Before applying for a mortgage, get a copy of your credit report and start fixing your credit. Create a well-written business plan and start gathering evidence that you make a good credit risk. Start setting aside money for a down payment and choose lenders carefully.
Before you start applying for real estate investment loans, there is some legwork you must do first:
1) Find out what sort of investment risk you are. Lenders evaluate your creditworthiness by pulling your credit reports. You are privy to the same information, so before you approach a lender pull your own credit reports from each of the three major credit bureaus. Look over the reports carefully, and if you need to start working on your credit, start working on paying down your debts and on making your bill payments on time around the same time you start researching your real estate markets. If you start researching and working on your credit the same time, by the time you’re ready to buy your credit will be improved and you’ll be able to get a better deal on your loans. Never approach lenders until you understand what your credit scores and credit reports are like.
2) Become a packrat. Start saving financial information. From tax receipts to your credit reports to other financial statements, hold on to anything that has to do with money. It can help lenders understand your financial situation and therefore offer you a better loan option, and it can help you understand where your own money is going and what you need to do in order to start having more money to invest.
3) Start writing. If you want to start applying for real estate investment loans, writing up business plans and proposals is a good start. Business plans, when well developed, can show lenders that you are serious about investment as a business. If you are dealing with lenders who routinely work with real estate investors, these lenders may put more effort and more focus on your business plan and then on your credit report. If you need help, it is a good investment to hire professional writers to write up your business report for you.
4) Start researching. Research lenders the way you would research markets. Figure out which lenders in your area work with real estate investors, which ones offer great deals, and which ones work with poor credit risks. Know which lenders are recommended by the real estate investors that you admire. This will give you a good list of contacts you’ll want to get in touch with when you’re ready to start applying for your loans.
5) Start saving. Even if it’s only a few dollars a day, get into the saving mindset. Not only will you have more money to put on a down payment on your real estate investment loans, but when investing, savings is a good habit to get into. Once you start making your millions from real estate, you will want to know how to hang onto your money.
