I can't get bank loans, but I can get credit cards for a purchase... Should I?
I can no longer get bank loans since I am now a full time investor. I am toying with the idea of using credit cards to fund the purchase of some solid cash flow properties. I have one credit card that is at 6.9% Fixed (not an intro) with $30k of usable credit. I know that I won't be able to get another one with a rate like that, but I should be able to find some 8-10% cards if I start shopping.
There's a few drawbacks that I can think of:
1) If I make a late payment on one, I've heard that the other companies are able to raise my interest rate on their accounts. Such a raise on multiple properties could be devastating.
2) If I max out the cards, my credit score may drop. However, I can't get bank loans anyway, so I figure I might as well put my credit to use and make some money off it.
3) I'm not sure how credit card payments are calculated/amortized. The payments even on a small loan maybe still be too high to cash flow properly.
I have some opportunities to get into some properties for about $25k that rent for $750-$800/month. I felt that with cash flow this solid a credit card purchase may be justified.
I look forward to hearing what everyone thinks!