How to get financing without tanking credit?

[Benjamin Spaulding]

I am curious to know how people are able to finance multiple deals in quick succession. That is, people doing one and two deals per month. I just closed on my first property, and have already spotted another that makes sense. The only issue is I would have to restructure some debt. How could I do this without sending my credit below 700? Can I use a previous hard pull for a new loan within 90 days? 

[Erik W.]

@Benjamin Spaulding, hi and welcome.

First, let's be clear on the affect of a hard pull on your credit: a few points.  Maybe 5...10 points?  Even 20 would not be enough to sink your score.  Also, the effect wears off after a couple of months.

If you're using the same lender, they probably won't hit you with a pull every single time.  The local bank I've used for refinancing deals only hits me once per year.

Financing....there's more to it than banks.  Think about private money: doctors, lawyers, successful small business owners, mid-level Corp managers, farmers, etc.  Folks who have $$$ in the bank but don't really trust the stock market and don't want the hassle of owning rentals.  You work out an equity and/or profit sharing deal with them.  I've seen folks buy up 10-20 or so properties over 12 months using private money, then do one large loan per year to secure full ownership and pay back their investors.

Lease-options allow you to control property without borrowing a dime.  Same as the idea in the last paragraph, but one loan per year to close out all your option contract purchases.

Then there's subject-to, which I'm not a fan of, but some use.  Look at it and see if it's for you.

Good luck.

[Tom S.]

@Benjamin Spaulding  A credit pull usually only drops my score 4-6 points and it will rebound by the next month. So if I pulled again next month, I would still be about the same range.

[Andrew Postell]

@Benjamin Spaulding the posts above are right on but I would add that you should be working with a lender that uses rental income right away to help you qualify.  Assuming you are keeping these properties.  If you aren't keeping them, then a normal lender that is accustom to lending to flippers should have a good process for lending on multiple deals to the same person.  If you are keeping them, then you should look BETTER with each property...that is, as long as that lender is using that rental income to help you qualify.  Make sure they are and you will be able to do multiple transactions at a time.  Hope this helps!