Property ownership is often seen as a path to future wealth. However, for those with low credit scores, the ability to secure loans at reasonable rates can be an impediment to entering the market. In some cases, a bad credit score may disqualify you right out of the gate. This article will focus on alternative ways to secure funding and start your path to ownership of investment properties.


If you are serious about investing in property, you can always turn to friends and family for financial backing. While you may not have the funds you need at your disposal, you may have the muscle or business savvy to manage the property. By offering to be the handyman and/or property manager of the property, you are providing a valuable service at little to no cost to your investors. Create a business plan for your investors that includes your proposed “sweat equity” and a positive cash flow to your investors.

Hard Money Lenders

Hard money lenders, similar to crowdfunding, is a group of individuals or private investors who provide financial backing. Unlike friends and family, they may require a hard asset in return for their financial support. The terms of these types of loans vary based on the agreement between borrower and lender. These types of loans are considered risky for both parties.

 Distressed or Foreclosed Properties

If bad credit is an obstacle that is too difficult to overcome, consider buying a distressed or foreclosed property. Buying a property outright avoids the issue of bad credit. However, these types of purchases don’t come without their own set of risks. While the purchase price may be minimal, buyers should do their homework to determine if there are any liens against the property, how much it will realistically cost to fix and if they have enough cash on hand to close the deal.

If you have bad credit, don’t let it be an obstacle to investing in a property. Design a plan for how you intend to purchase, rehab and maintain that property in the long run.