My story - So you CAN get a traditional line of credit without a perfect credit score?

[Justin Polston]

I wanted to let everyone know the recent important news for me individually and those still looking for traditional financing. I've had several properties with plenty of equity for some time now, and I finally received approval for bank financing that will help in raising my personal portfolio to the next level! This is something I find important because many normal institutions around my area don't do commercial loans unless you have a golden credit score and can show proof of liquid funds to repay the loan back ten times over.

I also hope this helps new RE investors keep their heads up when everything seems to be throwing you to the ground. You don't have to read everything below this paragraph, but those of you searching for financing, please know that with hard work, sweat, and answered and unanswered prayers, it can be done!

I know the following seems dramatic, but it's my story leading up to this point in my professional career, and I'm hoping it will help those discouraged with bank turn downs to keep striving to reach their goals and begin using OPM. It was actually my original post, then when I was done...I noticed how lengthy it had gotten. Enjoy if you do read! The first paragraph is enough to get my point across

For the past 7 (going on 8) years, I've been investing. Not like the normal folks on here, posting their out of state REI questions with the normal cost analysis. No. My strategy has been anything but normal. Obtaining funding from a private investor, every single one of my near 20 flips has been without bank funding. I've been shelling out 15%/annum, paying $2500 in origination fees for each deal ( and sometimes a closing fee on the back end). In the end, my potential profits are cut in almost half due to such high financing costs. But, if you want to buy real estate and the year was post 2007, your options are limited. Especially when your credit history is limited due to age.

I've checked in with banks every 4 to 6 months since late 2007, diagnosing their appetite for financing my deals. Each time, I was met with an emphatic "we don't touch those anymore" or "we can't consider your income, income". So, I kept doing deals and living off of the limited income because this is what my heart was set on. I kept going to school and paying for college, picking up real estate law and entrepreneur courses as my optional classes. I was going to be my own boss and do what I loved to do.

As the years have passed since 2007, I watched regulation take over commercial lending. I decided to start calling those gimmicky red and white "for rent" or "for sale by owner" signs in the yards. I was going to buy homes on contract to expand my rental portfolio, and I acted like my life depended on it. 1 respectable deal came into fruition within a year. After calling about 100 phone numbers, hearing "NO" 95 times, and figuring out quickly that out of the 5 that were interested, 4 of them obviously had no interest in making a deal that didn't line their pockets, I made a deal.

I acquired my first commercial down town property on contract. It was big, and needed work, but it was stout. I rented the downstairs to a gentleman who counsels, and he rehabbed the downstairs to a certain level of mutually agreed expectations. His rent made my payment. I leased the upstairs 2 bedroom apartment to hard working tenants that worked off the rent as I kept buying and selling flippers. Soon, the building was coming into shape and it looked like a respectable brick troubadour on my small town down town street.

It had been a couple years since I checked in with banks. I had worked with a real estate investment firm, and also received my Realtor's license. But I still wasn't getting ahead quick enough. It was time to see what banks had to say one more time.

So a couple of months ago, and just over 7 years after my first RE deal when I was barely 18 years old, I walked into a new bank in town; it was a Savings & Loan. I mentioned to a banker what I did and I was interested in obtaining financing.

"We can do that."

Finally, the words I'd been searching for. Building my credit, building my income, and building my contacts was about to finally pay off. I did not get my hopes up, though.

So I prayed. As a testament to God I thanked him for the sunrise that morning, and the sunset that night, and thanked Jesus for living the life we all should live and dying the death he did to save each and every one of us. I didn't pray for the deal to go through, but I was definitely quick to mention how this potential new relationship with the new bank could help me help my family get out of debt and stop struggling.

I gave the banker everything she asked for and then some. She accepted my several letters of recommendation with a smile and told me the bank would take them into consideration when trying to ascertain my credit worthiness, as none of the properties/mortgages in my portfolio would be on a credit report. She said she would know something in a couple of weeks.

The first week of the new year rolled by. I heard nothing. The second week, nothing. Almost to the end of January and almost 5 weeks after I had turned in the mountain of paperwork with proof of income, LLC documents, etc, she called to say she's still waiting.

Then another call yesterday afternoon. The package needed at least three board members to sign off before approving the loan that would refinance my debt and establish a new line of credit against 2 of my properties, with the potential to refinance more of them in the future.

Well, it received three signatures.