Buying Rental Properties – The “NO Credit” Strategy! There is this illusion of buying rental properties that you need a large sum of money, your credit needs to be high, or prove to the bank that you have a decent net worth to secure a loan. All of which are true! It would require you to get a job, work for a very long time, build up your credit, and save money up for a down payment, which would take years to do. Another way is to use other people’s money (OPM) for buying rental properties, even that would require you to have assets to prove your worth! BUT thankfully, there are ways around the bank for buying rental properties and it’s been a very powerful strategy for us buying rental properties with NO CREDIT.
OWNER FINANCING also known as SELLER FINANCING, it’s where the Owner of the rental property you are buying plays the role of the bank. There are several benefits of owner financing for both buyer and seller when buying rental properties. This way, you don’t have to work a job for several years and save a ridiculous amount of money! (benefits of buying rental properties)… Also if you heard of using other people’s money (opm), you would still need to work with a bank to secure a loan, the bank will still want to see your financials to prove your worthiness of the loan since you are the managing partner making it harder when buying rental properties. A huge benefit of seller financing, as you the buyer, you don’t need that great of a credit score, you have nothing to prove to a bank (again great for buying rental properties). Now you are probably wondering if a bank puts you through underwriting to mitigate the risk of lending to you, wouldn’t a property owner do the same when buying their rental property? Yes, but it doesn’t need to involve your credit! In fact, it would be more enticing for the seller to have some type of collateral if you default. For example, if you defaulted on the loan, the seller could take the property back! Now that’s one major form of collateral when buying rental properties!