Kicky ....... I assume when you say "invest in real estate" ...you are talking about purchasing a home for yourself to live in. Which would be the best way for you to start out investing in real estate; even if you are thinking of buying , renovating, and then selling for profit.
Go find yourself an FHA conduit, and you can go with NON-traditional credit. What this means is that you can use your rental history, utilities, etc. You will need 3 tradelines done this way. You will need a clean rental history for at least 12 months. Your loan officer can help you with this. Once everything is in hand, the processor of your loan (prior to handing your file to the underwriters) will give everything to all three credit bureaus, and they in turn, will issue a new credit report showing these non-traditional tradelines, including when each one was opened up, and your pay history for each line. This will not give you a credit score. You won't need one doing it this way, though. But it does give you the credit lines for a loan through FHA. One more thing... if your lender says they will not do this kind of loan (even though it is backed by FHA) ....keep looking. Some lenders have done away with this. But there are still plenty out there, that will do them this way.
FHA has loan limits for each state and each county. You can google your state and county and you will find what your limits are. It ranges from about 271,000 for low cost areas to 625,000 for high cost areas.
New purchases require a 3.5% down payment on FHA. President Bush signed a bill doing away the Down Payment Assistance program. However, you can still use gifted funds for the dp.
Fannie Mae with no credit history will be the slow way for you to get a home. FHA the faster way. Some people think that FHA is only for low income buyers. Not so. The governments Rural Housing program sets limits on income, but not FHA.
Finding foreclosures without having to pay for a site that lists them...you can find by following these links:
(NHMS site) http://www.nhmsi.com/
(Hud Exchange) http://www.hudexchange.com/us/hudex/igate/hudex/pages/index/pages.html
***** On the hud exchange site ....click on your state on the map. It will bring up all of the counties. Click on your county. It will bring up a page of cities. Click on the city you want. Then it will bring you to page that says you must be pre-approved and asks for all kinds of information from you. DO NOT fill that out. If you do, you will have real estate agents and loan officers bugging you. It makes it look like you need to fill it out in order to continue. You DO NOT! If you scroll down towards the bottom of the page ... it has a submit button to view properties. Go ahead and hit that button and you will be able to view the properties.
Be prepared to have to do work on foreclosed homes. They are not always in the best of shape. FHA has a 203K for renovations of single family dwellings. Meaning you can borrow the money needed to repair the home at the same time you purchase the house. It's done all as one loan. Warning you though, 203K's are a bugger to do, and you are limited in the number of lenders that will do them.
Also ..if you are buying a foreclosed home, make sure you get your inspection. Here's where that can get tricky. On a foreclosed home, you are buying "as is". So in order to protect your earnest money deposit, you will be wise if you find something you really like...to get that inspection prior to putting an offer in. I know that sounds crazy to do it that way. But in reality, if the entity holding your deposit wants to keep it if you back out because the house is infested with mold, etc., they can. Not saying they would. But they CAN. It's better to lose a couple hundred for an inspection, than a couple grand of earnest money. Also make sure you get an owners policy on title insurance. A lenders policy is required. An owners policy is not. However; better safe than sorry. Just in case there are any unrecorded liens out there floating around.
One last thing. Some people think that because the home is a foreclosure, you can't ask for your closing costs to be paid when you put your offer to purchase in .. (since you are not dealing with an individual). Not true anymore. Bid low and ask for 2% (or more) concessions to pay your closing costs. You'll likely get it. They have too many houses on the books and each day that goes by, costs them money.