How can I get a equity loan with terrible credit?

Question

I started as a union carpenter in NYC. I worked and saved then bought a house in northern California. My sister also bought a house around the same time very close to mine. She eventually moved to las Vegas and didn't have time for it anymore so she sold it to me so now I have 2 properties. Both properties increased in value since then. The one I started with is now estimated at about $230,000 and there is about $45,000 left to pay. The property I got from my sister is now estimated at about $115,000 and that one is fully paid off. I started a carpentry company and have a great team of guys ready to work and I know that comes hand and hand in this business especially being that I want to buy, fix and flip/hold. Im spread real thin now and would love to use the equity I have but now my credit is shot because of missed mail while I was in California. I sacrificed and put a lot into the company to make sure the workers get paid and certain tools are bought to complete certain jobs being that we are just starting so I don't really get profit yet. Once I have the capital I can do so much more to make so much more money then I can fix my credit. How do I use the equity I have while having terrible credit, so I can get things rolling and out of this stuck mode?

Craig Jeppesen · Answer

Probably won’t be able to. I would stop buying tools and pay your bad debts instead. That will help your credit. You also need to raise your prices if you have no profit yet.

You can also partner with someone with money for flips. You do the work, they provide the cash and you split the profits.

Bryan Devitt · Answer

@Tafari Howell I can't count how many contractors have been in your position and taken money from equity, credit cards, etc to make ends meet "for now". Do you know what I can count? The number that didn't go into bankruptcy once that "temporary" financial patch was blown through. If you can't make it work right now, do whatever you can without taking money out of the houses because that won't help you. Learn to work payment schedules better, learn your numbers better so you don't lose money on jobs, do anything else except rob Peter to pay Paul because it almost never works. For your sake, it is probably good you have bad credit. The only way you'll probably be able to get cash out of them is if you sell one.

Tafari Howell · Answer

Thanks for your reply @Bryan Devitt . I wouldn't use the money for bills or to buy tools for my company. Being that I have all tools needed for a home renovation, I would use it for a deal and then I have people ready to work on it. I am close to New Jersey and come across so many potential deals and the biggest expense in a deal is my profession so I feel I have less risk failing. Worse case scenario is I'll have to work for free but the equity should be there once its finished.

Tafari Howell · Answer

@Craig Jeppesen Thanks for the reply. Yeah Im thinking about partnering with somebody.

How can I get a equity loan with terrible credit?

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