Aspiring investor with bad credit... Is there hope?

Question

Hey guys, I'm an aspiring investor with a good salary, ample savings, but terrible (sub 600) credit. Should I hold off on investing and focus on repairing my credit or is there still a realistic way for me to begin investing? Any help would be so greatly appreciated, thank you!

George Torres · Answer

Wow! Thanks so much @Tyler Alberson, this is so helpful. I'll continue doing my research and develop a more clear picture of what kind of investor I want to be.

Tyler Alberson · Answer

With a good salary and ample savings, I would ask you what your goal, aspirations and motivations are when wanting to get into real estate investing? Are you looking to be a hands on investor that is more so running a business or are you looking for a good source of passive income while not doing so much hands on work?

There are many different ways to start investing with a low credit score especially if you have a good salary and ample savings.  I think the first place to start is investing in building relationships with other investors. This will expose you to more non-conventional investment deals that will put less emphasis on your credit score. No matter what your motivation for getting into real estate investing, building relationships with other investors will always be very beneficial. Secondly I would figure out what type of investor you want to be.

If you are looking to be a hands on investor putting deals together, which will entail more work than you think it does, look into starting off with some cash deals. There are cash deals to be had for as low as 15k that will start making you sizable monthly returns. Another option, if you are lucky, is to use someone else's credit. Of course you will probably have to cut them in on the earnings, but this will give you a hand up especially if you feel like you need to take a mortgage out. Owner finance deals are another option. These are just a few ways you could get started in hand on real estate investing and there are many more options.

If you are looking to be more "hands off" Im sure there are experienced real estate investors in your area looking for capital. Depending on how much saving you have, being a silent investor in a property may be a very good way to start earring passive income. I, myself, cater to investors like this that do not want to be involved in the day to day grind of owning investment properties by allowing them to buy percentages of companies that own properties. They still have equity stake in the property but rely on someone with more experience to handle the day to day operation.

I hope this gets the juices flowing just a little bit. I would really recommend figuring out what kind of investor you want to be and how much time you want to commit to REI. Then you can brainstorm possible ways to get around a low credit score.