May 2019 - Mayowa Oluyede Archive

Archive for May, 2019

Five Ways to Turn Bad Credit Around, and Invest in Property

It is a well-known fact that real estate investment is one of the best ways to achieve financial independence and sustainable wealth.

However, one of the biggest challenges would-be investors face is that it usually takes good credit rating and a strong track record to buy properties with the best lending terms.

Having a good credit rating is not only morally right, but it is also essential for raising investment capital. Although, I understand that life happens and things sometimes go south.

Bad credit doesn’t mean you can’t buy property as an investment. Fortunately, there are several ways to get around raising capital regardless of credit barrier and get into property investing. In this short piece are some of the best tactics you can use for buying an investment property with bad or below-average credit.

Five ways to get around bad credit for investment in property

1. Find a co-signer.

If you’re buying an investment property for the first time and can’t get a loan, you might be able to find someone to co-sign.

A co-signer effectively acts as a guarantor of your loan, putting his or her credit up for you. If someone with better credit than yourself, such as a close friend or family member, is willing to co-sign on loan, you can take the opportunity to build your confidence as you repay it.

Of course, you want to be sure that you can repay, even if the property fails to generate a return right away. Failure to meet your monthly payment obligations will not only negatively affect your credit score, but that of your co-signer as well.

2. Form a partnership.

Even if you can’t find someone to co-sign your loan, it doesn’t mean you can’t still use another person’s credit to facilitate investment. Consider finding another person who would be interested in real estate investment and partnering with him or her. Although this approach will require splitting any profits with your partner, it’s an easy way to get your property investing career off the ground.

3. Start with a distressed property.

Borrowers with lower credit scores are usually ineligible for loans that would cover the average price of a single-family home. Despite this, you might still be able to qualify for a loan that would cover the cost of buying a distressed property that can then be renovated and flipped for a profit.

From there, you’ll have to put in the work of repairing the property and making it livable. Though this method certainly requires more labor than investing in properties in better condition, it offers a substantial upside of requiring much less capital up-front. If you find the right property to renovate, you can even turn a very significant profit on the time and effort you put in.

4. Save a sizeable down payment.

Borrowers with poor credit history can still sometimes secure loans by putting up a larger than average down payment. If you can pay 20 percent or more up front, you are likely to qualify for loans that are above what your credit score would generally justify.

Putting a large sum of money down shows lenders both financial stability and an ability to manage money by saving it over time. Though you might still have a higher-than-usual interest rate, a substantial down payment will usually get banks and other lending institutions to consider you for a loan seriously.

5. Invest in a Real Estate Investment Trust (REIT)

Even with these different tactics for buying an investment property with bad credit, there will still be some people who cannot afford to purchase real estate. For these people, though, there are still good options that involve real estate investment.

Rather than buying a property of your own, you can pool your money together with other investors in a real estate investment trust, or REIT.

These trusts combine investment money to collectively invest in real estate, particularly at the commercial level. Though your goal should still be to get into investment properties of your own, a REIT can help you earn money in the real estate market while you build up your credit or work toward using one of the other tactics described above.

Buying an investment property without at least a decent credit score is difficult, but not impossible. Use these tactics, and you should be able to start making money in the property market soon.

4 Things to Consider When Sourcing below market value (BMV) properties

In a recent post titled What is BMV in Real Estate? I explained that Below the market value (BMV) is a collective term used by investors and property investment experts to mean any purchase or investment made below the market price.

Often, BMV properties are good deals that have the potential to be profitable because of the ability of the investor to get these properties at a cost that is lower than the supposed going rate.

Although, “there are two types of BMV properties: those that make you money, and those ignored because they are money-draining duds.

The truth is, it is not all properties that are buyable at below the market value price that are significant investments.

“Some of them are cheap as chips for a reason!”

In this article, I’d like to share four things to consider when sourcing BMV properties:

1. Make sure that it is a cash-flowing property

“An excellent property investment needs to pay its way, so make sure that any property you consider purchasing is going to be cash-flowing.

