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zanders

Another New Business Idea

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I work with a licensed credit repair firm that has NO UPFRONT FEES. I simply locate tenant buyers, put them in the pay as items come off credit repair program and then locate a LO seller. I sell them on the fact that I have a TB with down payment money, actively in a credit repair program and I am working to assist them in exercising the LO.

 

Three cash flows for me here:

 

1. Get part of the down payment.

 

2. Get passive income from the credit repair firm.

 

3. When cleaned and ready, I hand them off to the mortgage broker and get a point or so from them.

 

For the greedy ones...You could make a 4th cash flow and get a piece of the action from the tenant buyer!

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I work with a licensed credit repair firm that has NO UPFRONT FEES.

Credit repair firms are NOT legally allowed to charge upfront fees.

 

Credit Repair Organization Act

Sec. 404 -- Prohibited Practices

( 4 )( b ) Payment in Advance.--No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed.

 

Source: http://www.ftc.gov/ro/chro/croa1.shtm

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I work with a licensed credit repair firm that has NO UPFRONT FEES.

Credit repair firms are NOT legally allowed to charge upfront fees.

 

Credit Repair Organization Act

Sec. 404 -- Prohibited Practices

( 4 )( b ) Payment in Advance.--No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed.

 

Source: http://www.ftc.gov/ro/chro/croa1.shtm

 

Isn't that what he said? Their are companies that charge and it may be illegal. But that doesn't mean that everyone does it.

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Zanders,

We've done this for years.

 

1. Get part of the down payment. (as a partner, or principle and call it consideration not "down-payment" or it could be construed as equitable interest)

 

2. Get passive income from the credit repair firm. (as a legal associate paid on commission)

 

3. When cleaned and ready, I hand them off to the mortgage broker and get a point or so from them. (as a loan officer/broker or you're violating section 8 of RESPA)

 

Good stuff if you can keep it legal.

Thanks for sharing.

Adam

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To get that point from the broker you'll have to be their employee (loan officer). Bear in mind that some states, more and more as time goes on, require you spend significant time and money on training to become a loan officer. In Texas, for example, if you don't already have 18 months of origination experience you need 60 classroom hours, because they basically license loan officers now. I'm not sure, it may be a requirement of the Federal SAFE Act. About the only upside is 36 months after you do it you can get your own broker's license if you can meet the net worth requirements or post bond. You didn't even need a license in MS before SAFE was passed. Ah, the nanny state in action.

 

To be on the safe side, you almost certainly have to disclose the compensation you're getting from both the credit repair firm and the broker. I'm not sure how that would affect the likelihood of the T/B consummating the deal.

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I have actually tweaked it out a bit since my post. There is no fee at all to the seller or buyer throughout th entire process. I get 3% on the end of the deal after the loan closes. by offering it this way, I am averaging a new client a day. I understand that the risk is on me, but I am insulating myself well enough I think.

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I got around that point by simply charging a flat fee of $1000 as a marketing fee and set up an llc for marketing purposes. The mortgage person simply 1099's my company or w-9.

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