546 Need to get Investment Property Mortgage

[Anonymous]

Hey, let me say thanks in advance for any advice/sympathy/whatever. Here is my situation and hopefully this might serve as a good reference for any one else trying to a rental property.

Goal is to get mortgage to purchase Investment property.
Timeline is ideally in the next 6 months.

Per my research I need:
*minimum 630 FICO
*20-25% down
*6 months payment reserves
*2 years history of property income
*2 years W2 income

Here are my trouble spots:
*only 1 year W2 income
*median FICO is 546

I recently got my CR from EQ and TU (the EX site was sown for maintenance) and here's the damage report.

Negative accounts
3 secured CCs:
*BoA $782, paid in settlement, written off on 03/2012
*5/3rd $382, paid, closed on 11/2014
*Y-12 Fed CU $456, closed, $20 past due on 02/2017

1 Store CC:
*Kohls/Cap1 $433, charged off, written off on 10/2016

Payday loan:
*World Finance $990, past due on 12/2016

Auto loan (co-signer on lease):
*Kia motor finance $696, $256 past due on April 2015

Civil judgement:
*$4,000 ($350 remaining)

Hard Inquiries
*Appfolio Inc: 10/11/2016

*Kohls/Capone: 2/13/2016

*Cap One NA: 9/16/2015

*Sprint: 11/16/2015

(Also, had an FC with Suntrust in 2010 although it didn't show on either CR)

I've read about people writing letters to get the Inquiries removed and I have enough money to pay most of the outstanding amounts.

I'd really appreciate some feedback on 1) how to prioritize who I pay off first, and 2) any other advise on how to get my credit high enough for an non-owner occupied mortgage. Again, it would be ideal to get this done in the next 6 months.

[Anonymous]

I don't think you can get inquiries removed.  You only have four, so I don't think that's hurting you.  If you have the money, you should pay them if they are your debts.

[Anonymous]

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@Anonymous wrote:

Hey, let me say thanks in advance for any advice/sympathy/whatever. Here is my situation and hopefully this might serve as a good reference for any one else trying to a rental property.

Goal is to get mortgage to purchase Investment property.
Timeline is ideally in the next 6 months.

Per my research I need:
*minimum 630 FICO
*20-25% down
*6 months payment reserves
*2 years history of property income
*2 years W2 income

Here are my trouble spots:
*only 1 year W2 income
*median FICO is 546

I recently got my CR from EQ and TU (the EX site was sown for maintenance) and here's the damage report.

Negative accounts
3 secured CCs:
*BoA $782, paid in settlement, written off on 03/2012
*5/3rd $382, paid, closed on 11/2014
*Y-12 Fed CU $456, closed, $20 past due on 02/2017

1 Store CC:
*Kohls/Cap1 $433, charged off, written off on 10/2016

Payday loan:
*World Finance $990, past due on 12/2016

Auto loan (co-signer on lease):
*Kia motor finance $696, $256 past due on April 2015

Civil judgement:
*$4,000 ($350 remaining)

Hard Inquiries
*Appfolio Inc: 10/11/2016

*Kohls/Capone: 2/13/2016

*Cap One NA: 9/16/2015

*Sprint: 11/16/2015

(Also, had an FC with Suntrust in 2010 although it didn't show on either CR)

I've read about people writing letters to get the Inquiries removed and I have enough money to pay most of the outstanding amounts.

I'd really appreciate some feedback on 1) how to prioritize who I pay off first, and 2) any other advise on how to get my credit high enough for an non-owner occupied mortgage. Again, it would be ideal to get this done in the next 6 months.

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It's a nice goal to have, but I don't see it happening within the next 6 months.  I would start with the smallest amount and work my way up, assuming that the past due accounts don't go into collections soon and you get additional negatives on your report.  Table your goal for now and pay off what you owe, then try to maintain good payment history on what accounts are not in the process of being charged off. 

[Anonymous]

The recent lateness, charge offs, and finance (payday) account are hurting you very badly and will continue to hurt you for quite some time.

I don't think you can get to a 630 in 6 months.

I would try a pfd on the Kohl's, the payday loan, and the closed Y-12 secured card.

If you have limited funds, pay the payday loan off first!! That interest is probably destroying your wallet.

Also, I'm just a bit confused on your goal versus your current status. If you are looking to start investing in rental properties, I strongly suggest that following your debt payoff, you start by saving. As you read, it requires a hefty investment, and saving can teach about properly managing your finances. Owning property costs a lot of money far beyond the mortgage, insurance, and tax payments, and a colleague of mine at work who has rental investments frequently has to pay his own bills during their grace periods because of unexpected rental costs.

And of course, you'll need another year of w-2 income, too. ^_^

Do you have any positive tradelines currently reporting?

I think it's great to have goals, but it's even better to have patience and realistic goals.