenses, CapEx and vacancy will set you up to build an appropriate level of reserves. However, this will take time to build and just because we budget monthly doesn't mean that's how the expenses come. What if you incur a large expense soon after acquiring the property? What if a tenant leaves and it sits empty for several months? Reserves and cash flow keep us in the game with an investment property. Credit card debt could potentially inhibit your ability to remain in the rental game. Investing from a place of strength is what you should aim for.

From your numbers it looks like in the last two years you have paid off $21k of debt and have saved $25k totaling $46k in two years. I would pay that debt off and save like you have been (or more now that your not making the CC payment) and you’d have $29k to invest in a year ($6k remaining savings, plus $23k this next year)! Then you can feel good about investing from a place of safety and strength. Good luck!

@Melanie Johnson congrats on coming so far!! How do you feel about the way you manage tour personal finances? If you have disciplined habits and are committed to not going into consumer debt, I’d recommend buying a cash flowing asset that pays for your liabilities. So buy a rental where the cash flow pays your CC payment every month. Once the debt is paid down, the asset will continue to pay you throughout your life. In the meantime the tenant is paying down the loan, building you equity and you get the depreciation tax benefit. Good luck!

I agree with the pay-down-the-debt strategy.....however, just to play Devil's Advocate for a second.....if you could get into a property that had great cash flow, you could pay down that debt even faster....

Melanie,

Congrats on making massive progress toward financial freedom. Blast that debt ASAP! You will sleep so well that first night. Just remember the difference between good debt (assets) and bad debt (consumer debit often used for instant gratification). Dave Ramsey has some great books regarding living debt free and budgeting. Also, if you haven't already, read Rich Dad, Poor Dad and tune into his podcast. Good stuff here, I'm excited for you and your husbands investing future!

Hope this helps,

Tim

normally i lean towards investing but credit cards have very high interest. always look at it in terms of what makes you more money. paying off the credit card debt is atleast 17% if not into the 30% interest. that means to break even you need to make atleast what you credit card debt interest is. that will be hard. pay off the debt use the money to save up faster and buy once you save back up. i would say the one way i would invest if you are going to house hack then you can probably justify it by saying you no longer have to pay rent or mortgage. 

Agree with all about paying the CC debt first.  Just want to add another benefit of that route that has been eluded to, but not said outright.  CASH FLOW.  That's King to any of this and yours will be increased greatly once the CC isn't taking it from you.

@Melanie Johnson I would pay off your CC debt before you start investing. I’d have to imagine it’s a high interest rate ~15-20%, so for investing to make sense you’d have to find a deal that is outperforming that. Not having CC debt will make financing easier also

Since you pay your credit card interest with after tax dollars, paying them off should give you the benefit of an approximate 23% tax free yield equivalent that is 100% safe. I know of no other such investment. Why undertake a real estate deal that requires your participation for a yield that, if you are super fortunate and diligent, would likely return half of that yield? With risk, I might add. Both market value and tenant risk and even possible Covid collection issues should moratoriums on eviction continue or reoccur.

A complete no brainer. Debt first, investments second.

Respectfully,

Gary

You don't meet a lot of self-made high-net-worth individuals in the $1-5 M range who made their money while carrying significant credit card debt. You just don't. You meet people who did it while carrying a lot of business debt, sure. But not personal debt, and especially not credit card debt.

Im house hacking with an FHA loan. 2-flat building, making it a legal 3 flat in the near future.

I had ~$13,000 in a auto loan and my mortgage lender had me pay that off and that went toward my closing cost. I had gotten like $10,000 in credits and my closing cost was like $7,000. Lender wouldn't let have  the house unless i paid the car off. i gave the title company a check made out to Ford for $13,000 and that 13k shows up as closing cost on the paper work.

I'm just saying maybe you don't have to pay it off. I would talk to a bunch of lenders and maybe you can try to replicate what happened in my situation. 

Don't pay the credit card debt because with a half-smart investment your profits will exceed your credit card interest many many times.

Example. I wrote this story about 9 months ago and I just wrote it again last night, or was that at 3 am this morning.

