beginner's need advice

I attended my first seminar (Whitney) with my wife a few weeks ago. She’s excited and I’m motivated. However we have alot to learn. She wants to do the Property management/ Passive income - I want to rehab and flip (because I love to tear out walls and build new, lol). We think a reasonable goal for the first year is to own our first home (a rehab maybe) for equity and living quarters, and a duplex (or 2) to manage…maybe flipping one along the way if we come across a deal.
So for our first property; we’re not sure if we can get conventional financing. Scores 560-620 and income of $40k we’re working on improving the scores. After looking over our finances, we decided we can afford $500/mo payments on the home. What are some strategies/options for us to help build credit, equity, and passive income safely?
Our first prospective deal seems to have stalled. We are going this weekend to look at a 60k 2br w/possible owner financing…wish us luck!

Owner financing is a great way to go… less credit score hassles n such. Also, it will not show up on your credit reports which is both possitive and negative. The plus, is that it really won’t affect future financing. The negative, is that it wont help you build credit.

As far as building credit… get a couple credit cards, secured if need be, and charge some of your normal expense to them. then make payments. DO NOT PAY THEM OFF COMPLETELY EVERY MONTH. Keep a balance on them, yes you will have finance charges, but if you are trying to build your credit, this is the better way to do it. Make your payments on time everytime. But DO NOT APPLY TO TOO MANY COMPANIES. Just get a couple. and make your payments. Also, get a copy of your credit report. take a look at it. it will help you understand whats helping you and what it hurting you. Then if you can, dispute any negative items that may not be completely accurate.

Please read these forum. There is lot more in REI than rehabbing or managing properties. All this is when you find a property that is even worth it. All deals are not good deals. Please read and research as much as you can…while keeping your eyes and ears open. Frist deals are the toughest, either it makes you or breaks you. If the deal is good than you will be on your way to riches but in case if you get a bad deal, you may come out of it without loss but getting out of that fear will be difficlt. I am not trying to scare you but to give you my 2cents to be carefull and research as much as you can. Donot listen to your gut but to your brain. Do all your calculations and if it comeout right, go fr it.
Best for last…GOOD LUCK

We’ve been working on the credit for awhile now. From the most recent credit report (joint) I can tell that we do need building. (Yet I hesitate to get another CC 'cause the wife LOVES to SHOP! lol) Most of the “negative” is from old Medical bills. (which I have heard are not usually considered) ??? We are paying off the smallest first - my reasoning is that ‘it’s not the amount, but the number of negative items that hurt’.
I’ve worked in residential construction/landscaping most of my life. I have a good knowlege of what’s what and how much it’ll cost. On top of that I usually have a trustworthy ‘gut feeling’, but I keep it positive by looking at POTENTIAL. The wife is meticulous in paperwork (seasoned office clerk), and in balancing to the penny. Also she adds the ‘woman’s touch’…the ‘asthetics’ like color cordination. (something she says I have no sense of! lol, and I agree!) Together I think our differences are complimentary. We’re not skeered…I know the deal is out there, I know the potential for profit is there. Cautiously and patiently we’ll find/get it. I spend most of my free time learning all I can from the forums/books, etc. I admit the new world of RE creative financing seems a bit overwhelming to me, but one step at a time, it’ll come…as will that first deal.
Our first prospect never called us back…not the best of luck, but I’ll give it one more try - then move on. Ultimately we’re looking for the place that we’ll fall in love with, but isn’t everybody?

New BWB - tried to work pre-foreclosures but am terrified to door knock so a couple hundred for ads and postacrds later- I have a home under contract for $23k less then assessed value. it’s a nice house with little rehabbing needed but can’t get financing. Like many BWB want deals with the promised “No $$ down”… my credit isn’t bad my scores are not 620 for full financing… asked local hard money lender from my reia group… not up there alley. Property is in NH and I did try some hard money lenders from here… any advice … seller looking to settle up and not keen on seller financing…Any advice

with a 620 you should be able to get bank financing, what road blocks are you comming across?

my fico is less then 620- the property is also a leased land and a modular (not a mobile) which were highly popular for awhile in NH (maybe still are in some parts.) Those are the biggest roadblocks… The owner owes about $73K on HELOC and 1st mort (she has bough another house & want to sell this elephant) it would make a good rental if I knew how to structure a deal that would allow me to access the property. I thought about trying for a $75k hardmoney loan to pay her mort off and then see if she will carry the remaining $115 but sweetening the deal to $195…but again I am not sure how to do that. If I understood “wrap arounds” better I would try that … I have read up on wrap arounds but dont quite get them… any way to clear them… I have been reading Hicks, de Roolf and Lowry

hotott, the first rule in rei is

do not fall in love with the property - even if it’s yours to live in - if you want to invest in real estate succesfully - forget that “love” stuff.

rei ain’t about all fuzzy warm feelings - it’s about cold hard cash.

TMCG, the thing is that I could fall in love with many! (properties that is…) …and have them all. The things I like about rehabbing is the same thing I’ve liked working construction/remo jobs… stepping back after I’m done and saying “yep, I did that” …and making a profit on it is just icing on the cake.

Why didn’t I think of all this (REI) sooner?

Somebody kick me.


that’s great man. just be careful - learn alot about it and don’t fall in love with it. i hear what you’re saying, but if you “fall in love” with what you do - you may become a “perfectionist” and put more work, effort and CASH into something moreso than an experienced rehabber, who will do a good job, no a great job, get it done before you, spend less time on it than you, sell it faster than you, AND probably make more money than you - simply because falling in love with it never crosses their mind.

learn it, find it, buy it, fix it, sell it! there ain’t no “love it” in there. just my two cents.

Fall in love with the deal, NOT the property!


JPopkin is right. I had good credit but a lousy credit score when I started doing this. I mean I had no late or slow payments but my score was around 600. What I had been doing is paying off my credit cards closing the accounts and paying cash for everything. That meant that my credit profile kept getting newer and smaller. That drives your score down. I got some advice and opened some accounts and started charging on them. Nothing big just if I was going to buy a hammer at Lowe’s, I would charge it instead of paying cash. I never let the balance get over 1/3 of the limit and went on the website of the issuing bank and scheduled all minimum payments. What that does is assures you are never late. I go in once a month and pay what I want to in order to bring the balances in line, but the worst thing you can do is open a bunch of new accounts and have some of theme be paid late.

My score now fluctuates around 700.