What's up real estate maverick? Kris Krohn here. And today we're talking about
how to buy real estate with bad credit or with no credit? Like seriously, how do
you make it go down? I've done it thousands of times and I'm going to show
you right now how.
Alright. What's up my friend? So, what I want to do today is I want to talk about
how you go on to actually buy real estate if you have bad credit? If you
don't... Maybe you just have credit that you can't use. In fact, there's different
reasons. And I want to start with that. What are some of the reasons why people
actually can't get along? One of them might be... I'm going to put some of these on
the board here for you. Some of it comes down to number one. You might have had a
job in an industry for less than 2 years. So, when a bank actually does a loan
with you, they actually want to do that for someone that they think has future
potential of having the same earning power. Which means if you've had a job
for 2 years or if you've added a switched job but it's been in the same
industry, you're going to be good to go. So, I think that's something that's
really important. Reason number 2 why you actually might have a hard time
actually getting a loan, it could be that you're on commission. And you don't have
enough stable income. And banks, you know, they prejudice that stuff. So, they might
literally say, "We're actually not going to give you a loan for that reason alone."
The third reason that people sometimes can't get a loan is because they
actually have bad credit. Now, this is something that if you don't know this, I
want to help you understand this. You need to know that if you ever have your
credit used on a payment for a car or credit card or whatever, if you miss a
payment, you need to treat that like it's liquid death. Like my whole credit will
get ruined if I am late on a payment or I don't make a payment. That is actually
going to roast your duck and hurt you. The good news is that we can fix that
and you're going to be okay. But it can take months and years to
actually get credit where you want it to be if you're doing it organically versus
actually hiring someone. So, I guess the first rule that you want to be aware of
is do everything in your power to avoid getting bad credit in any way shape or
form by missing a payment. If you miss a payment, do everything you can to fix it
and rectify it and get credit repair. Because your credit has value if you're
using it to invest. Now, you've got credit. Either your commission job or you
haven't had a job long enough. And all the sudden, it's like, "Wow, I actually
can't use my credit any more to actually buy a house. So, I guess I can't invest."
Listen very carefully. When I was 26 years old, I graduated college and
came financially free. And that's because I had every excuse in the world to fail
but I refuse to give up. So, literally when I was a young dumb college kid, I
made the choice that I was going to figure out how to buy real estate. And
even though it took me just over a year to get my first house, I'll tell you my
circumstances. I didn't have bad credit, I had underdeveloped credit. Here's what
underdeveloped credit means: Number 4, you might actually have to develop your
credit. And how you develop it is you need to get a minimum of 2 or
preferably 3 trade lines. Which means you've got to get 2 or 3 credit
cards. Now, if mom and dad have said, "Credit cards are bad or evil. Or we're
scared that you're going to use them irresponsibly", listen. Get a credit card, I
don't care if it has a 200 dollar limit. Use it and then pay it off every month.
You do that for 2 years and a bank says, "You know what? This person has a
history of being responsible with credit." So, I actually had to develop my credit.
My first game plan to get my first house, it was a 14 month process. Now, in this
video, I'm actually going to give you an ultimate shortcut. And actually shot
another video that you're going to really appreciate at the end of this, it'll show
up in this corner over here. That will show you how you can move forward on
buying a home that doesn't even take any money. Doesn't even take any credit. But
before I do that, here was my 14 month process. I had only had a credit card for
10 months. And they said you needed 2 years. And by the way, I needed more
credit cards. So, I had 2 credit cards. I got a third one. And I would rack him up
a little bit and I would pay him off every single month I never kept any of
that debt on there. And over 14 months, I also saved up $5,000. Because buying a
primary residence and a three and a half percent down payment required $5,000. A
little less than that for purchasing my first house. So, literally the 14 months
before buying my first investment property, all I was doing was using a
credit card, paying it off and then being a good saver. That's it. Those are the
only 2 things. and you know what that was enough for 14 months later for me to
get my first house. By the way, I got turned down by multiple banks and I
finally found one that said, "Fine." In fact, the bank that I had been using since I
was 16 years old turned me down. Do not get discouraged. Do not let anyone tell
you what you can or can't do. Never take advice from your bank account.
Never take advice from your credit score. This is not who you are it's not your
financial identity. It's just a circumstance that you find yourself in.