Almost exactly 5 years ago, one of my employees (no greed card and no social security number). Did you just turn green with anger? Oooops! Well...he has a valid TIN number and he has been paying an immigration attorney for several years. If you want to speak with him he has absolutely no accent and you would never guess he is Hispanic by talking to him. Regardless, 

So much for that! I give this guy a lot of credit. Five years ago, he put $20,000 on a $108,000 house in Apple Valley California. His cashflow is $500 per month after all expenses. Today, the house is worth $300,000. So, how much did he make?

He earned $40,000 per year from appreciation plus 5 x $6000 per year for cashflow = $$46,000 per year for 5 years, or a total of $236,000.

That comes out to 236% PER YEAR on his money. Your credit card is not costing you 236% per year.

So...yesterday, my half-legal almost legal employee asked my to wire $50,000 to his old stomping grounds in El Salvador, the Murder Capital of the World.  About 30 days ago, he put a $50,000 house in escrow and he wired the money to El Salvador, yesterday. As in the old days in California, his house appreciated in value in one month to $85,000 and his broker in El Salvador is actually trying to get him to sell the house.

So...here is a guy who makes very little money (about $2300 per week) and he made $265,000 in 5 years.

Now... (I love my 3 dots). It is my doctor-prescribed narcotics affecting me. I never thought I would turn into a drug addict at the age of 71.

My construction company does some seriously expensive jobs for cities, the Los Angeles airport and hotels and I have some employees who earn $4,000 to $5,000 every week. How much real estate do they own. Zip! Zero! Nothing, but the dumps they live in.

Every single day of the week, I say I would love to be a fly on the wall in some of my employee's homes. I seriously don't understand how a man (all my employees are men except my part-time secretary who spend 99%of her work day talking to her mother and 13-year old child on the phone) can spend an average take-home pay of $2800 and not have own one nice thing.

Still, the very best place to invest is in California and there are areas like Victorville and Apple Valley where prices are equal to or less than many other states. The most important thing for earning money in real estate is APPRECIATION and NOT RENTAL INCOME as shown in the example above.

The next most critical thing is SMART INVESTORS (not so many who get this) need to purchase properties where they can DOUBLE their investment capital every 1 to 2 years. That means you keep your money in your smoking-hot little pocket until you find a property where you can earn 50% to 100% on your investment capital (money) every 1 to 2 years.

Sure!!! This may sound difficult, but it is actually very simple. First, you cannot do this and will not do this if you do not make this your business model.

THE BIG HOW!!! You look and hundred of properties. You look for properties that are undervalued, properties you can fix up and increase the value and you do the math 10,000 time over and over and over and over and eventually you will be so smart rather than asking questions you will be a real estate guru charging for your services. You will be telling brokers to take their advice and shove it and to go fry ice.

So...if you have $20,000 to invest and you purchase a property worth $120,000 for $100,000, then you earn 100% on your money (the simple math) the day you close escrow. You did not even have to wait 1 year to earn 100%.

If you purchase the a $100k property worth $100k and it increases in value to $120k in 1 year you earned 100% on your money in 1 year. If it takes 2 years to increase to $120k you earned 50% on your money every year.

SIMPLE!

The hard part! Never listen to a broker's advice. They will tell you that every house they have for sale is great for you. Never listen to any person's advice. If you need to ask for advice keep your money in your hot little pocket.

CALIFORNIA! This is the best place in the world to invest. People get filthy rich, accidentally, and that cannot happen in most parts of the country.

You dont have 25K savings. You have 6K savings. Pay off the CC today. And never run a balance on them again. Without financial discipline your investing will never be successful anyway.

Originally posted by @Jack Orthman :

Don't pay the credit card debt because with a half-smart investment your profits will exceed your credit card interest many many times.

Example. I wrote this story about 9 months ago and I just wrote it again last night, or was that at 3 am this morning.

