Investing With Bad Credit


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One of the biggest roadblocks to starting a business is being blocked by bad credit. This video shows you how to start a real estate investing business with bad credit. Using these zero down structures, bad credit will not stop you from investing in real estate.

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Investing With Bad Credit

Joe: Hey, it’s Joe. The title of this vide is “Investing With Bad Credit.” And I’m going to tell you a little story about my experience with bad credit.

Joe: Back in 1991, the S&L crisis came about, I was investing in California, living there. I had a $17M business. We were building big houses up in the Hollywood Hills. I was flipping properties. I was buying in San Bernardino and Lancaster and all over the place where I lived. And I built and leveraged a big business using banks. Using bank loans. Huge mistake. I had good credit at the time. I had all my money sunk into these properties. I was completely leveraged out. I didn’t have much reserve and then the crisis came.

Joe: The values in California on these properties, and these were $600K, $700K, $800K, $900K, $1.5M properties. They were big properties. And the values dropped by 20% on those properties. And I only had maybe 20% equity in those properties based on the cost to build versus what we were going to sell them for.

Joe: And the lenders came to me and said you’ve got to bring more money in. Otherwise, we’re going to stop your construction loans. And I didn’t have the money. So, they stopped my construction loans. And they started to foreclose on my properties and everything in my business collapsed. I lost everything. And I had to go through bankruptcy and it was humiliating, it was painful. I would never wish this on anyone.

Joe: And it affected my self image, I moved back to Indiana and moved in with my parents. I was thirty-five years old at the time. I moved in with my parents again, and my wife, and we had a new baby. I wasn’t thirty-five- I was twenty-seven – I don’t know – I don’t know how old I was. But, this is 1991.

Joe: Anyway, it was painful and it was humiliating. And I’d never wish it on anybody. And one of the goals that I’ve had as a real estate teacher is to make sure this never happens to any of my students, if they listen to what I say, and going through this process of trying to fix their credit. But I’ve had so many people that have come to me and come through my mentor program and said, Joe, I sure wish I had talked to you before I made that investment, or I did it that way, or I took out that loan, or I did those other things. And a lot of people over the years have made mistakes and they’ve lost everything and they’ve come to me and said I’ve complete trashed my credit. I’ve lost everything. My wife left me – you know, all this stuff. A lot worse stories than what happened to me.

Joe: I was lucky when I had a support system. I had a wife that stuck with me. God knows why. I had parents that helped us out and I had a brother who gave me a car because my cars got foreclosed upon. So I had a support system that made a difference.

Joe: And I went to work as a real estate agent. That’s when I started as an agent. And I had to learn all over again how this stuff works. And I was feeling sorry for myself until I was able to – and I know that some of you go through the same situation – you start feeling sorry for yourself and you start feeling, like, oh, woe is me, you know, just this huge pity party.

Joe: And you’ve got to get over that. And the way you get over it is you take your eyes off yourself and all the problems that you have and all the stresses that you have and all the worries that you have trying to, for me it was trying to support a new baby, trying to get back on our feet out in our own place again. Trying to get all that stuff going again. And I took my eyes off myself and I decided I’m just going to focus on them. I’m going to focus on the client, the seller, the buyer, you know, the people that need my help.

Joe: And if I can change my focus and I can try to solve their problems instead of my problem, I know I’ll make money because the things that I’m doing for them are things that will make me money. And if you use the structures and all the training and the teaching that I do, it’ll help you be able to use structures that actually solve problems for people and be able to take your eyes off yourself so that you can help them solve the problem.

Joe: Now, it’s not going to require you to have credit. It’s not going to require you to have cash. You’re gong to do it completely through seller financing. And there’s lots of different kinds of seller financing and I’ve talked about them in the other videos, subject to, multi-mortgage, land contract/contract for deed, assignable cash deals and lease option. These are the zero down structure hierarchy that you need to understand and you’ll need to learn. And you can learn it from these other videos that I’ve given you.

Joe: Bad credit does not mean you’re a bad person. You are not your credit score. I was still a good person. I still was an honorable man and I still wanted to take care of my family and I was still loved by the people that love me. And, you know, you’re in that same boat maybe right now and it’s okay – that will pass.