If you made a mistake, learn your lessons and commit to change. But in the meantime,
let me give you the hack on how you can actually buy a house if you don't have
good credit or usable credit, I should say. This is something I do on a regular
basis. I want to tell you how I develop this strategy and then I'm going to break
it down for you. Very first time I got stuck where I wanted to buy a house and
I couldn't use credit. I had already bought a few homes myself. My
father-in-law Matt had used his credit to buy a bunch of homes. And once he got
about 10 homes on his credit, the banks are like, "Hey, you make good money, your
real estate is profitable. But guess what? We don't have a program that will get
you in eleventh or twelfth or thirteenth home." I'm like, "Dude, we're slaying it.
what do you mean that you won't let us have more homes? We want more homes." And
so, what I did is... Listen, I'm not getting this from any program, I kid you not. I
actually made this crap up. But I did my due diligence and I found out that it is
totally legal and kosher. What I basically did is I said, "Hey, Matt. You've
got the money for buying the next house. I have the ability to find the next
house and manage it. So, all we're really missing is someone's credit." And what we
basically decided to do was rent somebody's credit. I want to show you
what renting credit actually looks like. Check this out. I went to some buddies of
mine and I said, "Hey, I will pay you $2,000 cash if you'll allow me to use
your credit. What we're going to do them when we actually go to sell the house
which will probably be, I don't know, let's call it 5 years later, we're
also going to give you additionally 5% of the proceeds that we make off of the
sale." So, no cash flow along the way. They
actually got to pick up some tax benefits. Because it was on their credit
and we let them carry some of that. But these 3 things. So, I went to a bunch
of buddies and I basically said, "Let me use your credit." And and then afterwards,
once all 3 of them were pre-qualified they had good jobs, they
had good credit, good FICO score. and banks said yes to all of them. We went
out then and we bought our next slew of homes. Well, when we bought the house, we
just said, "Here's $2,000 that we're giving you. When we sell the home, we're
going to give you five percent of proceeds". by the way we have since sold those
homes and we did that. They picked up tax benefits along the way. And guess what?
They literally made money for just having good jobs and good credit. One of
them about 3 houses and on average the 5% of proceeds of
profits, meant an extra 2, 3, 4 grand. So, they were making an average of
$5,600 per home that we bought. One of them bought
3 homes have made $18,000. Just for being credit worthy. Can
you imagine that for a moment? Like how cool is that?
That's pretty bomb. By the way, if you're watching this and you have a good
job for the last 2 years, if you spend less than you earn, if you're a good
saver and maybe you're putting away in a 401k or IRA and you've got great credit;
there's a forum below on this page and you can basically say, "Hey, Kris. I would
love to make $18,000 and helping you buy 3 houses." If
that's interesting to you, you'll find a form below. But that's really neither
here nor there. That's just a side thing. The point that I wanted to make for you
today is that there's always a way to get what you want.Iif the deal is
profitable if the deal makes sense, it's all about how you put yourself out there
so that you can make it happen. And you know what? It's amazing to me. I can
give you how to strategies all day long. But you know what? Knowing the how is not
what's going to make this happen. It's a part of the equation. The biggest part of
the equation is the real estate between your 2 ears. Which is how do you feel
about something? When I rented someone's credit for the first time, I was scared. I
was nervous. But it has made me millions of dollars. And so you've got to ask
yourself, most people won't have the level of success they want life because
they're too scared to do what it takes or they don't have the discipline to act.
And you need to understand this: Execution is everything. If you're not
executing, if you're not taking action; you're not going to get the benefit of
the thing that you want. What separates most successful investors
from investors that never get off the ground is action. In watching today's
video, I prepared another video for you that I
believe is going to help you take action. In fact, I documented exactly how I made
my first 1.6 million dollars. And then I created a series on how I partner with
people. So by the way, if you're watching this you're like, "You know what Kris?
I've actually got some money saved up. And I'm interested in what it would look
like to partner with you and access the best deals in the best markets." And
whether you have good credit or whether you don't have good credit at all, I have
the solution already built in for you and a team that will do all the work for
you. If that's interesting, I created a series called partnering. And the first
video is what's shown up right over here. I want you to connect and watch that
video. And what it'll do is it'll show you what it looks like to actually
partner with me. I've partnered with people all over the world. I help them
buy real estate. I solve their financial problems. I solved their creditworthiness
problems. And we go out there we freaking crush it in the game of real estate. So,
if that connects with you, if that's useful for you, then watch that video
next because that's where I'm going to give you the next steps of how you buy real
estate regardless of good or bad credit. Hey, thank you so much for watching today.
Do me a favor. Like this video. I want you to smash that like video. If you do, it
tells the YouTube algorithm that Kris has some content that's actually useful.
And if you agree with that, hit that like button you're actually doing me a favor.
If you're not a subscriber, take care of that right now and I will look forward
to capturing you on tomorrow's video or this one playing right now.