How to finance next deal.

Question

I closed on a house a month ago. Paid cash. How do I get funds to buy another property if my credit isn't that good and I have little capital?

Jay B. · Answer

ok. Thanks guys, I really appreciate your input.

Eric Delcol · Answer

Hey Jay,

You have three options:

1) Fix your credit, once your score is above 700 refinance the property  - this will take time, perhaps years.

2) Finance your property through a lender that will only look at the property's financials and lend based on it's value opposed to your credit score.  There is a company that's affiliate with bigger pockets that does this - I can't recall the name though..

3) Get a home equity line of credit (HELOC) from your traditional lender.  A HELOC is probably the easiest of the three and you can finance up to 80% of the value of your property.

Brad Smith · Answer

@Jay B.

Hi Jay,

If you own a prop free and clear, there are plenty of HML that will potentially give you working capital for your next project.  You will need to substantiate the following:

1. Credit score

2. Value

3. Lease

4. Cash needed

5. Assets

6. Tax filing status (maybe)

Jay B. · Answer

How do I use my cash flow from my fully owned rental to fix my credit.

Bryan O. · Answer

Hi @Jay B. Welcome to BP! There are GAZILLIONS of posts all about that type of thing. Give the search bar a shot and you'll be on your way.

If your credit is crap I would use your cash flow from your fully owned rental to fix it! If you can't control your finances banks do not want to be your friend and you lose out on some of the best options that exist today. If you have access to private money, they can create a mortgage on that property and finance it.

No matter what strategy you end up with, get your credit fixed. It's not just for bank financing. It's a reflection on your capability as a person.

Best of luck and happy investing!