ID Theft Victim: Can I get into real estate investing?

Question

Without going into all the details, a few years ago, I was the victim of ID Theft. I now have a lot of "black marks," and am trying to get things cleaned up.

I've been looking around, on BP, and other sites, and one thing a lot of lenders look at [pro PML firms, HMLs, etc.] is credit, to make sure that I "won't be an issue." The problem is, being an ID Theft Victim, I have a lot of "issues." I do have the police reports, although I don't know if that would help, and not sure I want to, or even should, share that info. It would be very difficult to prove "what's mine, and what isn't" to a lender.

So, what would be some options? I'm interested in buy & hold of small multifamily [small apartment buildings, multifamily].

Wendell De Guzman · Answer

@Brian Gibbons is a smart dude. He is right in saying that Subject to is one of those things you can learn in order for you to buy properties for buy-and-hold even if your credit is destroyed. However, check with your state laws because some states are so strict regarding subject to's. For instance, in IL, you cannot do subject to if the homeowner is in default or in some stages of pre-foreclosure.

Bottomline: there are ways to invest even with bad credit.

One other way that has not been mentioned yet is get credit partners. You do the work of finding the deal, funding the deal with a small downpayment (you have to show you have skin in the game) and finding the tenant. Your credit partner gets the loan. You split the cashflow and equity in whatever percentage basis the parties agree on.

Account Closed · Answer

I think you should expect to have to go into a lot of details if you want anybody to lend to you.  You are going to have to prove the "black marks" aren't yours. And explain why they haven't yet been removed if the crime and police report are from a few years ago.  It's a red flag that they are still there.

Many of us have been victims of ID theft but we act swiftly because our credit and finances depend on it.  Lenders have every reason to be concerned if your report isn't clean at this point.  They'll just assume you're a risk....because you are.

That being said, it can take time and persistence to clean up the report.  3 years ago my daughter was mugged and her purse was stolen.  The woman who stole it used her credit card within the hour and wrote a check to herself and cashed it the same say.  Even with the same day police report, a positive ID by my daughter when the police showed her random mugs AND the video tape of the thief cashing the check at the bank, Wells Fargo took months and daily phone calls to get the charges removed from her accounts. In my own case, my banks and creditors were way more responsive.  But the time and paperwork is still required. And a drag.

Some of your options until your credit report is fixed: buying with cash or finding a seller willing to finance you.

Billy Hills · Answer

Eddie.

Like K.Marie said. It will take some time and fanagaling bit it can be done. You just may have to think out side the box.  This year is the first tax return I will receive because of what happened to me and mine. Identiy thieft sucks, sorry for your loss.

Brian Gibbons · Answer

There are 2 ways to look at real estate investing:

1. I need good credit, how do I build it?

No Credit - build a credit history by going down to a credit reporting bank, have a JOB, give them $1000 for a CD for 12 months, have them loan you $500 to $1000 on a SECURED INSTALLMENT LOAN, that REPORTS TO ALL CREDIT BUREAUS.  Make sure they report, talk to the bank manager about this, look appreciative.  Then pay it off.  Then look at Secured Credit Cards for a Visa.

Bad Credit - Get this book, best book on build a good history even after a Ch 7 BK.

http://www.amazon.com/Hidden-Credit-Repair-Secrets-Extreme-ebook/dp/B004AM59WI

2. I want to work in real estate investing without credit or much down payment money.

I would look to do the following:

A. Learn underwriting for FHA.

B. Find low equity deals.

C. Learn Sub2

D. Learn Lease Option Assignments.

E. Learn marketing to sellers and tenant buyers.

You do not need good credit or down payment to be a real estate "problem solver".

Hope that helps.

Brian

Joe Fairless · Answer

@Eddie Starr - let's see you could wholesale because that doesn't require any credit approvals. Then, you could build up enough money to buy a place with owner financing which doesn't require credit approval. Or, if you have money, you could buy a place with owner financing.

Lastly, you could start learning how to bring in investors and running numbers on deals. Then you could raise money and buy deals that are more than 4 units which would put you in the commercial category of loans. They do look at credit but not as much as the actual deal.

Brie Schmidt · Answer

I would go through the preapproval process with a lender to start.  That way you will know exactly where you stand

ID Theft Victim: Can I get into real estate investing?

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