Is it possible to invest in real estate with a foreclosure on your credit report? And if so, what steps do you need to take to secure a loan? That’s the first question I’m answering on today’s Q&A episode!
On this episode, I’m answering three great listener questions on investing with a foreclosure history, putting properties into legal entities, and the best strategy for leveraging an active 401k. Click play to hear my answers to your questions on this episode of Investing in Real Estate!
On this episode you’ll learn:
- Options for investing with a foreclosure history.
- Why you should put rental properties into an LLC.
- What to do with an active 401k.
- And more!
Options for Investing with a Foreclosure History
A foreclosure is going to hang out on your credit report for seven years. However, don’t let that discourage you from your investing goals. A foreclosure history is not the end all, be all. I would suggest shopping around. As always, local banks and credit unions are more flexible and lenient than the big banks. I would expect to pay a higher interest rate in this situation, and possibly other terms on the loan for the lender’s protection.
Consider looking into non-recourse business loans as well. These loans are based on the merit of the investment, and less so on your personal credit history. A non-recourse loan can be an incredible wealth building tool for investors. Book a free call with my team to see if it’s a fit for you.
Why You Should Put Rental Properties Into an LLC
I’m not a lawyer or financial advisor, but I will tell you that in the long line of experts I’ve worked with throughout my investing career, every one of them has suggested LLCs for rental properties. The reason for this is strictly liability. If (or when) you get sued, it’s important to have that legal entity in place to protect your personal assets.
What to Do with an Active 401k
In general, I’m not a fan of the 401k. Although they are increasingly rare, I do think that a company match is a good reason to continue contributing to a 401k. If you find yourself in this position, you may want to consider taking a loan from your 401k to invest in performing assets.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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