For example, it is possible to pick up cheap, high-quality properties in remote parts of the UK. These could have the most enchanting views and most beautiful designs, but the likelihood of you selling them on or renting them out quick is unlikely.

Even properties in apparently desirable areas can cause unexpected selling problems, such as a lack of hungry tenants or low rental prices in the city failing to cover the mortgage.”

Remember – “No rental demand, no tenants. No tenants, no rent. No rent, no money.”

2. Seek out hungry sellers

“Properties that have been on the market a long time is likely to have a willing seller.

On apps, such as Zoopla, check the “most recent” listing backward.
If you combine evidence that similar properties are available for rent in the local area with the fact that the property has been on the list for a long time, you are likely to find a motivated seller.

Any property not viewed on a property website or app for a month or more suggests that the seller is going to be more open to lower offers because the longer their property is on sale for, the more it will cost the seller.

A seller’s keenness – or even desperation – to sell their property offers you plenty of leverage.”

3. Don’t buy homes that need too much work done

“Some property investors are so excited by a BMV price that they neglect to consider how much extra work the property is going to need before it can be rented or re-sold.

If you have great builder contacts, then a property that requires some work might be significant. However, there are risks involved when buying a run-down building, so make sure to hire a property investment consultant or a reliable surveyor to inspect the deal and detail any significant repairs or alterations needed.”

4. Don’t buy in the wrong location

“Buying in the wrong area is one of the most common mistakes that first-time property investors are likely to make. Many areas may have a reputation for being “up and coming,” with plans for better transport, a new shopping center, more significant funding, and many other exciting possibilities.

However, unless plans such as these become concrete, they can easily fall through.

Every investment carries risks, of course, but it is your role to minimize the likelihood of loss and increase the possibility of profits.

For that reason, avoid buying property in the reputed “bad” areas of town simply because of their low price tag, unless you have some serious evidence that it is going to make a worthy investment.”

Conclusion

“Buying below market value is finding a property for a lower price than other property owners are selling similar properties. If you can find a distressed seller, or any property that has been overlooked by other buyers due to lack of advertising or some other neglect on the seller’s part, do your due diligence, and get ready to make some serious money.”

If you would like to learn more or ask questions about how to find BMV property deals, you can book a free 30 minutes strategic property investment session with me here.

What is stopping you from owning a property in the UK?

I have a question for you, what is it that is stopping you from investing in real estate?

What is stopping you from buying that first property?

What is stopping you from increasing your portfolio, maybe you have one before, then you raise it to two or three, or perhaps you want to double your property portfolio from four to eight or ten?

What is stopping you?

Do you feel like there’s a roadblock?

Let’s talk about it if you desire to become a first-time property owner or you want to increase your portfolio.

I know you’ve been thinking a lot about this, but I want you to stop thinking and start doing because it is possible for you to own your property in this economy.

If you have a good job, a good income, and you live in the United Kingdom, it is possible for you to be a first-time owner.

If you desire to own your first UK property between 60 – 90 days, we can make this happen for you.

Stop thinking, and start acting.

If you want us to get on this journey together, we will show you that it is possible for you to be a property owner in 90 days.

But if you are an investor who has bought 1, 2, 3 or 5 properties before but wants to understand how to accelerate their investment and double their portfolio, please drop me a message to ask for my calendar because you qualify to schedule a free one-hour session with me.

I will show you practical and effective strategies that will help you accelerate your returns, and be tax efficient in this modern economy.

I’ve head people say that “Buy-to-Let is dead,” “There’s Tax,” but when there is a will, there is a way.

So, let me know what you think, drop me a message to ask for my free 1-hour strategic property investment session.

It’s not complicated, all you need to do is send me a message, ask for my calendar, and we schedule a suitable time to take you to the next level.

I look forward to hearing from you, but until then, keep serving God. Keep living life to the max. Keep helping as many people on your journey to prosperity

Mayowa Oluyede