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What if My Credit is Shot & I Have No Money?

Guest post by: C.J Lauria

Article Overview: When ones’ credit suffers damage, private money lenders can make a transaction possible…for a price. That, though, is a subject for another day. In the meantime, wholesaling makes it possible for a new home business to generate enough cash flow to live comfortably and, in time, save a nest egg for future purchases. The idea behind wholesaling is to bird dog great real estate investment deals, and get them into contract. Once a contract is signed and escrow opened, the wholesaler then assigns the contract to a cash buyer (another investor) who will then fix & flip it or hold it as a rental. This way everybody wins.

What if My Credit is Shot & I Have No Money?

Anybody who’s been conscious over the last few years can acutely empathize with this situation. Many sincere folks have been faced with some of the greatest financial struggles of their lives. I am talking about educated, hard-working, intelligent people who have hit seemingly unavoidable fiscal impediments. I have had the opportunity to meet quite a few entrepreneurs whose credit has been damaged from the U.S. mortgage crisis. I have met others who simply have exhausted their savings due to job loss and other economic reversals. Today, I want to discuss the options one in these predicaments may have that would enable them to start their very own real estate investing business. It used to be that the term “investor” carried the connotation of a wealthy business person with a sizable cash reserve, and then came the 80s and 90s. These were the days of the no-money-down strategies and over-leveraging of real estate. Those times made it possible to take title to investment properties while banks would finance often at very high LTVs (loan to values) just to get the business. By 2000, the market was clearly following an upward trend and Lenders were known to lend as much as 125% on a primary residence. Wow, times have changed!

Not only has the scenery changed in the real estate investment market, but many have been left bruised and battered from the fallout of the worst crash since the Great Depression. The question for today is: “How is it possible to still break into the world of real estate investing, either full or part time, without a war chest of cash and good credit?” The answer is found in the concept of wholesaling real estate.

The fact still remains that the road to financial independence through real estate investing has generally been traveled by either 1) the fix & flip route, or 2) the buy & hold strategy when a property cash flows acceptably. I am still an advocate of these two strategies under the right conditions. Nevertheless, without money it becomes very difficult to actually purchase properties….and I don’t advise it. The risk would be much too high.

When ones’ credit suffers damage, private money lenders can make a transaction possible…for a price. That, though, is a subject for another day. In the meantime, wholesaling makes it possible for a new home business to generate enough cash flow to live comfortably and, in time, save a nest egg for future purchases. The idea behind wholesaling is to bird dog great real estate investment deals, and get them into contract. Once a contract is signed and escrow opened, the wholesaler then assigns the contract to a cash buyer (another investor) who will then fix & flip it or hold it as a rental. This way everybody wins.

The sobering fact about this type of business, though, is that it is not the fast track to wealth. It is a business…a very good one, but merely a means to an end. In time the wholesaler will want to jump into ownership, even if it is for the purpose of flipping for a quick sale. So, there is a way to enter the exciting world of running your own real estate investing home business without money or credit. And in this stagnant market climate, now is as good a time as any to get started.

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Article Tags: cash buyer, home based real estate business, investment deals, private money lenders, real estate investing business plan, real estate investment strategies, real estate mentor, wholesaler



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