How To Buy Real Estate With Bad Credit

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.


  • Yuvashankar Theivendran


  • Another day full of the great words of wisdom from our legend Kris.


    Private lender will lend to you without even checking your credit or income

  • Hey kris only just started watching a few days ago and I’ve been binge watching as realestate is the career pathway I wanna go down (living in Australia) currently going to do a course (entry level) to start up and what you’ve taught me so far is going to help so much for the future thanks kris, much love from Australia/New Zealand ❤️👏🏾

  • Aysha Chaudhry - Property Investing

    The job one is crazy to me. Wild that someone can get penalized for switching careers just because it doesn't "look stable".

  • When you got your first loan did they tell you how much you have to spend according to things such as income or did you tell them how much you were looking for

  • I had a question about one of your videos from last year I was wondering if I have to be 18 in order to join your club on the website

  • I'd buy houses doing a lease to own arrangement or do bond for deed. I'm trying to get my second property like that now. No interest principal payments only 7yrs maximum. Im doing this with no job, no income (but I have savings for reserves) & my credit score is 620. I may do traditional rental or Airbnb with the property.

  • Worst case scenario Chris. How do I explain to my potential credit renters. The fact that if things go south what do I have to offer them? Do you know what I mean?

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