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Daniel Mohnkern
  • Investor
  • Titusville, PA
150
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298
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Have good credit OR get a discount?

Daniel Mohnkern
  • Investor
  • Titusville, PA
Posted Mar 3 2015, 14:15

Fellow BP'ers, I need some advice on which direction I should go from here.  

For the past year I have been kicking it in high gear in my personal finances by building up my credit in order to get conventional loans on my upcoming investment properties.  I have managed to bring my credit score up from 640 to 780 and can see it soon being over 800 with just a little more work.

Having thoroughly enjoyed my time here at bigger pockets thus far, I have been getting excited and encouraged to build up my portfolio more.  Well, last month my wife had to have surgery and now we have "been served" the $20,000 hospital bill with a due date on the bill of this month (no insurance).

As I see it, I have a couple options:

1.  Organize a payment plan with the hospital only to have them sell it to a factoring company(collection agency) in order to get half of their money sooner than what I would be paying them.  

Outcome:  Dinged credit which will either keep me from loans or bring higher interest rates.

2.  Use some of my equity (2nd mortgage) to pay off the bills quickly.

Outcome:  Less dinged credit, but now I would have to pay interest on top of the debt AND I would have used the equity that I could have used to purchase another property.

3.  Negotiate a write-off of half the bill with the hospital and pay cash for the remaining balance with my money I have saved for a down payment.

Outcome:  I could still have dinged credit because of the write-off AND my cash is now gone.

Does anyone have any suggestions or ideas to minimize my "cons"?  Any advice would be very much appreciated.  I want to do the wisest thing that will not negatively affect my prospects for deal funding in the near future.

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