Real estate investor Lisa Phillips’ home foreclosed several years ago. Because of that, she found an affordable real estate market niche and strategy. Determined, not to let a foreclosure dictate the results she will have in life, or future finances, she built a real estate empire on homes purchased for $35k and under. She uses creative financing to buy houses in working class communities without a traditional mortgage, and also teaches others how to invest in lower income properties, pushing them towards earning higher income.
Here is her advice on strategies to safely invest in homes, even with less than perfect or no credit:
What’s your real estate investment strategy?
LP: I focus on obtaining cash-flowing rental properties that cost under $50,000; this can be 20k with 15k in renovations, or 40k with 3k in renovations. However, all of them are in decent neighborhoods, with cash-flowing rents, and usually [located] within working class neighborhoods and communities. It’s affordable, bite-sized chunks of investing.
How did you finance your first ever deal?
LP: My first deal, I lucked up on. I had previously purchased a very overpriced, expensive home, so I decided to purchase a lower priced, decent condo for 35k. I was surprised, but accepted that the neighborhood was really nice—up to a B class or even A class neighborhood. With rent from a roommate, it completely covered the mortgage and all utilities. This was during the 2009 to 2011 recession, so it was a scary time and jobs were scarce. But, low-priced real estate made it so I was very comfortable and self-reliant; [it was] a powerful learning lesson.
Why are you interested in sub 30k market? What surprised you most, in a positive way, about this market?
LP: I was surprised (although, not really) that there were a lot of neighborhoods around the country that fit this description. The surprise came from all the “traditional” and cookie cutter advice from experienced investors, which only foretold doom, gloom, destruction, from this price range and the range of headaches from renting to “those types of people.” But, I was not so surprised, because I instinctively knew something they didn’t; I grew up in these types of neighborhoods, so sizing them up and being comfortable in them was as natural [to me] as being comfortable in a higher income neighborhood was for them…
Can someone really use credit cards to buy a house? How?
LP: You can. There are a variety of loan products I’ve used to purchase and renovate homes—from personal loans, to strategic credit card use, and even equity in big ticket items like your vehicle.
Note: If you have bad credit, this is NOT for you—you’re going to dig yourself in even deeper….
Tell us how you help others get financially independent through investing in real estate.
LP: I offer a variety of ways for new investors to get their feet wet, with specific knowledge; not cookie cutter advice that says you should spend hundreds of thousands of dollars in an A class neighborhood for your first investment in places like D.C., N.Y., and C.A., where it is literally 300-400k for your first rental. That is a big step, if you’ve NEVER done this before..
What else would you like to us to know?
LP: I had a foreclosure about seven years ago.
To find out more about Lisa Phillips’ work, click here.