Struggling with bad credit but dreaming of building wealth through real estate? This inspiring story shows how Henry and Jessica Washington went from being denied a home loan to owning over 100 rental units using flips, strategic lending, and old-school consistency.
Whether you're just starting out or scaling a portfolio, their journey is packed with actionable insights for every step of the real estate investing path.
Henry and Jessica married quickly, within a year of meeting. Henry made good money but spent heavily. When they applied for their first home loan, Henry received a humbling call. His poor credit dragged down their application. The only way to close was to remove him from the loan. Jessica closed on the house without him.
He jokes that she became his first landlord, but it cut deep. He had hoped to be the steady financial foundation for their family. That moment sparked real change.
He started with the basics: saving, repairing credit, and learning. Instead of chasing shortcuts, he paid the people he owed. He disputed incorrect items but accepted responsibility for legitimate debts, like a bill from a former landlord for new carpet or a disputed phone bill. Even when the charges felt unfair, he paid them to move forward.
"I looked at my credit report and saw all the people I owed. And I paid them. Credit went up."
Within a year, his credit improved enough to work with local banks on commercial loans. Their first rental purchase came from a 401(k) loan on Jessica’s retirement account. The property’s cash flow repaid the loan, giving them the confidence to grow.
They found their first property through word of mouth. It was listed at $116,000 and was worth around $165,000. That price cushion gave them a safety net. A local commercial lender happened to be in the bank lobby when Henry walked in. He reviewed the contract, saw the equity, and approved the deal with 15% down—sourced from the 401(k) loan.
After closing, the banker offered them a line of credit based on the home’s equity. He encouraged them to bring more undervalued properties, explaining that banks feel secure when loans are backed by strong assets.
This became their system: find good deals, borrow smart, and scale through equity.
Even with a growing portfolio, they kept their model simple. They market directly to property owners, focusing on single-family homes and small multifamily properties. Most single-family homes are flipped, while multis are typically held, though market conditions influence that choice.
Every social media post sparks new connections. Sellers, lenders, and contractors reach out. Even quarterly posts can create leads.
"Every time I post, I get leads—for deals, for money, for help. It’s easy. It’s free."
They began investing in 2017. Today, they own 100 to 120 units. Rising interest rates have made rental cash flow tighter, so they’ve shifted toward more flips.
Henry uses a three-phase approach:
The income engine throughout? Flipping houses. They flipped during growth, flip during stabilization, and will continue flipping while paying off properties. As more homes become debt-free, they can reduce flipping.
“Flipping got us started. Now it funds stabilization and paying off properties.”
Henry’s rule is simple: if he spends $50,000 on a rehab, he wants $50,000 in net profit. His average flip profit is $35,000 to $60,000. He avoids complex gut rehabs unless the price point supports it.
“If I’m putting 50 into a house, I want to make 50.”
He focuses on first-time buyer neighborhoods where demand is steady and price points are realistic. He prioritizes homes he understands well: familiar layouts, known neighborhoods, and predictable scopes of work.
Jessica leads on design and accounting. She doesn’t copy-paste finishes across projects. Instead, she designs for the likely buyer in each neighborhood. Her goal: a memorable home with a standout detail that doesn’t break the budget.
"We want something that catches a buyer’s eye during a long weekend of showings."
A family member helps create custom feature walls and details that make the homes stand out. The aim is a clean, warm, and inviting style.
Recently, Henry has targeted homes with extra land. Large lots or second parcels often allow for splits or resale. In one deal, he sold an extra lot to D.R. Horton for $20,000 and used that to fund a duplex down payment.
In others, he sells side lots to buyers post-contract, earning an extra $20,000 to $25,000. Some lots he holds for future builds. With free land, spec homes become profitable. Build costs are around $140 to $155 per square foot, and resale prices reach $220 to $250.
“We’ve flipped lots, built on lots, and even used them to negotiate better deals. It’s a strategy with options.”
They manage five short-term rentals with plans for a sixth. Jessica handles operations. These properties were selected based on real demand, mountain biking tourism, and corporate travel, not hype.
Each home could convert to a long-term rental if laws change. Only one wouldn’t cash flow that way, but it has enough equity to sell.
"They had to work as long-term rentals too. No single-use traps."
Every investor faces bumps. In one deal, a buyer backed out after Jessica quit her job, putting their plan at risk. The sale closed last-minute, but the scare taught them to expect delays and keep cash reserves.
In another, an FHA inspection revealed that a well and septic system were too close together—only 30 feet apart instead of the required 100. Fixing the issue meant boring under a state highway to tap into city water. The repair bill? $30,000.
“Get a septic inspection. A miss can cost $20,000 to $30,000.”
Henry left during the pandemic when his job demanded more hours. Jessica left later, only after a single flip replaced her annual salary. They saved that income before she quit and almost had to pivot back when a deal wobbled.
They still value W-2 income, especially early on. Banks often favor W-2s for lending. Quitting too soon can slow progress.
“We left when it cost us more to stay. But we waited until the business proved itself.”
Watch the full interview with Henry and Jessica below to hear the exact steps they took—from bad credit to 100+ doors—and the mindset shifts that fueled their journey.
Many beginners wait for rates to drop or for a crash. Henry disagrees. He urges action.
"You can’t time the market. What you can control is the price you pay and what you do with the property."
Q1: How can I start real estate investing if I have bad credit?
Start by pulling your credit report and resolving outstanding debts. Pay what you owe, dispute incorrect items, and build savings. Your score can improve in under a year.
Q2: Can I use my 401(k) to buy investment property?
Yes. You can borrow from your 401(k) to fund a deal. Use rental cash flow to repay the loan. It’s a common strategy for first-time investors.
Q3: Is flipping or buying rentals better for beginners?
Flipping can create fast income but involves risk. Rentals provide steady income. Many use flips to fund long-term rentals.
Q4: What’s a good profit margin on a flip?
Aim to earn what you spend on the rehab. If your renovation costs $50,000, target $50,000 in net profit.
Q5: How do I find off-market real estate deals?
Use direct mail, SEO, cold calling, or driving for dollars. Choose one method and stick with it until you get results.
Q6: Can I invest in real estate with no money down?
Yes. Strategies like seller financing, private money, partnerships, or 401(k) loans can help you get started with little upfront capital—if the deal is strong.
Q7: How do I find undervalued homes to invest in?
Look for distressed properties using direct mail, driving for dollars, and skip tracing. Use tools like DealMachine and local MLS monitoring to find hidden opportunities.
Henry and Jessica didn’t invent a new system. They used proven tactics consistently. They repaired credit, built savings, made offers, and adjusted to the market.
They didn’t leave steady jobs too early. They divided roles based on strengths: Jessica on design and numbers, Henry on deal flow. They flipped for cash and held for wealth.
Their success came from steady action, smart exits, and calculated risks. Anyone willing to learn, act, and adjust can follow their path.
"Keep it simple. Do the work. And build a life that can handle surprises."