For most people, a house can be a costly acquisition. Chances are, the house you live in is one of the biggest purchases of your life. And the real estate investments you acquire may not cost as much but it’s possible that you might be thinking about using loans and mortgages to buy those investment properties.
You might be wondering, like a lot of investors, how to buy an investment property with bad credit for savvy investors in Milwaukee.
Fortunately, there are at least 4 simple ways to acquire investment properties even with bad credit.
These 4 Ways Describe How To Buy Investment Property With Bad Credit For Savvy Investors In Milwaukee
Strategy #1. Use the money you already have. Many investors overlook the resources they already have, assuming that a lack of good credit means they’re out of options. But in reality, you may have access to funds that can help you secure an investment property without relying on traditional lenders.
For instance, if you own a home or business, you might have built up equity over time. Home equity loans or lines of credit (HELOCs) allow you to borrow against the value of your property, often at lower interest rates than personal loans. Many investors use these funds as a down payment on their first rental property, accelerating their real estate portfolio growth.
Another option is tapping into your retirement savings—but with caution. If you have a self-directed IRA or a Solo 401(k), you can use these funds to invest in real estate. However, IRS regulations strictly prohibit self-dealing, meaning you can’t use the property for personal use, and all income must go back into the retirement account. Violating these rules could lead to hefty penalties. Before making any moves, always consult with a financial advisor to ensure compliance. You can learn more about these options through the IRS guidelines on self-directed IRAs here. If you want to talk to us about how to invest with your IRA or 401(k), just give us a call at (920) 851-9727.
Strategy #2. Use seller financing. raditional mortgages aren’t the only way to finance an investment property—seller financing is an often-overlooked strategy that can work for both buyers with poor credit and sellers looking for a steady income stream.
With seller financing, instead of applying for a loan from a bank, you negotiate directly with the property owner. Typically, you’ll agree on a down payment and monthly installments, just like a conventional mortgage. However, the biggest advantage is flexibility—the seller sets the terms, which means you might avoid strict credit checks or high-interest rates.
That said, it’s crucial to structure these agreements properly. A well-written promissory note should outline the loan duration, interest rate, and consequences of missed payments. Additionally, in Wisconsin, certain seller financing deals may require compliance with state lending laws. Consulting a real estate attorney before finalizing any agreement ensures that both parties are legally protected.
Strategy #3. Partner with another investor. Real estate is a team sport, and one of the smartest ways to invest with bad credit is to partner with someone who has strong credit and financial resources. This approach allows you to pool your strengths—while they bring financing, you contribute in ways that make the deal work.
So, what can you bring to the table? If you’re skilled at finding great deals, managing properties, or handling renovations, you have valuable assets that credit-strong investors often look for. Many experienced investors lack the time or local connections to source high-quality properties but are willing to provide capital if you handle the groundwork.
Strategy #4. Find a cash buyer. If traditional financing isn’t an option, working with cash buyers can be a powerful way to invest in real estate without relying on your own credit. In this strategy, you focus on finding undervalued properties, negotiating deals, and then assigning the contract to a cash buyer for a profit—a method known as wholesaling.
Cash buyers are often seasoned investors looking for off-market deals. These individuals or companies typically have funds readily available and can close quickly, making them ideal partners when you lack financing options. To succeed in wholesaling, you’ll need to develop strong deal-finding skills, build a network of cash buyers, and understand Wisconsin’s real estate contract laws to ensure smooth transactions.
However, wholesaling isn’t without risks. Some states have regulations requiring wholesalers to hold a real estate license if they’re consistently assigning contracts for profit. While Wisconsin’s laws are more lenient, it’s always best to consult a local real estate professional before getting started.
There are other ways, too, but this is a great way to invest in real estate even if you have no credit.
Summary: How To Invest With No Credit
Bad credit doesn’t have to be a roadblock to building wealth through real estate. By thinking outside the box and leveraging creative financing strategies—whether through seller financing, partnerships, retirement funds, or wholesaling—you can make your first investment without relying on traditional bank loans.
That said, it’s crucial to approach these strategies with due diligence. Not every deal is a good deal, and not every financing method is right for every investor. Take the time to research your options, build relationships with trusted professionals, and always consult a financial or legal expert before making major investment decisions.
Milwaukee’s real estate market presents incredible opportunities for investors at all levels. With the right approach, even those with bad credit can carve their path to financial success.