Entering The World Of Real Estate
After Bankruptcy
By Peter Vekselman
The author has permitted the reprinting and redistribution of this
article.
If you’ve personally been touched by the pain and
embarrassment of bankruptcy you may think that your life will never be
the same again. You may also believe that real estate investing is a
thing of the past because lenders will forever consider you to be
damaged goods. Fortunately, life does go on and you will recover from
this. However, it will take time before some lenders will consider
lending you money for your real estate investing activities, although
you do still have options. Here are some steps you can take today to
begin the recovery process – while you invest.
Credit won’t be as readily available to you, so the first
order of business for you will be to try to quickly build some positive
credit. There are several good ways of doing this. Here are just a few
• Secured Credit cards – After a bankruptcy your
personal credit rating is in the tank. Most traditional credit card
companies – even those that charge an annual fee,
won’t want to touch you right away. However, it
won’t take long for them to be willing to take a chance on
you. You can grease the credit wheels by getting a secured credit card,
which is simply a savings account with the issuing bank with a deposit
equal to your credit line. By requiring this deposit, the issuing bank
has some assurance that they’ll receive the lion’s
share of their money in the event that you default. You’ll
want to utilize the card regularly and pay at least part of the balance
off each month in order to generate positive credit report entries on a
monthly basis.
• Personal loans – By going to one of your local
banks and explaining that you’re trying to re-establish
credit after a bankruptcy you should be able to convince your banker to
lend you a small amount of money, say $1,000 or so, backed by a
corresponding savings account or Certificate of Deposit (CD) account.
You’ll be paying a small amount of interest for the
privilege, but the expense you’ll incur will be well worth
the points your credit score will gain.
• Credit aging – Do you have a family member or a
friend that would be willing to add you as an authorized user on their
credit card account They don’t need to actually give you a
card to use; the simple act of adding you as an authorized user will
give you the benefit of “hitchhiking” off of their
payment history.
While you’re implementing some of these credit rebuilding
strategies, you should also be actively investing in real estate.
Traditional avenues of financing will be off-limits for awhile, but
there will be numerous avenues you can utilize that will make real
estate investing not just a possibility, but a certainty
• Bird Dogging – As a bird dog you work as a real
estate scout, doing the leg work of locating available properties for
investors who will actually close the deals. You won’t be
placing these properties under contract – your job simply
involves sniffing these properties out and letting the investor know
what you’ve located. When he or she closes the deal
you’ll receive a “finder’s fee”
for the project, which puts cash in your pocket and gives you
practical, real-world real estate investing experience.
• Wholesaling – This is a step up from bird dogging.
You take the same steps of locating the available properties, but you
also incur more risk by placing the property under contract and
“selling” your contract to another investor for a
profit. Depending upon how good you are at this, you can realize a
substantial income by wholesaling.
• Partners – Your credit may be badly bruised
temporarily, but if you stay motivated you can find partners with cash
to lend on a real estate transaction. You can utilize partners for
their cash for a short term loan for buying distressed properties at
rock-bottom prices, rehabbing them quickly, and re-selling them for
below market prices for a quick profit – and a fast payback.
There’s also a possibility that you can find investors that
are looking for an ownership stake and a portion of the cash flow
generated by properties in which you invest. You can locate prospects
among your family and friends, your local REIA meetings, or even by
advertising on Craig’s List.
• Private Money lenders – You can also locate
private individuals that have cash they would like to invest in real
estate. If the deal is sweet enough, they’ll lend you money
for your real estate investing activities in exchange for an equity
stake or a quick payback.
• Hard Money Lenders – As your credit score
increases you’ll also be able to turn to hard money lenders
for financing. The terms aren’t very good, but if
you’ve found a truly good deal on a property it
won’t matter. Plus, these loans will show up on your credit
report which will allow you to qualify more quickly for institutional
financing.
The steps you can take to rebuild your battered and bruised credit
report after a personal bankruptcy are limited only by your imagination
and your willingness to work hard in achieving your real estate
investing dreams. So go ahead, get moving today and begin the process
of rebuilding your credit score and building an investment portfolio.
If you have limited real estate investing experience or
you’re not sure what other techniques you can utilize in
coming back from financial disaster, consider finding a good real
estate investing coach who can show you the ropes and teach you a
multitude of techniques that can ramp up your career and have you on
the right track in no time. Success is yours for the taking, but you
need to get started to reap the rewards. Get started now!
Peter Vekselman has been successfully investing in real estate since
1996. He has completed over 1000 real estate deals, owned a
construction company, been a private lender, and owned a property
management company. Peter currently works with clients all over the US
httpwww.CoachingByPeter.com .
If
you would like to take advantage of the market and learn how to invest
in real estate and you are local to the Dallas Fort Worth area, I know
a really great teacher and mentor here in Arlington Texas. Please take
a look at his web site: DennisJHenson.com,
Dennis has a great Mentoring and training program, I know because I am
one of his former students. I learned a lot from his one on one
teaching technique. - Michael Harman 817-457-7572
mchfun.business@gmail.com
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