Best Way To Repair Credit, and Reasonable Expectations

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Vermonster
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Re: Best Way To Repair Credit, and Reasonable Expectations

Postby Vermonster » Wed May 06, 2015 4:14 pm

protechig wrote: If I do end up wanting to go for a better card, like an entry level Chase card - how long should I be waiting? I know I have late payments, so I should wait what 3-6 months of consistent payments until applying?


It all depends on how many lates you have. They will stay on your account for a long time. I have 2 that are 28 months old and they are still affecting my score. They might not be the sole reason for denial now, but you can be sure they are a part of every denial letter.
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protechig
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Re: Best Way To Repair Credit, and Reasonable Expectations

Postby protechig » Wed May 06, 2015 10:14 pm

CarefulBuilder14 wrote:
protechig wrote:The plan is to purchase a multifamily unit (or a single family unit and convert it to a multifamily - if it makes fiscal sense). I would then live in one unit and rent out the other 3. While i'd still want it to be cashflow positive, while being rent free for me, i'm not overly concerned about the profitability perspective.

Also keep in mind that real estate is not really a passive business. Pipes break and some people pay late, don't pay at all, and/or make you go through the courts to evict them. The frequency and intensity of problems will somewhat depend on your state laws and whether they favor tenants or landlords.

Sure, you could hire a property manager, but that's no guarantee of success and will cut deeply into your profits.

You say you're also running a business. Being a landlord, too, may not be right for you. Rental income provides diversification and a steady return, but takes up a lot of time.


Thanks for your response. And yes, I know what you mean by that. My goals are more diverse than just real estate, but I want REI to be a major part of my portfolio. This house, i'll be living in one of the units, if pipes break i'll be dealing with that whether there are other tenants or not.

I live in Philadelphia, and, compared to other major cities, have favorable housing laws for landlords. Realistically I can evict someone in 30 days. I will also be very selective with tenants since i'll be living in the same building.

protechig
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Re: Best Way To Repair Credit, and Reasonable Expectations

Postby protechig » Wed May 06, 2015 10:19 pm

Vermonster wrote:
protechig wrote: If I do end up wanting to go for a better card, like an entry level Chase card - how long should I be waiting? I know I have late payments, so I should wait what 3-6 months of consistent payments until applying?


It all depends on how many lates you have. They will stay on your account for a long time. I have 2 that are 28 months old and they are still affecting my score. They might not be the sole reason for denial now, but you can be sure they are a part of every denial letter.


Thanks for your response:

I have the following:

Capital One - 1 30-59 day (recent)
Credit One - 3 30-59 day (1 in 2013, one in 2014, and one in 2015)
Paypal (close) - 1 90-119 day (recent)

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CarefulBuilder14
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Re: Best Way To Repair Credit, and Reasonable Expectations

Postby CarefulBuilder14 » Wed May 06, 2015 11:30 pm

protechig wrote:Thanks for your response. And yes, I know what you mean by that. My goals are more diverse than just real estate, but I want REI to be a major part of my portfolio. This house, i'll be living in one of the units, if pipes break i'll be dealing with that whether there are other tenants or not.

I live in Philadelphia, and, compared to other major cities, have favorable housing laws for landlords. Realistically I can evict someone in 30 days. I will also be very selective with tenants since i'll be living in the same building.

Also...to paraphrase that investor, being a residential landlord makes you cynical and risk-averse. It's not conducive to being charming, but it does have some upside. Those traits are helpful when financially aggressive and optimistic investors blow up in a bad market. It's nice to see someone you don't like have to cancel his country club membership due to financial hardship.

Rental real estate isn't just a way to generate cash flow - it's a way to save money aggressively (in the form of equity), to have the value generally keep up with inflation, and provide you with some income.

And keep a lot of cash on hand. You can need a new roof sooner than you think.
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protechig
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Re: Best Way To Repair Credit, and Reasonable Expectations

Postby protechig » Thu May 07, 2015 11:27 pm

CarefulBuilder14 wrote:Also...to paraphrase that investor, being a residential landlord makes you cynical and risk-averse. It's not conducive to being charming, but it does have some upside. Those traits are helpful when financially aggressive and optimistic investors blow up in a bad market. It's nice to see someone you don't like have to cancel his country club membership due to financial hardship.

Rental real estate isn't just a way to generate cash flow - it's a way to save money aggressively (in the form of equity), to have the value generally keep up with inflation, and provide you with some income.

And keep a lot of cash on hand. You can need a new roof sooner than you think.


I agree, I am interested in residential real estate for both the equity and (potential) profits of owning a home. I am very young (22) and If I can purchase properties over the next several decades I can retire with a large passive income (when the mortgages are paid off). I have very lofty goals in life, but for now i'll keep it modest in getting my first home )

My mentor is a very successful entrepreneur and real estate investor, and i'll be using his guidance to purchase this home.

Thanks,
Zach

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Re: Best Way To Repair Credit, and Reasonable Expectations

Postby flan » Sat May 09, 2015 8:33 am

amex007 wrote:
rockyrock wrote:6. Do try to negotiate with creditors/collections to have negative entries removed as part of your payoff agreement. This isn't likely to work but can't hurt to try.


Why do you say its unlikely for a PFD? Just curious.
It used to be that paid collections still remain on your CR for the rest of the 7 year period but i hear that now it's changed that once you pay off the collections, it doesnt show up anymore. Thus not penalizing those who have made an effort to settle their derogs.


Paid collections are ignored in some scoring models. They are not in fico 04, which is what everyone uses to underwrite mortgages, because Fannie and Freddie (who end up buying many mortgages) require it. If they ever get their ass off their ears, and use a modern score, then that would change. But they haven't, so paid collections still matter.

PFD depends on who owns the debt. original creditors dont' do it much, junk debt buying CAs often do.



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