Joe: I remember going to try and buy a car with my bad credit. And I went to the car dealership and they looked at my credit and said you can’t buy a car from us. And they humiliated me even further. And this car dealer is still in my town. I drive by them pretty frequently. And every time I drive by them I sneer. Because I would have bought cars from them if they had taken care of me. If they had looked at me as a human and looked at the income that I had coming, because I was starting to make money as an agent at the time when I went to try to get a loan.

Joe: If they had looked at me as a human I would have done business with them forever. I would have been loyal to them and worked with them forever. But they lost my business because they treated me like dirt. And I know that other people are doing the same thing to you when you try to go rent a property, when you go try to buy a car. When you try to go get a credit card. When you try to go get a mortgage for a property. They’re going to look at you and they’re going to try to make you feel small.

Joe: But, whether you were responsible for the mistakes that you made or whether they happened to you doesn’t really matter. What matters is that you try to solve the problem. And that you learn to do it without requiring somebody else to give you approval. You know, you don’t need somebody else’s approval if you use the structures that I do. You give yourself the approval. You say, hey, here’s what I can do for you. Here’s how I can solve the problem, when you’re talking to a seller, when you’re talking to a buyer.

Joe: And they want to solve their problem and so they’ll be willing to work with you because you have credibility because of the way you talk and the knowledge that you have and the way that you’re structuring the deals. It no longer matters that you have a 300 credit score, or whatever terrible credit score you might have at this point. That stuff doesn’t matter. Eventually, you’re going to want to work on that credit score and you’re going to want to improve it. And I’ve got a website, I wrote a book on cleaning your credit.

Joe: There’s also some other companies that are pretty good about helping you get your credit cleaned up and you probably want to eventually do that because it’ll make your life cheaper. You may want to go out and get a loan for your car. You may want to have credit cards again instead of just debit cards. But in the meantime, debit cards are usable. You can go out and you can buy a car with subject to. Take over the guys loan. You know, if you get on craigslist, into the cars that are available, and you start calling every one of them, you know, I’d like to trade on your car. I’d like to take over the payments on your car – would you be interested? And you left that message, you’re going to get a few people that say yeah, I’d consider that.

Joe: Because there’s a lot of people that have mortgages, or have loans on cars, that still have a lot to pay on them and you could take over that payment without having to qualify for it. And they could title you the property when the whole thing is done. So, these are things that you can do if you work with buyers and sellers rather than banks. Just cut banks out of the equation altogether. Don’t worry about your credit, because your credit does not define you if you don’t allow it to define you.

Joe: I always like to remember Sam Walton, who built the Walmart stores. And he went bankrupt three times. Maybe more than that. But he said, “I don’t trust anybody that hasn’t gone bankrupt at least three times.” I think that’s excessive. Hopefully you’ll never have to go bankrupt more than once. But, it also makes you wonder how did he build Walmart if he had bad credit? He did it because he figured out another way to make that happen that didn’t require his good credit, his personal credit.

Joe: And you can do the same thing. And if you build a business, hopefully you’ll treat your employees better than he treated his, but, you can build a business that requires no banks at all. And then when you want to use a bank, they’re going to want to come to you. Banks come to me all the time wanting to loan me money. And they do it because they make a lot of money when they do it. And I hate to give money – I hate to pay interest on properties. I hate to pay interest on the cars that I buy. I want to be able to get it without paying that.

Joe: And if I work directly with sellers, I can do that. If I’m buying a car these days, I can do it just by paying cash for it, trading in the old car and paying the balance in cash. I can do that now. And eventually you’ll get to that point where you can do the same thing. You don’t have to do that, but your car’s not going to be a profit center. It’s going to be an expense.

Joe: Anyway. That’s credit. Don’t let it get you down. You can still do this business without it. If you’re going through bankruptcy right now, you can start making money tomorrow and still do okay. So, don’t worry about these things. Just get moving forward and start doing deals and stop feeling sorry for yourself. This is a great business to be in.

Joe: All right. Subscribe – hit the bell and it’ll send you an email every time I put a new video up. Go to, sign up for my free newsletter. I give a lot of free information on that site. And check out my mentor program, six month mentor program, I work with people personally, help you build your business. It’s expensive. It’s like going to college for a semester and you’ve got to guarantee me that you’re going to do the work if you’re going to get involved. Because I don’t want to work with people unless they’re going to be serious about it. Bring a good attitude. But, if you’re willing to do that I can help you build a business.

Joe: All right. – good luck to you.

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