All Forum Posts by: DeBret McGee II

Hey DeBret - 

It is possible. Have you looked into partnering with other investors? That could be an option for you, as some lenders will take the higher credit score 

Hi Debret,

How low are we talking? Most hard money lenders require a credit score of 600+, but I’d recommend working on building your credit before taking on a fix-and-flip project. Refinancing could be a challenge if your score hasn’t improved by then. Plus, a higher credit score will help you secure better pricing. Additionally, Lenders can assist with a rapid rescore, working with credit agencies to guide you on which cards to pay down to boost your score.

When I got started it was finding older, experienced investors. Create a relationship and show that I am eager, hard working and committed. Then partner up with these people. I did my first 50 or so deals bringing $0. I found the deals, put together the plan and executed it. Now I am wearing the other shoe and it’s nice. Just have to be good at selling yourself. 

Securing loans with a low credit score is possible through private or HM lenders. Other options include partnering with someone with better credit, negotiating seller financing, or leveraging existing property as collateral. Based off of the sellers mortgage percent or if they own the house outright seller financing or sub2 might be your best bet. Alot of sellers aren't versed in that so if you can educate them you can probably get them to do so. 

@DeBret McGee II, I would generally say try to find a partner. In my limited experience, HML may not care too much about your credit but they will care about your, presumed, lack of experience. There are probably some out there, like Ryan noted, but they will be very expensive, and may make it hard for a deal to pencil.

I would go to local meetups and talk to other investors.  Note that you are out hunting but have limited experience, so wondering if they would consider keeping you on as a partner in the future if you are bringing them good deals.  Don't start the convo with this, but this would be the ask.  Most experienced people are limited by deal flow, so you offering to bring them deals could be a huge value add to them.

And while you are working to meet investors and source deals, I would be doing everything to clean up your credit.  Real estate is a capital intensive business.  And the cheapest capital comes from traditional lenders, who will want good credit score and financial wherewithal from the borrower.  If you want this to be your business, having access to the most capital at the cheapest rate is a necessity.