Dean Welch: Property funding when you have bad credit

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 the interview in note form below the video. However if possible, we recommend you listen to Dean Welch deal with our last minute interviewers.

Overcoming Bad Credit

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:

  1. The lease option will help you to build good property credit
  2. 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 at the end of the lease term. Let’s suppose the agreed value of the property is £100,000 pounds. You then acquire the property on a ten-year lease option at £1,000. At the end of the ten-year lease, you will still need to pay the full £100,000. Think of the lease option as a method to delay the full payment.

How a lease option will improve your credit score

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. As a result, your credit score will increase. Once your credit score is at a sufficient level the banks will then be happy to lend to you.

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. The family may have insufficient education to deal with the property, or maybe they simply don’t want the hassle. In general, if you get on well with your family members, they will want to do their best to help you in your life journey. As a result your bad credit rating will not be as relevant to them as an institutional lender.

Similarly, property investors may also give you a lease option. The benefit to them is that if you default on 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.

Next Steps

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.

In the meantime, if you enjoy reading about people’s property success stories check out the following articles:

If you are interested in the lessons from other successful people who attended the JTFoxx family reunion event check out the following articles:


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