In this episode, I continue my month long All-Star Q&A Series. All month, I am asking some of the most incredible real estate investors that I have interviewed over the past seven months questions that I commonly get from new real estate investors. This is an incredibly powerful series and I am really excited to bring it to you. We are continuing the series with the following question: what is the best strategy for securing funding?
Ben is an incredible buy-and-hold investor here in the Midwest, and he’s been brutally honest in answering our questions without sugar-coating the difficult aspects of being in this business.
Ben emphasizes that he is a creative finance guy, and he reminds us that he talks about all these issues in detail in his program, Cash Flow Freedom University.
Most importantly, Ben talks about the importance of relationships.
Before you try to borrow money from a bank, you must do your homework and know their criteria for loan eligibility.
If your credit is so bad that you can’t even get a loan from a bank, why should a seller finance a deal to you? Ben knows his opinion might be unpopular, but he strongly believes that if your credit is truly terrible, you shouldn’t be buying property in the first place. You would just be stuck wholesaling or partnering with people.
But if you are going to buy property, Ben suggests using anything you have to finance your deals: a line of credit, equity tied up in a house, a boat, car or motorcycle you have sitting in the backyard. For example, if you happen to have a boat, you can try to get money against it from a bank, you can try to sell it, or you can even look for a real estate seller who is selling because he wants to buy a boat! Always look for opportunities!
Even though Ben really insists that you must have good credit to start buying property, he does mentioned that he did his very first deal with a fairly low line of credit by finding a partner. But even though his credit wasn’t great, he did have the capacity to put the property on the line of credit and then take a few years to find a way to rehab it. If your credit is so bad that you can’t even do that, you must start saving money and improving your credit before you get started in real estate.
Ben really knows his stuff and I hope you learned a lot from his no-holds-barred advice!
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