I’m just deciding to get RE investing and not sure which road to go down. I currently am in a house with about 20K equity. One of the things i’m up against is at this time I have very bad credit but do have about 7K to invest and the equity in my current home. Should I A) rent out my current home and invest in a seller financing home that I would move to and had the prospect of being sold in a couple of months for a profit or ,B) Sell my existing home and take the money I make (about 20K) and invest it in RE that would be a Seller financed home that I could sell for a profit in 90 days or so and move again?
I guess I"m wondering if the best thing to do is to sell my current living home and use the 20K profit to move into a new home that I want to make a profit on by selling for a higher selling price than what I paid within 90 days or so of purchasing. Or should I stay in my existing home and try to invest in a seller financed home using the 7K I have to invest since I have no credit.
As hard as it is to hear, the best road for you to go down is to work diligently to repair your credit. Otherwise you may have trouble pulling that 20k equity or you may have to pay high fees and interest on your next mortgage. Plus it will make all future investing much easier.
People try to sidestep the credit issue because it doesn’t get fixed ‘immediately’. [shadow=red,left]The sooner you start anything, the sooner it gets done.[/shadow]
Hey,
Agree. Fix the credit. Your current plan sounds more like speculating than investing, IMHO.
Peace,
Richard
It costs about 10% to sell a home, so I hope the equity you’re counting includes the cost of a sale. I’m not sure you can really do much for 27k even if you are calculating correctly. Most good investor loans still require sound credit. It seems like you’re putting yourself in jeopardy without much liquid assets. You’d need an emergency fund to help in lean times or in cases of a miscalulation.
Is there any way you can partner with someone else? Maybe you can scout the deals and they can provide the cash as long as the home sounds like a good investment. In the meantime, you can fix your credit issue and gain experience. Maybe there is a local investment club near you.