Minimizing credit checks!

[Jared Elms]

Buying multiple houses a year, How do you avoid so many credit checks?? Especially if you do it personally and with an LLC or two

[Karl Denton]

Hello Jared, 
So I believe with hard money loans, the lender approves a borrower based on the value of the property being purchased and the lender may check soft credit but most times just wanna see funds of then assets they will need. They lend on the house knowing they can get there money worse case.  This route will be much less rigorous than it is with a traditional loan from a mortgage company. It is also unlikely that hard money shows up on a credit check or report but will appear in a assets search or background check. When using a hard money lender you’ll typically see them run background and asset searches rather then a hard pull of credit. This is one way, I’ll have first hand experience later this year. 

[Alex Hunt]

From a lender standpoint I can share that if you buy multiple within a 90 day period of the credit check is the best route. As we can use a report for up to 90 days on as many properties as you would like. Even if you had to do it ever 90 days that is only 4 checks a year, much less damaging then checking per transaction

[Chris Mason]

Quote from @Jared Elms:

Buying multiple houses a year, How do you avoid so many credit checks?? Especially if you do it personally and with an LLC or two

 I mean... has it occurred to you that if you're going from having 1 mortgage, to having 6 mortgages (or whatever), in 1 year, a lowered FICO score is an example of the system working? 

Objectively, you probably should have a lower credit score, until a history of [ on time payments X 6 mortgages ] is established. 

A standard thing I say to FTHB at closing is to expect your credit score to tank for a while. Historically you've serviced $3000 in credit card debt, now you have $900,000 in debt and zero track record of servicing it (yet). Soooo, yeah, your credit score should go down. That's evidence of the system working. 

It's not the credit inquiry that gets some of those FTHB by the way (TLDR: it's never the credit inquiry), it's the departure from historic patterns (depending on what those patterns are, YMMV). And it's temporary until the new track record is established. 

[Andrew Postell]

@Jared Elms thanks for posting.  Always great to hear from a fellow Texan.  The two things I would guide you on is to try to get a lender who states your credit is good for 120 days (lots say 90 days) but also that multiple credit checks really aren't that big of a deal.  Just keep your credit in a good place and it won't really matter.  Lots of us have multiple checks on our credit throughout the year and it's fine.  Now, if your credit is already terrible....well, that's something different.  But strong credit won't be impacted by credit checks in a large way.  Hope all of that makes sense.

[Jared Elms]

[Jared Elms]

Quote from @Alex Hunt:

From a lender standpoint I can share that if you buy multiple within a 90 day period of the credit check is the best route. As we can use a report for up to 90 days on as many properties as you would like. Even if you had to do it ever 90 days that is only 4 checks a year, much less damaging then checking per transaction

 @Alex Hunt Thanks for the valid information. This doesn't seem that bad.