No one with good enough credit

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No one with good enough credit

Luke H.
Real Estate Investor · Dallas, TX · Member since 2013 · 388 posts · 174 votes

Hello all, hope all is well. This rental has been on the market for 15 days and after 48 leads no one has qualified. Due to no one having 600+ credit score. 

There is a married couple, with 2 kids that claim they have (570 credit score), that their credit issues are over 5 years old, both are holding jobs for over 3 years, with enough income to cover rent, and they are willing to provide a co-signer.

Should I just continue to wait for the application that qualifies completely or should I look into this one more? 
I've never had a co-signer before and don't know how that all works out. (some experts have said to no do that since it leads to other legal issues.)

I'm wondering what your experiences have been?

I don't like to leave my house sitting empty, I'm camping out there so it doesn't look empty and that is getting tough on me. Wish I could find an old car to park there...

Thanks for listening, your advice is appreciated!

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y

I think @BOB CRANEY hit the nail on the head  its the area .. my folks i deal with in these areas.. fico is not a criteria.. its 

do they pay their cell on time.. are they felons.... you have to triage the bad credit or sell the house. 

600 up probably does not want to live in that area.  I suspect thats whats happening.

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  • Jean Witty
    San Francisco, CA · Member since 2018 · 10 posts · 4 votes
    8y

    By now I hope you have found a tenant for your property. Like others have mentioned I would go mostly off of income, eviction, and background history for your area. Digging deeper into their credit history will give you a good idea as to why their credit is low. Doubling your deposit is a good idea to add security in the deal. If you want to verify 12 months of their income and bank assets you should consider using a platform called FinRET, they can also provide you with $5 credit reports. At the end of the day, you need to try to find the best tenant for your area and having good credit is not common there. 

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  • Michael Lee
    Investor · Coppell, TX · Member since 2008 · 2k+ posts · 646 votes
    8y

    I think that Jean gave you a good message. Tenant screening is very important to your long term success. With rental units you will survive better with apartments and not SFH's. The typical SFH will cost you more to turn it over and be rentable. Using a cap rate gives you better expense return on a apartment complex than a SFH when you have add-value expenses which will earn you more money than on a SFH. Needing experience to buy apartments is a myth. Remember that even if you have to borrow money the previous owner will typically be paid in full at the closing. The only difference is the speed of closing. You are in a good place that can provide you with opportunities. You may to compete harder to excel. Also remember that this has been done for a long time so when you start out just do what is average for that area. Most people have only tried to borrow from A Bank is typically where most try to borrow and it can be difficult for many to borrow from regardless of their ability to pay the loan. I heard from a person in San Antonio that had 25 rent homes and almost went broke because of turnover expenses and then he decided to loan to good people was the best way to go and now he is a millionaire by doing lease options with a higher non-refundable down payment, the spread between the rental amount and the debt amount, and the option that is not usually taken but if the do the option you can make money on their purchase. With the proper screening this is really no more risky than buying investment property. Best wishes!

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