Bad credit can be a killer when it comes to acquiring property. In part two of our interview with Dean Welch, property investors Marcela Hede, Naomi Marquis, and Francine Marquis, grill Dean further into how to obtain property funding even when the banks are unwilling to lend you money for your projects.
For those with bad connections, we’ve written up the interview in note form below the video. However when you have time and a stronger internet connection, listen to Dean Welch deal with our last minute interviewers (you may get more out of it).
The notes from our interview with Dean are below the video.
The best alternative source of finance
If you have bad credit, you need to look at other financing options. One alternative financing option is a lease option. A lease option has two benefits:
- The lease option will help you to build good property credit
- The lease option will help you to get into property with less up front finance
Remember, you need to ensure that you have the full property acquisition amount required when the lease term comes to an end. For example, if the agreed value of the property is £100,000 pounds and you acquire the property on a ten-year lease option at £1,000, then you will need to pay the full £100,000 at the end of the ten-year lease.
A lease is also a great option to help you build credit. If you spend a year paying a lease on the property, the banks will see that you can handle debt well.This means that you’re a good investment for them.
Lease options can be difficult to find in some countries. For example in the UK residential market, many sellers and solicitors do not have sufficient education to execute on a lease option. Conversely in the UK commercial property market, lease options are a great way for companies to sell and purchase their office blocks.
How to find your first lease option
To help with this particular challenge, Dean shared some great advice on how to find lease options in the residential market.
The first port of call would be to talk to family members. A family member may have recently inherited a property that they don’t know what to do with, or maybe they simply don’t want the hassle. In general, if you’ve got on well with your family members, they will want to do their best to help you in your life journey, so your bad credit rating will not be as relevant to them as an institutional lender.
Similarly, property investors may give you a lease because if you can’t keep up with the lease payments, then they get to keep the property and the lease that’s already been paid.
Millionaire by accident
Finally, Dean offered his perspective on becoming a millionaire. A huge part of becoming a millionaire isn’t actually about the bad credit or the money that you have. Becoming a millionaire is more about the skills that you acquire on your business or property journey. For example, if you buy a house to fix-up, you learn how to manage people and a property.
The secret in Dean’s book and talk millionaire by accident is that becoming a millionaire doesn’t happen accidentally. You need to change yourself and work hard at it every day. Focus on building your skills and the money will come.
Huge thanks to Dean, Marcela Hede, Naomi Marquis, and Francine Marquis for helping us create this video of Dean’s insights. If you found Dean’s story useful, do Like the video and subscribe to the channel for more property and financial insights and strategy.
And if you’re feeling super generous, do write us a comment and share the article with your friends to help them become motivated and inspired too.
In the meantime, if you enjoy reading about people’s property success stories check out the following articles:
- Property strategy and finding funding part one with Dean Welch
- Dean Welch’s property blog
- Property secrets of a 26 year old millionaire school dropout – Ryan Windsor
- 23 jobs to becoming a property millionaire by age 23 – Stephanie Brennan
- Money or Passion – Regan Anne Hillyer
If you are starting on your own financial freedom journey, you will find the following articles from our library helpful in spring-boarding you into your life’s dream.
- Achieve any dream with buckets of rubble
- Turn your dream into reality in four stages
- The seven deadly sins of business owners
- Five simple actions that provide a major life boost
Finally, if you are interested in the lessons from other successful people who attended the JTFoxx family reunion event check out the following articles:
- Bleeding is part of success – Paul Kanofski
- Fear induced obstacles to success – Damien Elston
- Solve this Japanese Multimillionaire’s Secret Riddle – Chris Okazaki
- Money or Passion – Regan Anne Hillyer