Civil Judgment on my credit- is financing even possible?

[Christopher L.]

Hi all, I am new to BP but not to real estate investing. I started buying homes in college and worked my way up to beachfront rental homes in California. Since I didn't have anything like BP to guide me, and I was sitting on tons of equity, I had the bright idea to get a cash-out refi and buy a business, which was supposedly extremely profitable.

Long story short, after I bought the business, I found out that the seller had previously sold the business to another company, and a massive lawsuit resulted between everyone involved, which pretty much wiped me out because of the legal fees and distractions from the lawsuit. Everybody sued and counter-sued everybody else. (I thought I had done the due diligence by using an Escrow company for the sale, but they closed the business and disappeared once the suit was filed.) At one point, my attorneys told me that it would cost in excess of $100k and possibly a few years to finish out the suit. At that point, I was running on fumes financially, so I closed the business (which was losing money at that point), took a short sale on the properties, and cut my losses by trying to get out of the lawsuit and the mounting legal fees. This resulted in a $200k judgment against me in favor of the guy who sold me the business (Everyone had sued him for fraud but because I didn't have enough money to fully prosecute the lawsuit, I ended up owing him- after he had sold the same business twice!).

I now have a $200K judgment on my credit, and am wondering if I can ever get financing for investment real estate again. I can save funds for a down payment, but am wondering if I can get financing for the balance of a purchase price, either as an individual or by forming a business entity with guarantors for the loan. Does anybody have any ideas, aside from paying a judgment to the guy who cost me all of my real estate in the first place? This would be a last resort, as I am already making periodic payments to the guy. Do I have to wait until the judgment is paid off to start investing in real estate again?

Thanks in advance for any feedback!