First post here, but I have been reading a lot of the older post. Need to get some up to date information.
I am nego a deal right now that I hope to have under contract for aprox 40% LTV (ARV) with very little repair cost. A true don’t wanter. House and yard need to be cleaned and given some curb appeal… nothing else.
I have been talking to someone that may provide the $$ since I don’t have any and my credit is bad due to a long period of unemployement. I hope this person will come through. If not I’ll be looking for HML in GA.
Will someone with bad credit ( low 500’s ) be able to refi within 6 months ( sooner would be beter ) to pay off the private lender and take some cash? Lets say 65 to 70% LTV ?? I have a potential partner with mid 700 credit score that I could bring in if I had to, but only want this to be a “plan b”. My credit will be improving, as I will be caught up with everything by the end of this month. cc’s paid off… morgage current… hospital bills paid… you get the picture. I know what has to be done to bring my scores back up, but I know that 6 months from now my scores will not have returned to a “good” level.
I know there is not enough information, but I can’t plug any solid numbers in just yet. I don’t want to flip this property as it will provide a good cash flow… I’m more concerned with my ability to refi quickly with a poor credit score.
If you have some guidance or comments please post and thanks in advance.
Will someone with bad credit ( low 500's ) be able to refi within 6 months ( sooner would be beter ) to pay off the private lender and take some cash? Lets say 65 to 70% LTV ??
Potentially. It all depends on the other parameters, such as doc type, DTI, etc.
My credit will be improving, as I will be caught up with everything by the end of this month. cc's paid off... morgage current... hospital bills paid...
You are heading in the right direction. However, regarding your credit cards, you do not have to pay them in full to have an impact on your score. Just keep them at about 30%. Whatever you do don’t close them. It will be hard for you, with your current score, to open new trades. Just start paying attention to what you have.
Your mortgage will have the greatest impact on your ability for financing. make sure that this is paid at all costs.
I will differ with him on one point, however. If you have the ability to pay off the cards, do that. BUT DO NOT CLOSE THEM!!! (he is right on that). Once you get below 30% utilization on your revolving lines (like cc’s), then they begin to be positive. However, I hate to see anyone pay high interest.
The best thing to do with cc’s is leave them completely paid off and never charge more than 10% of the total credit limit in a month (then pay it in full). This way you never show more than 10% utilization on your cards and you do not pay interest!
paying off your credit cards and collection account will not neccessarily increase your scores, in fact it can hurt them. Remember credit scores are based on a 24month payment history and active. If someone had a collection account that was 5yrs old and no activity and then goes and makes a payment on it, it will get recaluclated into your score and actually have a negative impact…Same for credit cards…Sometimes its best to just leave alone…
now, if your paying off cards that have been chargd off or a collection account like the medical, request from the creditor a hard deletion letter to have it permantely removed from your credit file. This will jump your score dramtically. A typical collection account less than 2yrs old from last opened or payment made will cost you about 15-30points. Same as any account rates R-5 or I-5 (collection status on your report). Explain your situation to each creditor calmly. Give them a sad sob story if you need to and get the letters. they generally will send after account is paid in full, so if you can, make the last payment with a check by phone or debit card to them so they can create and send letter out the same day.
If you do not get the accounts off, then i recommend disputing the accounts as paid in full and no mine to get removed or seek a credit repair company for 200bucks to get them off.
Let’s clarify something here. Yrush is referring to cc’s that are already charged off. I am assuming that your cards are not charged off, but just have high utilization. If they are not charged off, then my advice stands. If they are, then that’s a whole different ballgame…
its tough to know the persons accounts but judging by score, i am pushing for some charge offs and heavy collections…
Also if you have lates on the mortgage currently, this can pose a problem in getting an investment loan. Banks will see your paying your property behind and will want to know why you think you will pay the investment ontime…
you maybe better off partnering on a few deals, get some seed money and then go on your own…
