Bankruptcy can be a frightening word to a lot of people. Many people assume that if you file for bankruptcy and it is on your credit report and score then investing in real estate is just a pipe dream. This is not true at all. Sure, you will probably not qualify for a traditional mortgage with zero down and low interest rates, but there are a few ways that you can invest in real estate even if you have had a recent bankruptcy. Using creative financing can make your credit score not a problem. This is done by not using your own credit to invest in real estate.



There are many ways that creative financing can be done that are completely legal, but these methods may require a motivated seller sometimes. Owner financing is one way to avoid the whole bankruptcy issue as well as bad credit or no credit. When an owner finances the deal, generally the buyer agrees to pay the seller instead of taking out a conventional mortgage. These may also be called land contracts, and the contract spells out every detail of the agreement between the real estate investor and the seller. This is a legal and binding contract, and there are usually no credit checks, although some sellers ask for a percentage down, usually between five and twenty percent.

Another way to invest in real estate after a bankruptcy is to flip a house or use a lease option. Here again, your credit is never even looked at. In these cases you find a buyer and a seller and you act as a middle man. A middle man who receives all of the difference between the sellers price and the buyers price. This type of investing is usually very short term, and no money of the investors ever leaves their pocket. The buyer puts the funds in an escrow account to the investor, and then the investor takes his cut and pays the seller the agreed upon price. Everyone gets what they want from the deal. The seller sells the property, the buyer gets the house that they desire, and you make some money for your time and effort. All of this happens without your credit ever even being an issue.

Investing in real estate after a bankruptcy can be done, but you may have to be more flexible and creative to finance these investment deals. Try owner financing, land contracts, a lease option, and flipping a house. These are all great ways to invest in real estate without having your credit even checked. Motivated sellers are generally also willing to be flexible to make the deal, and bankruptcy does not have yo stop you from your dream of investing in real estate.

Copyright ? 2007 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)