It’s not very often that I come across an investor who has poor credit these days. The majority of the investors I pre-qualify are sitting nicely with credit scores in the 700s. While it isn’t absolutely necessary for your credit to be this high, it definitely helps quite a bit. This shows you’ve taken good care of your credit and having a solid score speaks highly to your credibility and makes the banks feel much more comfortable. But, having good credit isn’t always a golden ticket.

What the gurus won’t and don’t tell you is that using your credit wisely to purchase investment properties takes time and planning. Go out and purchase 10 investment properties over the next six months and expect several things to happen:

1. Your credit score to dive bomb.
2. Higher interest rates with each new property.
3. Less chance of lenders financing you with each passing deal.

Investors have had very unrealistic expectations for acquiring financing, and therefore are very frustrated when things aren’t going their way.

If your mortgage broker makes everything sound very easy and has very little caution for you, it’s likely he/she is:

1. Shady.
2. Selling you.
3. Mistaken.

Or all three…

If you value your credit, make sure you’re dealing with someone who knows what they’re talking about and ask tons of questions. Listen to their advice and let it settle before you make foolish decisions.

Tuesday’s Tip: Golden tickets are for Charlie and the Chocolate Factory. Use your credit wisely.