Heres my situation, I am 25 years old living in Bayonne, New Jersey and I want to get started in real estate ASAP!!!. I have funds available but I have an issue with my credit score. Its pretty low but iv been working on it for the past 5 months and on top of that I have been working with a credit expert to help me get my score back up. Like i mentioned, I have funds available ready to purchase an investment property (preferably a fixer) but I know I wont get approval from a bank when its time to refinance the property after I get it all fixed up. I am planning to only implement the BRRRR strategy on all my investment purchases.
@Tarek Emam You should consider joint venturing with someone who may be able to provide their credit so this will be a non issue for you. Investors with minimal to no experience even with good credit will pay a tremendous amount for access to hard money for deals.
Thanks for the reply Jospeh ! Im not quite understanding why a no experience investor would need access to hard money if I only need their credit if i were to joint venture with them?
@Tarek Emam if you are planning on using the BRRRR strategy how are you financing the property? You are likely to use hard money unless you have all the cash outlay for both rehab and purchase price. Hard Money will lend you the rehab costs and portion of purchase price but if you have minimal to no experience those rates will be higher. 12-14% with 2-3 points, the draw fees potentially etc..
If you joint venture with someone who has experience those #s can change drastically.
@Tarek Emam what’s the time frame for getting the credit where you need to be to qualify for loan?
My man Shawn, haven’t forgot about you. I would honestly say a year or a year and a half max to see my credit where i want it to be (680-740) but I dont want to wait that time period. Would love to get started way sooner than that.
@Tarek Emam got it. Before closing on the deal that ultimately set us up on the track to financial independence I spent a about a year to a year and half researching, going to meet ups, finding like minded people. I was in a similar spot where we had to wait. Turn the negative into a positive and worked out well… FYI shoot me a text, we are announcing big NJ REI meet up coming this July!
This made absolute sense, thank you Joseph.
@Tarek Emam . Good day! I'm a real estate investor and a licensed real estate agent in Bayonne, NJ. I'm not sure how much you have saved up, but some words of advice since i'm from the area.. Try looking at investments outside of NJ. I invest in the midwest.. you save tons of money and it's a great starting point. The taxes are lower, the repair costs are lower, and the rents are pretty good if you consider ROI. If your looking to JV let me know.. I'd be willing to discuss things further or just give advice.
You're not ready...it's not about buying real estate or flipping or anything else. It's about starting and running a business. To have the credibility to get deals done and to prove that you keep financial commitments, you need to continue doing what you've been doing. You'll be able to hit the ground running much faster and have financing and trade options.
Stay the course. You're closer than you think.
Hey @Tarek Emam what areas are you looking to BRRRR in?