$8,000 TO INVEST, LOW CREDIT SCORE! NOW WHAT?

Two options to start:

1. FHA loan (have to live in the property first). 580 min credit score, 3.5% down. Buy a duplex or 4 plex and live in one of the units.

2. Look for owner financed deals since you have money to put down.

Good luck!

- Tom

Good advice, yea that is awesome, an awesome strategy, have the other renters pay your mortgage and still cashflow it's cool. Of course you could also wholesale in the meantime or at the same time while your doing Tom's strategy and build up your cash reserves so you have more to invest, to buy more homes. You have great income so that is super awesome. I use the word awesome too much.

I agree with Tony! Cause he's "awesome"!

Dean teaches us how to buy without using any of our own money. You have a good income, so why don't you use that and invest in biz cards, bandit signs and marketing materials?

Wholesaling or doing LOs are a great way to invest using no $$ and needing no credit. You will be amazed at how fast you may be able to start building cash.

There are a lot of specific guidelines that you must follow if you use your retirement acct to invest. If you decide to go that route, be sure that you are very familiar with those rules!

Best of luck!

Karen

Thanks DG Family for the respones, I will definitely consider some of these as options. One more thing, I have already done the FHA route back in 2008. I still have that condo as a rental. I think I will try the seller financing route more seriously and I will definitely post if I have any more questions. Although feel free if anyone has any additional advice!

Marcus

FYI - Any loans that will be sold to the secondary mortgage market (Fannie Mae and Freddie Mac) have a minimum loan amount of $50,000.

Also, it sounds like you will be getting the $8,000 from your retirement account - which you will need to pay back. If you are making $95k + and have low expenses, I would recommend setting 10% of your income aside to save for a down payment so that you do not have to borrow from your retirement account.

Going the land contract route is a great way to improve your credit, put very little money down and get an investment property. This would be my recommended route.

The last several properties that I have purchased as an investor, and my personal residence have all been done with 5% or less of the purchase price coming out of my pocket (usually 1 to 2%), and the rest was done using seller finance. No credit requirements, and very little cash. I do lease options regularly, but have also done other versions of seller finance.
My standard way of finding candidate properties is to call on rental properties, including single family and small multi-unit properties. I simply indicate that I am interested in the property, let them tell me about it, and then conclude by saying:
"Wow, this sounds like a great property, exactly what we are looking for. There is one important thing for me, and that is that we would also like to be able to purchase this property, maybe sometime in the future. Have you ever considered selling down the road?"

This is a non-pressure approach, and you will be surprise that there are a pretty large number of landlords out there, who, if someone came along, and made it easy for them to sell the property, will be willing to do so. There are only three possible responses to the question above--yes, no, or maybe. I go look at the Yes and Maybe responses, these owners are open to negotiation, and I will get some of these properties as lease options. Hope this helps. This little bit of information helped me climb out of a financial hole and become established as a real estate investor.