Almost exactly 5 years ago, one of my employees (no greed card and no social security number). Did you just turn green with anger? Oooops! Well...he has a valid TIN number and he has been paying an immigration attorney for several years. If you want to speak with him he has absolutely no accent and you would never guess he is Hispanic by talking to him. Regardless, 

So much for that! I give this guy a lot of credit. Five years ago, he put $20,000 on a $108,000 house in Apple Valley California. His cashflow is $500 per month after all expenses. Today, the house is worth $300,000. So, how much did he make?

He earned $40,000 per year from appreciation plus 5 x $6000 per year for cashflow = $$46,000 per year for 5 years, or a total of $236,000.

That comes out to 236% PER YEAR on his money. Your credit card is not costing you 236% per year.

So...yesterday, my half-legal almost legal employee asked my to wire $50,000 to his old stomping grounds in El Salvador, the Murder Capital of the World.  About 30 days ago, he put a $50,000 house in escrow and he wired the money to El Salvador, yesterday. As in the old days in California, his house appreciated in value in one month to $85,000 and his broker in El Salvador is actually trying to get him to sell the house.

So...here is a guy who makes very little money (about $2300 per week) and he made $265,000 in 5 years.

Now... (I love my 3 dots). It is my doctor-prescribed narcotics affecting me. I never thought I would turn into a drug addict at the age of 71.

My construction company does some seriously expensive jobs for cities, the Los Angeles airport and hotels and I have some employees who earn $4,000 to $5,000 every week. How much real estate do they own. Zip! Zero! Nothing, but the dumps they live in.

Every single day of the week, I say I would love to be a fly on the wall in some of my employee's homes. I seriously don't understand how a man (all my employees are men except my part-time secretary who spend 99%of her work day talking to her mother and 13-year old child on the phone) can spend an average take-home pay of $2800 and not have own one nice thing.

Still, the very best place to invest is in California and there are areas like Victorville and Apple Valley where prices are equal to or less than many other states. The most important thing for earning money in real estate is APPRECIATION and NOT RENTAL INCOME as shown in the example above.

The next most critical thing is SMART INVESTORS (not so many who get this) need to purchase properties where they can DOUBLE their investment capital every 1 to 2 years. That means you keep your money in your smoking-hot little pocket until you find a property where you can earn 50% to 100% on your investment capital (money) every 1 to 2 years.

Sure!!! This may sound difficult, but it is actually very simple. First, you cannot do this and will not do this if you do not make this your business model.

THE BIG HOW!!! You look and hundred of properties. You look for properties that are undervalued, properties you can fix up and increase the value and you do the math 10,000 time over and over and over and over and eventually you will be so smart rather than asking questions you will be a real estate guru charging for your services. You will be telling brokers to take their advice and shove it and to go fry ice.

So...if you have $20,000 to invest and you purchase a property worth $120,000 for $100,000, then you earn 100% on your money (the simple math) the day you close escrow. You did not even have to wait 1 year to earn 100%.

If you purchase the a $100k property worth $100k and it increases in value to $120k in 1 year you earned 100% on your money in 1 year. If it takes 2 years to increase to $120k you earned 50% on your money every year.

SIMPLE!

The hard part! Never listen to a broker's advice. They will tell you that every house they have for sale is great for you. Never listen to any person's advice. If you need to ask for advice keep your money in your hot little pocket.

CALIFORNIA! This is the best place in the world to invest. People get filthy rich, accidentally, and that cannot happen in most parts of the country.

 Jack,

Agree to disagree. Certainly a great story for your immigrant friend, and a testament to what a great nation we have.

Unfortunately a California investor could just as easily end up with a non paying tenant who can't be legally evicted or even a seller who refuses to vacate after closing or any other myriad of horror stories that permeate California, and suffer a devastating loss on a first investment. While appreciation in California can be outstanding, so can a buy and hold investor's nightmares.

Respectfully,

Gary

@Melanie Johnson

First, congrats on climbing out of the financial hole you dug yourself into.

Now you have a choice: investing risk free at a double digit return-that’s paying off CC Debt- and thereafter investing in RE from a position of strength. Or adding risk to your financial situation and keeping a sinking hole in your cash flow.

