How To Get Into Real Estate Investing With No Credit

How To Get Into Real Estate Investing With No Credit

Joe: Hey, it’s Joe. How do I get into real estate investing with no credit? All right, so, let’s say you’re like me. 1991. My whole business fell apart. Crashed. Went in to the toilet. I lost everything. Filed bankruptcy. Trashed my credit. Lots of mortgages got foreclosed upon. It took me several years to pull out of that. I’ve got perfect credit now, but it took me years to get back on track and get through that process. And it was painful and ugly and awful.

Joe: Let’s say you’ve got terrible credit. Or, let’s say you don’t have much income. Or maybe the income you have is not verifiable. Maybe you’ve got other types of income or maybe you’ve got a business of your own where you need to have three years of income before you can go out and get a loan. You can still buy property. You don’t have to have good credit. You don’t have to use any of these techniques.

Joe: There’s a story that I like to tell. Sam Walton who built Wal-Mart, has filed bankruptcy three times in his life before he built Wal-Mart. That means that there’s no way he was going to get a loan to build Wal-Mart. He had to do that in other ways. So, I don’t know exactly how he pulled it off, but I know that he didn’t go to a bank and say, “Hey, I’ve got good credit. Let me do this.” No, they’re going to look at him and say, “No, you went bankrupt three times. We’re not going to give you any more money.”

Joe: He used to say, “I don’t trust anybody who hasn’t gone bankrupt at least three times.” I think that’s excessive. I did it once, I’m never going to do it again if I can – you know, knock on wood – if I can avoid it. If you do things right, if you set things up properly, if you don’t leverage yourself out in the wrong ways, you’ll never have to worry about screwing up your credit.

Joe: But if you have credit that’s already screwed up, you don’t have refrain from doing real estate investing. There’s still lots of ways to do it. And all of the zero down structure techniques that I teach work. I’ve explained them on lots of other videos, so I’m not going give you a whole list of them here. But I’m just going to give you one of those. Buy a property on land contract in a rural area, or in a urban area, where you can get properties under $100K. Go in there and find a property that’s a great deal that the seller owns free and clear already and have them allow you to make payments on it.

Joe: Let’s say you’ve got a $40K property. Three-bedroom house that rents for $750 a month. This is very common in all these types of areas. I’ve bought them in both urban areas, in a lot of different states, and in rural areas. And you can buy this property, you’re going to take a number like, $750, say, okay, that’s the maximum income I’m going to get on that property. I want to make sure I have at least $200 of positive cash flow and I’m going to have $200 that I need for taxes and insurance. That’s $450 off that $750, that leaves me $300 a month. So I take that $300 and tell the seller, “I’ve got $300 a month. I can make payments on this property of $40K until it’s paid off.” And I’ll just make these $300 a month payments until it’s paid off.

Joe: So I divide $300 into $40K and I get X amount of months, I’m not sure if that’s five years or seven years, but, you can do the math. And it’ll pay off in that period of time. And then that property is free and clear. And every dollar that I spend paying them is going towards my principal. You know, if you buy a $100K mortgage, or you get a Subject To property, and you have $100K mortgage on it that’s got thirty years on it, about $100 a month is going towards principal out of that $1,000 payment that you’re making, or $800 a month that you’re making.

Joe: So, very tiny percentage goes towards it when you use a bank. But if you use the seller as the bank, everything changes and now all this money is going toward equity and you’re return on investment goes way, way, way up, even though you don’t really have any money in it in the fist place.

Joe: Anyway, so that’s one technique that you can use for credit. If you learn the zero down structure hierarchy that I teach, it’ll give you all the different ways that you can buy properties with zero down. You can learn those from me in my mentor program on the PushButtonAutomarketer.com, you can learn them on my blog. I’ve got some books on Amazon you can check out. So, check out some of the resources. And sign up for my newsletter – it’s free! JoeCrumpBlog.com, just go to that website and sign up for any of the forms there and it’ll put you on my newsletter.

Joe: All right. If you like this video, hit the Subscribe button. Click on the bell and it’ll send you notifications every time I put out a new video. All right – good luck to you.