No credit? No problem in unconventional real estate market

— -- Q: Steve - It seems to me that with real estate prices so low, now is a good time to get into that business. Buy low to sell high! My problem is I don't have great credit. So is real estate actually a good idea? And how does a guy in my situation get started? — Cal

A: I am almost always bullish on real estate as a business. I have known many people who have made great sums of money with savvy investments. When prices are going up, it's of course good for business, and when they are down, it is a buyer's market. So know up front that is my prejudice: I like the real estate business.

To buy property the conventional way, you must have good credit and money in the bank. Without both, buying property is difficult; neither the owner nor the lender will take you seriously. So, what do you do if you have bad credit or you haven't saved enough for a down payment?

You are what we call "the unconventional buyer;" you will have to be more creative.

Being an unconventional buyer means you simply cannot call up a real estate agent, drive around, find a property you like, and make an offer. You'll probably have to find someone who will be willing to work with you and your situation.

How? Here's the secret: You need to find an owner who is as motivated to sell as you are to buy. What you are looking for is someone who needs to quickly get out of a mortgage or whose property has been on the market for an extended period of time. There is no shortage of those these days, unfortunately.

There are many reasons a house or other real property may not have sold easily. It could be in need of major repairs. Maybe it's in a poor location. Perhaps it just has an odd floor plan, a small backyard, or some other drawback. Maybe it's because of the bad market. Whatever the case, your job is to find that hungry, motivated seller, because motivated sellers are creative sellers, and that's what you need.

Where do you find these sellers? Here are a few ideas:

The empty house: If you are an unconventional buyer, when you go looking for a home as an investment, the best thing you can find is an empty house for sale. An empty house is costing someone a lot of money. In many caes, the owner has tried to sell it, couldn't, has moved and is now stuck paying two mortgages. An empty house is an unconventional buyer's best friend.

Ads and signs: The magic words you are looking for with any sort of real estate (a house, duplex, commercial property, etc.) are "owner will carry the papers" or "owner financing available." This means the owner is willing to finance all or part of the sale.

The victim of divorce: This is harder to find, but equally lucrative for the unconventional buyer. A divorce, especially a bitter one, often means the parties need to sell the house quickly. If you can find one of these, a creative offer can work.

Estate Sales: When an elderly person dies and leaves a home or other property to his or her heirs, the heirs will often put it up for sale. Here again is the possibility for an unconventional purchase, as the home may need extensive remodeling or the heirs may not agree on how to proceed.

If you are willing to take the place "as is," you may be able to get them to sell it to you to save them from additional headaches.