Plus, how much real estate debt do you think you’ll be able to get while having this much personal debt? Finally, paying down CC debt will have your FICO score shoot up and you’ll be able to replace those $19k of life draining debt with as much or more wealth building real estate financing.

No brainer in my book.

Originally posted by @Gary L Wallman :
Originally posted by @Jack Orthman:

Don't pay the credit card debt because with a half-smart investment your profits will exceed your credit card interest many many times.

Example. I wrote this story about 9 months ago and I just wrote it again last night, or was that at 3 am this morning.

Almost exactly 5 years ago, one of my employees (no greed card and no social security number). Did you just turn green with anger? Oooops! Well...he has a valid TIN number and he has been paying an immigration attorney for several years. If you want to speak with him he has absolutely no accent and you would never guess he is Hispanic by talking to him. Regardless, 

So much for that! I give this guy a lot of credit. Five years ago, he put $20,000 on a $108,000 house in Apple Valley California. His cashflow is $500 per month after all expenses. Today, the house is worth $300,000. So, how much did he make?

He earned $40,000 per year from appreciation plus 5 x $6000 per year for cashflow = $$46,000 per year for 5 years, or a total of $236,000.

That comes out to 236% PER YEAR on his money. Your credit card is not costing you 236% per year.

So...yesterday, my half-legal almost legal employee asked my to wire $50,000 to his old stomping grounds in El Salvador, the Murder Capital of the World.  About 30 days ago, he put a $50,000 house in escrow and he wired the money to El Salvador, yesterday. As in the old days in California, his house appreciated in value in one month to $85,000 and his broker in El Salvador is actually trying to get him to sell the house.

So...here is a guy who makes very little money (about $2300 per week) and he made $265,000 in 5 years.

Now... (I love my 3 dots). It is my doctor-prescribed narcotics affecting me. I never thought I would turn into a drug addict at the age of 71.

My construction company does some seriously expensive jobs for cities, the Los Angeles airport and hotels and I have some employees who earn $4,000 to $5,000 every week. How much real estate do they own. Zip! Zero! Nothing, but the dumps they live in.

Every single day of the week, I say I would love to be a fly on the wall in some of my employee's homes. I seriously don't understand how a man (all my employees are men except my part-time secretary who spend 99%of her work day talking to her mother and 13-year old child on the phone) can spend an average take-home pay of $2800 and not have own one nice thing.

Still, the very best place to invest is in California and there are areas like Victorville and Apple Valley where prices are equal to or less than many other states. The most important thing for earning money in real estate is APPRECIATION and NOT RENTAL INCOME as shown in the example above.

The next most critical thing is SMART INVESTORS (not so many who get this) need to purchase properties where they can DOUBLE their investment capital every 1 to 2 years. That means you keep your money in your smoking-hot little pocket until you find a property where you can earn 50% to 100% on your investment capital (money) every 1 to 2 years.

Sure!!! This may sound difficult, but it is actually very simple. First, you cannot do this and will not do this if you do not make this your business model.

THE BIG HOW!!! You look and hundred of properties. You look for properties that are undervalued, properties you can fix up and increase the value and you do the math 10,000 time over and over and over and over and eventually you will be so smart rather than asking questions you will be a real estate guru charging for your services. You will be telling brokers to take their advice and shove it and to go fry ice.

So...if you have $20,000 to invest and you purchase a property worth $120,000 for $100,000, then you earn 100% on your money (the simple math) the day you close escrow. You did not even have to wait 1 year to earn 100%.

If you purchase the a $100k property worth $100k and it increases in value to $120k in 1 year you earned 100% on your money in 1 year. If it takes 2 years to increase to $120k you earned 50% on your money every year.

SIMPLE!

The hard part! Never listen to a broker's advice. They will tell you that every house they have for sale is great for you. Never listen to any person's advice. If you need to ask for advice keep your money in your hot little pocket.

CALIFORNIA! This is the best place in the world to invest. People get filthy rich, accidentally, and that cannot happen in most parts of the country.

 Jack,

Agree to disagree. Certainly a great story for your immigrant friend, and a testament to what a great nation we have.

