All Forum Posts by: Matt J.

Hello Justin - I can elaborate on the credit scoring question. The above poster, Marc, is on track with his comments.

First off there are diffrent types of credit scoring models. Meaning that if you go apply for an auto loan they will pull your credit and the score model they use will grade you/score you diffrently than if you applied for a mortgage. Diffrent industries diffrent scoring models. Also think when you apply for insurance they pull your credit, they have yet another scoring model.

How often can you have your credit pulled in conjunction with a mortgage and what it will do to your score? The answer is ALL mortgage inquiries within a consecutive 30 (or 45 day period depending on which score model the mortgage lender is using) day period will all show as inquiries on you credit report but will not affect your credit score - zero impact. The reason FICO does this is that they figure as a good consumer you're rate shopping and therefore arent going to penalize you. Hard to believe right?

Now let's say your credit for mortgage purposes is pulled everyday for 30 days consecutively and it's also pulled on the 31st day. The FICO score model will look back at those 30 inquiries and will group those 30 inquiries togher and only count them as one. Once again this is becuase they were pulled within a 30 day window and they figure you were rate shopping. People always ask "well how much will it affect my score?" There is no simple answer to this. How it affects your score is based on your overall credit profile and history. I've seen it affect people 5 points, I've seen it have no impact.

For more info check out mfico.com and "Learn about Scores", I'm not affilated with FICO in anyway but do work in the credit industry.

Let me know if I can help.

Hello Matt - I think I can help with the credit piece as I work for a national credit reporting agency. You've done the right thing getting the secured credit card. That's a great way to start. I can tell you that it can take up to 6 months or more sometimes for a new tradeline to report to the bureaus. You also really need to have at least 3-4 tradelines (types of accounts, credit card, installment loan, auto loan). They can all be one type of tradeline or a variety of the above, it does help to have a variety though. What's happening now is you're getting what's called a "thin file" meaning you don't have enough credit to generate at score with all three bureaus. There's also a chance that who you have your credit card through is only reporting to that one bureau. One thing you can do that's a little out of the box to get a new/another tradeline is if you own a vehicle free and clear go to your bank or credit union and get a loan against it. Yes you'll be paying back a little interest but you'll now have another tradeline. Please let me know if you have additional questions and congrats on the e-commerce sale!

Regarding the best way to generate a good credit an score and history I agreee with Reece O'Brayn and Mindy Jensen 100%.

Your local credit union is a great place to start. I'll elaborate a little more on what a secured credit card is. A secured credit is card is where you deposit let's say $200 dollars into an account at your local credit union and they give you a credit card with a limit of $200 dollars on it. The $200 dollars you deposited is collateral against the $200 dollar credit card they gave you. They won't allow you access to the $200 you deposited. This is thier insurance since you don't have existing credit history. Odds are they will report this credit card they gave you to the three credit repositories, Equifax, TransUnion and Experian, which will start building your credit. Most of the time after 6 months to a year of good payment history they'll release the $200 dollars back to you and up your limit.

What Mindy said about keeping your balance owed on the credit card (what the bureaus consider a revolving account) to no more than 30% of the high credit limit is spot on. Vist myfico.com for more detailed info on what your credit score is comprised of.

Good luck!

No guarantee here but I'd suggest looking into your local credit union to see what options they have for HELOC's. I've found that credit unions tend to look a little closer at your individual situation versus most banks that have strict guidelines you and your deal need to fit into.

Just a quick comment/thought regarding buying and holding raw land. I'm sure you're already aware but you'll have to pay yearly taxes on the land you hold. This may not seem like a big deal but if the property isn't generating any cash flow you'll be paying the taxes out of your pocket. This can add up quickly. There also tends to be a smaller pool of buyers for land than a SFR or MF property. If you finance the purchase of the land through a traditional source bank/credit union most will require at least 20% down. I'm not trying to discourage you, just share what I've experienced.

I've done several flips and have done almost all the work myself with the exception of new roofs and major electrical issues. Here is my reasoning for doing it myself.

I wanted to know how hard it was to do the repairs and what my time was worth.

Without actually doing the work and understanding how it's done I wouldnt know what to expect from a contractor. Doing the work myself has allowed me to understand what going forward I want to pay someone to do and what I'm better off hiring some to do for me. Things I'll do, painting, hanging doors, trim work. Something I'll always hire out, drywall work - that's an art and I'm no artist.

Knowing how to do the work and cost of materials also makes me better at estimating repairs on potential properties. I dont need to rely on getting a contractor to give me a bid.

Going forward I know what aspects of the job I'll hire out and which I'll do. As a previous poster said your time is valuable though. Saving a few bucks when you should be sourcing your next deal might not be the best use of your time.

+1 for having a real estate license. Although being a RE broker isn't my full time job I've had my license for 14+ years. I agree with all the points made by the previous posters in favor of having a license. I'll add a couple additional below.

Having a license allows me access to the MLS which is where I've found many of my deals. When contacting the listing broker on these properties I'm interested in I feel they tend to take me more seriously when they know I'm a broker myself. They know I understand the buying process from start to finish which means it will be an eaiser overall process for them and the seller. I also feel that as a fellow RE broker they tend to share additional infromation about the sellers situation that a normal buyer wouldn't get. I know I've had some listing brokers push my offers for the simple reason they want to work with someone who will make thier life easy through the buying/selling process.

Here's another twist that can give you the competitive advantage when purchasing a property listed with another RE broker. As Jason Hastings mentioned you can save yourself 2-3% when selling a property yourself. The flip side to that is you can also make 2-3% when you buy and represent yourself.

So, what I've done in extremely competitive situations, or when I just really want the property, is call the listing broker and say "I have a RE license but don't do it full time. I was wondering if you'd be willing to represent me on your listing?" I tell them I don't want the commission, they can have both sides. In Washington state that means they'll be making an additonal 2.5-3% commission (in my market that's easily 6k-9k). This get's them motivated to see that my offers accepted. Or knowing that I'm going to make a commission off the deal if I represent myself on has allowed me to pay more (since I'm getting the commission myself). ***Please note there are laws regarding dual agency (when the RE broker represents both parties) and some brokers will refer you to another broker in thier office for representation.***