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Since someone with average credit can get a mortgage for 5% or 6%, how far down the deadbeat scale do you have to go to find a buyer that thinks 8% is attractive?

Lets try to be a little bit kind.

Mostly we are dealing with people who rent. What are their credit issues?

Well, the obvious ones like getting out of control with a credit card. Then again these are not the ones normally trying to buy a house.

Categories that do apply...

Divorce - some divorces are rather nasty. Sometimes the person was responsible for the divorce and sometimes they were taken for a ride.

Medical - they might have be just as good a person WRT to bill payments as you. They an accident happens, major illness, on the job issues, etc. Some people really get nailed when suddenly facing 100K and the death of a child after 2-3 years of medical issues. These people want to get on with their life and would like a house prior to waiting 7-10 years for the credit report improves. Something like their living child would do better in a different school district so they want to move now.

As an investor...You are taking a calculated risk. Similar to owning the property and renting to them but without the management issues. Definitely more difficult to foreclose then if it was a rental and you were only evicting. Larger deposits then 1st & last months rent.

I just do not see all of them as deadbeats when I rent to folks. Hence I might consider being a lender (I have not done this yet).

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