Unfortunately a California investor could just as easily end up with a non paying tenant who can't be legally evicted or even a seller who refuses to vacate after closing or any other myriad of horror stories that permeate California, and suffer a devastating loss on a first investment. While appreciation in California can be outstanding, so can a buy and hold investor's nightmares.

Respectfully,

Gary

I'm too lazy (tired and delirious) to read what I wrote, but I usually mention that real estate investors don't make their money from collecting rents. 

This is the wrong business model to have. When I was young my goal (business model) was to purchase 10 homes, have the tenants help pay the mortgage and then I could retire and live off the rents. THAT IS THE WRONG WAY TO INVEST! If a person buys and holds to live off the rents then when the investor retired the income he earns hardly keeps up with inflation and he still has to own and maintain the properties until he is in his death bed and beyond.

The correct correct and best business model is to purchase properties that appreciate the most. Then, the investor earns almost exponential profits and when retirement time comes he (or some shes) can sell the properties and retire with millions of dollars in their accounts.

As for your saying a landlord in California can get a tenant from hell who can't be evicted, I never heard of such a thing. In many of my posts I wrote that we (my wife and I) own several large apartment buildings and since 2001 I think we had to take 3 tenants to court. I'm getting too old and can't remember the exact number, but the very most money we paid an attorney to get a tenant out and the longest time it took to get a Sheriff to lock a tenant out was 7 weeks and those are terrific numbers. I own properties in Massachusetts, Colorado, Idaho, Las Vegas and the only state I have trouble with tenant evictions is Massachusetts where it has taken almost one year to get the court to get the tenant out of a rental unit and all of those tenants did not pay one penny of rent during the eviction time, but not in any other state that I own property in.

I'm betting that Ohio is not such a tenant friendly state when you evict a tenant and the court does not want to put the tenant on the street in the cold wind and snow. In Las Vegas, I never personally had to evict a tenant, but I think the court will put the tenant on the street within 3 days of their not paying their rent. I am not positive, but I was told that several times.

There are  only a few very important things most investors don't have they are very critical. They need a good business model and good philosophies to help guide them so they don't get washed out when problems arise. If you don't believe something can be don and you don't set those sights in your business model then it won't happen. For philosophies, I've been in real estate for 55+ years and I've learned philosophies that help me get through the bumps in the road. 

The other most important thing investors don't do is they don't do the math properly before investing in properties and they don't stretch out the numbers 1, 5, 10, 20 and 30 years to calculate their projections to determine their profits base on rent increases and appreciation.

The next most important thing most investors don't do is they don't have a clue regarding how much more money they can make owning multi-unit properties where their profits are almost exponential for when the owners increase rents and the rent increases automatically increase the value of the properties almost exponentially as in the chart below. The sad thing is; investors can purchase 4-unit properties for not a lot more that the cost for one single family home.

Example. I told myself back in 2001 that I would never ever let a tenant get me emotional nor upset. So, in 2001 I purchased a 28-unit apartment building. I brought in a bulldozer and Bobcat with a jackhammer on it and we removed front stairs to the building, swimming pool and all about 10,000 square feet of concrete for the courtyard and huge driveway. We ripped of the entire front of the building, evicted tenant in 4 units and gutted the units to the 2 x 4's.

Near end of my story! A tenant came out of his apartment yelling and screaming about the mess and he spit in my face in front of my wife and an employee. Rather than getting emotional like most people would have, I literally laughed and asked him when he was going to move even though I never evicted him. My wife and employee was surprised and kept asking why I did not get emotional and I said that I made the promise to myself that I never would

My employee is doing the exact right thing getting into a property for only $20,000 that he knows will appreciate as much as it did. He did the investment with a purely positive attitude and never questioned his self one time because even though California has the highest cost for doing business it is still and will always be the state where experienced investors are positive that property values will increase. Sure, we get dips in the market, but when you buy properties at the right price those dips are only temporary. To clarify that statement, the investors with the wrong business model purchase the wrong properties when they pay purchase properties that have the potential to decrease significantly when the market dips like back in 2008 to 2010 and those investors lost money ONLY BECAUSE their mortgages were upside down, they panicked and let the banks foreclose and take over their properties. REALLY STUPID THING TO DO when you own properties in California because even though the market price dipped the tenants were still paying their rents and then the property prices recovered. Really stupid and why??? Because they did not understand how to invest in real estate BECAUSE THEY DID NOT HAVE A BUSINESS MODEL to adhere to.

