Starting a Real Estate Investing Business with No Credit

Starting a real estate investing business is a great idea, and one that could bring you plenty of money, but what if you have no credit or money to start investing? Is this something you should just forget about, or is there a future for you with real estate investments? The beginner guide to real estate investing should always have a section on what to do if you have little to no credit, and if it did, this is what it would tell you.

First, get it out of your mind that investment real estate requires good credit. This isn't true. You could simply invest with an REIT, real estate investment trust, and make money that way, no matter what your credit score is. That, of course, would require some collateral. But even without collateral, you can still get into real estate without good credit.

One option is to find someone to partner with you in the real estate investment business. Avoid calling those "Real Estate Investor Seeks Apprentice" signs or ads that you see around the area, but instead find a friend or work associate interested in seeking a better financial future. The key is finding a person who has a good credit score.

If you are interested in flipping a property, you can do it without credit if you find the buyer first, and then look for a property. When you have a qualified buyer in mind, you can usually find a house that fits the bill quickly, and it costs you nothing out of your own pocket. This means you can have a real estate investing business without spending your own money for the properties you purchase.

When researching real estate buying information, don't forget about hard money loans. These loans, typically for around 65% of a property's equity, do not consider your credit. You can get a hard money loan on a property you have already purchased and not sold, on buildings you are leasing, or on your own home.

You might be surprised to find that there are many lenders who will still lend you money even with your poor credit rating. This is called "subprime" lending, and subprime loans typically have a much higher interest rate than loans you get with a good credit score. This isn't a problem, because you will be turning the property around quickly for profit, and this means you will be paying off the loan fast. Watch out for subprime loans with early repayment fees, because these could harm you by taking more of your money, cutting into your profits.

Finally, you can get private money loans to finance your real estate investments. Private money loans are loaned to you from individuals. These individuals are willing to loan you money because you are going to pay them a higher interest rate than they would get from the bank. Because there is no traditional lender involved, your credit rating will not come into play. Many times you will know these people personally, and they will be willing to take your word for repayment. With these tips, you can finance a real estate investing business even without a good credit rating behind you.