Los Angeles Real Estate Investors say, when it comes to home equity, this is an alternative option for investors who have the option available for no upfront money on a home equity loan.

Today, this is a feasible option since property values have gone up.

This means there could be more capital available.

Los Angeles Real Estate Investors – Investor Decisions To Take

Los Angeles Real Estate Investors say, if you’re looking to capitalize on this route, there are usually two options.

You can rewrite the first mortgage and cash out refinance, or the first loan is kept in place and a home equity line is added.

When you get the option to buy, at times it’s known as a “lease-option,” this route helps to acquire properties without actually taking legal ownership.

Although, the investor has to sign a legal “option to buy” from the homeowner themselves.

What happens in return is the real estate investor rents the property out for a long term basis.

This is done by having an agreement in place to purchase the property at a set date.

Seller Financing

Los Angeles Real Estate Investors say, unlike conventional loans, seller financing is when the investor purchases the property from the homeowner/seller.

Both parties sign an agreement that states a set interest rate, repayment schedule and consequences if both parties default on the contract.

Even if you have bad credit you can invest in real estate.

Beginners seeking how to invest in real estate need to take the first step in understanding their credit score.

Your credit score is essentially a method for lenders to determine the probability of you actually paying the loan back.

Quality scores, obviously, equal better mortgage rates.

This results in long term savings, and ultimately ends up getting your investor benefits.

The Good, The Bad, And The Ugly

Los Angeles Real Estate Investors say, FICO Credit scores range from 300 to 850, and determine a person’s credit worth.

FICO Credit Scores:

  • Bad Credit: 300 – 600
  • Poor Credit: 600 – 649
  • Fair Credit: 650 – 699
  • Good Credit: 700 – 749
  • Excellent Credit: 750 – 850

There’s a couple of credit agencies that have their own evaluation system.

They’re more based on different factors.

Credit score calculations based on five factors:

  1. Payment History = 35 percent
  2. Outstanding Balances = 30 percent
  3. Length of Credit History = 15 percent
  4. Types of Accounts = 10 percent
  5. Credit Inquiries = 10 percent

Depending on your score, you could qualify for a traditional loan and be eligible for payment assistance.

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