Originally posted by @Jacques Herve :

@Melanie Johnson

First, congrats on climbing out of the financial hole you dug yourself into.

Now you have a choice: investing risk free at a double digit return-that’s paying off CC Debt- and thereafter investing in RE from a position of strength. Or adding risk to your financial situation and keeping a sinking hole in your cash flow.

Plus, how much real estate debt do you think you’ll be able to get while having this much personal debt? Finally, paying down CC debt will have your FICO score shoot up and you’ll be able to replace those $19k of life draining debt with as much or more wealth building real estate financing.

No brainer in my book.

Your post does not make sense and it bothers me. Especially, since you are a real estate agent.

As mentioned in many of my posts, I don't understand why people are worried about their credit card rating. That raises the hair on the back of my neck.

Did you miss the point that my employee is sort of illegal (not really illegal) because we really do deduct taxes from his paychecks and he files taxes every year through his TIN number, but that is what the story is not about.

What the story is about is THIS DUDE DOES NOT EVEN HAVE A FICO score. HE HAS ZERO CREDIT FOR ANYTHING and he still earned through real estate investing $236,000 on 5 years.

Here is another story I told about 50 times on BP. This story is about a 20-year old girl from Japan who ran away from her home in Japan because her parents kept beating her and beating children in Japan is not frowned upon by their court system.

So, this 20-year old single girl arrives in the United States with zero money. IN ONLY 7 YEARS, this girl never got a driver's license, never got a job with the exception of babysitting and in 7 years she owned 18 high end condos and homes and I estimated that if she cashed out she was worth $2.3 million. AND...a few years after she owned 18 homes, she called me a few times and asked me to give her a ride to Victorville California (120 miles from Los Angeles) because she wanted me to take her to a home she purchased (19th home) and she told me she purchased a home in Las Vegas for $550,000 (her 20th home).

HOW DID SHE DO THIS? She did babysitting, earned $7,000 and purchase a co-op in Los Angeles with another Japanese girl. They rented the co-op to several Japanese college students and she made a wad of cash. Her Japanese partner went back to Japan and this girl bought her portion of the co-op.

Then, this young and very tiny and cute little Japanese girl took the cash she made from the co-op and she purchases a high end condo in Torrance California (a fairly high end city with zero ghettos neighborhoods). This condo was about 2 miles from a city college that is infested with Japanese students. This girl rented the condo to Japanese students and put two students in every room in the house, in the laundry room, in closets in the washing machine room and in the garage. This girl made so much money she was able to purchase a brand new home about 2,000 feet from the city college and she bought home after home and she has more brass and grit than any man I ever met.

My point for this story. SHE NEVER NEEDED A CREDIT SCORE TO BE SUCCESSFUL.

So, here is the greatest thing I literally love about this girl. She is very sexy and cute even from seeing her from her backside when I was driving my plumbing van one day. So, being the type who sees her walking down the street, I pulled over and asked if she wanted a ride. She said she was going to pay a utility bill at the utility's office about 10 miles away. I offered he a ride and she said she was going to take a bus. I asked why she didn't put the bill in the mail and she said she wanted to save the 49 cent stamp, the bus did not cost her extra because she had an annual pass and riding in the bus gave her time to read a book about real estate investing.

I found the Japanese girl to be very inspiring. Here I am working my butt off to invest in real estate. I earn tons of cash to invest with and this girl never had a job and was making more money that I was in a proportional way when considering that my investment capital was earned by working and her investment capital was earned only through money earned from her renting to college students.

POINT TO MY STORY IS...this girl did not have have cash and did not have credit nor a FICO score when she started investing.