Using creative real estate investing strategies, even people with a bad credit record can invest and solve their fiscal problems. Investors who have been refused credit by crediting agencies, but who are determined to make a change have several options using creative investing strategies, such as, lease options, dealing in notes, purchasing tax certificates, etc.
Bad credit real estate investing is possible when investors use lease options to make huge profits by just investing $5000 on the property! A lease option is an agreement where you have an option to buy the property you lease, where the purchase price of the property is fixed at the time of the agreement and a portion of the rent is credited towards the purchase price.
The investor should have a clear idea of the local market, should be able to estimate the property’s value taking into consideration the neighborhood, etc. Let us say that you have a bad credit history, and so are unable to get your hands on a large sum of money to make a down payment. You could try lease option by searching your area for an appropriate piece of property; it may help you to get a better deal if you chose a property in needs of repair, as you may get it at a lower price than its market value. It could work to your advantage if you could work on the repairs needed yourself.
Let us say the property is worth $120,000 and needs repair work for $4000, you can try, and get the property for $100,000 to be paid at the end of the lease term, negotiate that the repair work you are undertaking is credited towards the purchase price. You have to pay the owner a predetermined sum monthly in which one part is credited towards the purchase price. As you have the option to buy the property, try and find a buyer once the repairs (costing about $2000) are done who is willing to buy at the current market value $120,000. After deducting the cost of repairs and the carrying and closing costs, you could end up making a large profit!
Bad credit real estate investing is therefore possible if the investor is creative and clever to take advantage of the numerous opportunities available. Buying a tax certificate can also be a very good investment as certificates are available at nominal, modest sums and as there are no credit checks. Notes and dealing in notes can be a profitable venture for an experienced investor. Having a firm commitment to stay debt free and determination to succeed will help investors with bad credit history to reach their goals.
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Alexander Gordon is a writer for http://www.smallbusinessconsulting.com - The Small Business Consulting Community. Sign-up for the free success steps newsletter and get our booklet valued at $24.95 for free as a special bonus. The newsletter provides daily strategies on starting and significantly growing a business.
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