1. Get a Hard Money Loan
Getting a loan from a hard money lender is a great option for real estate investors with bad credit or less than stellar credit. Despite its name, “hard” money isn’t hard to come by its actually suer easy — it’s literally anywhere you look it seems like.
Hard money lenders are private firms or individuals or or even a group of friends who offer short-term loans that are backed by real estate. These lenders are only interested in investment deals — they aren’t funding someone who wants to buy a house to live in typically.
The best part is that hard money loans can give you funds very quickly — often, within days.
That’s why so many real estate investors use this source.
They’re quick, painless, and easy to turn around.
Hard money lenders don’t consider credit scores as the “be all, end all.” They can determine who they lend to and what those loans look like. If your credit score is good, GREAT!
But if not, your application is still more than welcome. The majority of the time, hard money lenders only care about one thing: if the deal is a good deal.
Their main concern is the value of the home. If the numbers work, they’ll more than likely fund the deal, whether you walk in with a 780 credit score or not.
A hard money lender will use the property as collateral. If you don’t pay them back, they take ownership of the property. That’s why they care about the numbers.
If you bottom out, they’ll still make money.
So, if you have a solid deal on your hands with good profit potential, a hard money lender will likely fund it — even if your credit score is just . . . eh.
#2. Look For Private Money Lenders
Another funding source to consider is private money lenders
Private money can come from anyone looking for a return on their investment. This can be anyone from a structured lender to a friend, relative, business partner or acquaintance.
Even if your credit score isn’t great, private money lenders can still lend to you, often with competitive terms. The quality and value of your deal are much more important to a private money lender than your credit score.
Private money lenders don’t abide by a certain set of rules. So repayment terms, interest, and everything else is up for negotiation.
And because it’s that person’s own cash, they decide whether or not they run your credit.
If you can show your deal has value and that you can close quickly — and make a profit quickly -- private money lenders can overlook dings on your credit report.
#3. Consider Wholesaling/Flipping via an option to purchase.