Now is the time to order your free credit report – the one that shows your FICO score at each of the 3 major credit bureaus. Get it, study it, and then get busy working to get it all the way to the top.
Why? Because if you’re at all interested in becoming a real estate investor, the coming months will present the opportunity of a lifetime.
After being in real estate sales for 19 years, I can tell you that any time a market has a large number of repossessed properties on the market, you’ll find bargains. To begin with, those REO Officers can’t afford to keep those properties on the books.
In fact, there’s some kind of regulation that requires them to do all in their power to get them sold within just a few months. So in a tough market, when homes are not selling quickly, those properties will continue to drop in price just about monthly.
But that’s not all. When faced with the competition of these lesser-priced repo homes, the others have to follow suit or they’ll sit there unsold. Thus, the entire inventory of homes begins to fall in price.
I saw this happen over and over again, and that was during “normal” times. Now, with one in every 171 homes going into foreclosure during the second quarter of this year, the impact has to be even greater.
You, as a would-be real estate tycoon, stand to profit if your FICO scores are high enough. You can purchase one to live in and that will carry the lowest interest rate. For the others you’ll have to admit that you’re buying rental properties, but with a stellar score, even those rates will be favorable.
Stay away from the luxury homes. Focus instead on homes that can easily be rented to mid-range tenants. If you’re daring, focus on homes for lower income tenants as well. If the homes can be brought up to government standards, you can take part in programs that guarantee your rent and will even pay for repairs if your tenants damage the house.
Of course you should look for homes that are structurally sound and just need new paint and other cosmetic touches. Look past the dirt and the abandoned belongings, and see the profit that can be yours with a bit of hard work and a bucket of sudsy water.
I suppose I shouldn’t assume that repo homes will be dirty – but I listed dozens of them and only 2 had been cleaned when the owners moved out. The others were filthy. I don’t think I’ll ever forget walking into a house and finding a loaf of green bread in the middle of the living room floor.
Learning what’s in your credit report is the first step. The second is to raise your credit score as high as possible, and the third is to keep your eyes wide open for opportunities.
CreditScoreQuick.com
I will start it with an example as in you may be out of school, but that doesn’t mean you’re free from report cards. In fact, if you want to buy a house, or any other big-ticket item, a lender will look up your “grade” as soon as you come knocking. That grade is your credit score.
There are many varieties of credit scores available to lenders. But the most widely used for large loans are good credit score, which are based on a scoring system developed by Fair, Isaac & Co. Following are five things you can do to boost your creditworthiness, plus more information on obtaining your personal score.
1.) Review your reports from all three credit bureaus for accuracy once a year as well as several months before applying for a loan.
2.) Paying your bills on time is always a good practice, and it’s especially critical that you make prompt payments close to the time you need a loan.
3.) A heavily weighted factor in your FICO score is how much money you owe on your credit cards relative to your total credit limit. Generally, it’s good to keep your balances at or below 25 percent of your credit card limit
4.) Pay off debt rather than moving it around i.e. since the ratio of your credit card balance to your credit limit is key, closing out an account and transferring the balance simply means you increase that ratio, which is likely to lower your score.
5.) Don’t close unused credit card accounts near loan time.