Credit Partners

Okay, I don’t know if I stated on here or not, but I am young (19), and I had my identity stolen when I was 12 or 13. Anyway, if you have ever dealt with credit repair, and collection agencies you know it is a pain. Anyway I have mastered the art of getting items deleted from my credit report, and getting collection agencies to run and hide. The problem is when one collection agency can’t collect it rolls over to another scumsucker; and that means another entry to get deleted from my credit reports. As I said I am a master at this now, but it takes time, to get these things resolved.

To the point, it is because of the above, and because I want to open myself up to other financing possiblities (for longer term projects possibly condo rentals, ect.) I am thinking about enlisting a credit partner for times like these (when my credit is shot to hell).

Now I just need to know what the process is.

-After I find a CP, and a property, will he cosign on the loan, or apply by himself?

-Also will we purchase together or the CP by himself?

-After the property is purchase (if we purchased it together), should I do a QCD so I will be the only one on the title, and then the loan would almost be like a sub 2 or what?

Anything you can add will help.

*** One more question, does it matter where my CP is located. Like if I am in Louisiana and my CP is in California. Would it be better to get a local CP or what?


All of what you asked (except the QCD thing) is common practice. However, you shouldn’t reasonably expect your partner to use his or her credit for your one-sided behalf. If your partner has one half of the equation (money or credit) and you half one half of the equation (skills to pay the bills) then it’s only right to have a 50-50 profit split. I would only enter into partnership with someone on a deal-by-deal basis incase things goes bad …as they usually do.

Wow, I wasn’t expecting a 50/50 Danny. I was told that a credit partner should get anywhere of 3%-15%. I am kind of shocked. Anyway, I have finally decided to take exerian, equifax, and trans union to court ( or at least get a settlement out of them), and stop this stuff from popping up on my report. That being said, I think I may only use a credit partner for one or two deals. Now do you have any idea where I can find a few good CPs?

I view a credit partner as being any other “money” partner. I don’t think I would ever risk my personal credit and/or money for 3%-15%. I’ve had a few offers to be apart of partnerships and they’ve always offered me 50%, but with the idiots who wanted to be my general/managing partner, I wouldn’t of done it for a 99% profit share.

Good luck in court.

You have a really good point Danny, and thanks for the well wishes.

Now, if you don’t mind, I could use some of your wisdom here. I have 4 potential credit partners (all ready, willing, and able; I pulled their reports today, and I have NEVER seen reports with so many tradelines and no lates, as icing on the cake two of the four have files and tradelines over 20 years old). Anyway, they are all just waiting for the word. I mean for me to explain what the process is. The problem is, I have no clue. I pride myself in having made a success in real estate without purchaing one book, or course. Everything I have learned, I got from common sense, and free resources; but I have yet to find anything on the credit partnering process.

Do you mind giving me a play by play, for the simplest way to utilize an out of town credit partner.

That’s great that you already found potential partners. I wish I could tell you an easy cookie cutter way to deal with this but your going to be dealing with people you don’t know and probably will never even see. I would really recommend you talk with an attorney and CPA to work out the kinks of this deal.

I’ll give you a very vague scenario of what I might do.

Ofcourse work out a partnership agreement making you the general partner and them the limited partner. Figure out everything you can about the property you are going after, proft sharing, and numerous exit strategies for an easy escape incase things go bad, etc, etc. (Maybe a short business plan) Find the property, the partnership should apply for the loan, use only the CP’s credit if possible, however you may have to use yours too.

The fundamentals of this are very simple, it’s the details where it gets complicated. That’s why I would certainly get the lawyers and accountants involved from the beginning.

I hope this helps but I doubt it.

Thanks again, Danny. Actually it did help, that changes the way I am lookign at it. Last night I planned on doing this:

1- draw up a simple agreement, have it signed and notarized
2- have my partner sign and have notarized a Mandate Contract which is basically a limited Power of Attorney, but since Louisiana is based on Napoleanic Code, and not UCC, it is called a mandate and must be specific

The mandate would allow me, to buy and sell in the partners name, mortgage a property in their name, and collect from an escrow account in their name (for rehab funds).

3- find a property to present to the parner, get it under contract in both of our names utilizing the mandate contract, apply for a mortgage or HML in the partners name only, and close on the property without needing the partner there again utilizing the mandate, the prehab, rehab, or rent out. If I prehab or rehab, when i sell the property I will owner finance and do a simo to sell the note.

Now I am looking at reviewing what I planned with your advice.