Starting off with bad credit?

6 Replies

Looking for advice on how to get started in multifamily, with not so good credit. I currently have almost a 600 credit score and was shot down on an FHA loan, minimum is a 620-640.

I am looking for any help with quick ways to build credit, or at alternative to doing an FHA loan?

@Derek White

alternative

. Cash
. Hard Money Lender
. Friends or Family Members Credit

Credit Fix
. Pay off some debt
. 6-12 months on time payments
. Challenge erroneous info on credit
. Pay off any judgements

@Derek White are you in a position to put down a slightly larger down payment? For example, with the FHA loan you mentioned, the credit requirements scale downwards as the down payment amount scales upwards. Maybe you can work with a mortgage broker to figure out a happy middle ground. I haven't looked into it for awhile, but I was under the impression FHAs requirements were 580 for 3.5% down. I would also recommend working with another mortgage broker that is willing to fight for you and get the loan approved.

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Good news, we put everything on hold for 3 months paid a credit repair place that was A+ on BBB and took care of some small debts.  We are now pre-approved for $367k for a quadplex.  Appreciate the help, advice, and encouragement.  Cheers to starting this investment journey ;)

@Derek White I think the better question would be, How can I change my habits to raise my credit score. You can get real estate with bad credit, but it is not something that is a sustainable business model. Pay bills on time, lower credit card balances, and delete any 3rd party collections on your report. Then shop around for your financing options.