Multiple homes in a year + credit scores

[Ignacio Rosenberg]

I’m trying to understand how people are buying multiple units in a year or so, without their credit score crashing. I would assume after your second mortgage in a few months the ability to get another one, even at exorbitant interest rates, would be minimum to null. 

Can anyone shed some light onto this? 

[Kevin Romines]

Yes, the number of recent inquiries on a credit report can start to bring your scores down? Typically each inquiry is worth 3-10 points potentially? Credit reports are good for 120 days, so if you were buying all the time, theoretically you could get away with 3 credit pulls a year, so long as you worked through the same lender? If required, the lender can do supplements to the credit report for any updates?

If their scores were high enough to start out, 3 inquiries for 3-10 points each over a 12 month period may not lower their scores enough that it keeps them from getting new loans. The best rates and terms are going to be with Fannie Mae and most of those loans can be done down to a 620 credit score. 

Beyond Fannie Mae, there is portfolio loans or what is called Non-QM loans. These loans can be bank statement loans or investor cash flow loans in which no income or employment is shown on the 1003 and the property just must rent for equal to or more than the PITI payment on the rental. Those loans can be done in some cases down to a 500 credit score.

Then there is hard money used for the purchase or bridge loan to buy the property and then it will be refinanced out of the hard money into a Fannie Mae or portfolio/Non-QM loan. The hard money may not even pull a credit report or care about your score, so you only dealing with the score on the refinance. The hard money is used as just a bridge loan to close fast, or it can be used to acquire the property and then also to rehab it and create equity so that when you refinance you get all your money back out of the property and yet still cash flow and get the best terms available even though you don't have any money into the deal at that point?

I hope that helps?