Buying Real Estate with a credit card

Buying & Selling Real Estate

Buying Real Estate with a credit card

None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes

I have an opportunity to buy a piece of commercial real estate in the downtown area of a small town. Now I may be able to get a loan on the property, or other ways to buy the property, however, both of them will require closing cost. By using a credit card I can provide a fast closing and actually save money on the property.

I have enough credit on a single credit card to buy the property. I also have enough credit to flip the property and make a profit on it, rather I decide to mortgage it or not it, lease it at a later date, or both. Or maybe sell it for the right price.

The question I have for the forum is that the property is in a small town, and I am not sure the real estate agent that is handling the property will know how to do this? Matter of fact I am pretty much positive of that. How do I get the agent (in which I have not tried) to accept my credit card offer on the property? Has anyone done this?

The way I look at it is that I can flip the property within 60 days, and save the closing cost on the property, and will most likely have it leased within 90 days, and a mortgage within 180 days on the property if I decide to keep it. Total mortgage on the property I estimate will be $100,000 with a PITI of $800 +/- after it is flipped. Total leased income on the property will be $2000 or more per month, plus another small additional income the property offers ($100 to $200 per month).

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Warren, MI · Member since 2015 · 140 posts · 36 votes

10y

@Edwards Briley the company that issued the credit card to you, you could of request balance transfer checks. The easiest way to turn a balance transfer into cash is to use the special checks that credit card companies usually send with offers or with the monthly statement. These checks can simply be deposited into your checking or savings accounts. So basically if you have a card that 10K you can write it for that whole 10k or 30% of that if its on your personal credit and you could write it for the whole 10K if its a business credit card. Take a look at Juan Pablo's Videos

https://youtu.be/UaAjLjFD7zE?list=PLQPp47PDF3f6-pn...

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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
10y
@Edward Briley, people buying using HELOCs typically go to their online banking thing and print out something showing their name, balance, and available credit.
You could do that here. Or print out something from CreditKarma showing that same information.
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Edward Briley
OP
None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
10y
Don't need a line of home equality credit. I don't want to put up any of my owned real estate. Why should I? Matter of fact, why should I use my cash?
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Edward Briley
OP
None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
10y
Originally posted by @Chris Mason:

@Edward Briley, people buying using HELOCs typically go to their online banking thing and print out something showing their name, balance, and available credit.
You could do that here. Or print out something from CreditKarma showing that same information.
I re-read what you said, printing out my credit card balance is not a problem. The only problem I have is that, is the agent going to know how to process, or is able to process the payment? I guess I will not know until I try?
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Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
10y
Originally posted by @Edward Briley:
Originally posted by @Chris Mason:

@Edward Briley, people buying using HELOCs typically go to their online banking thing and print out something showing their name, balance, and available credit.
You could do that here. Or print out something from CreditKarma showing that same information.
I re-read what you said, printing out my credit card balance is not a problem. The only problem I have is that, is the agent going to know how to process, or is able to process the payment? I guess I will not know until I try?
You make your earnest money deposit, etc, to the title company not to the realtor. She just needs something she can go to her client with to show that you can in fact purchase the home without obtaining a mortgage.
Nitty gritty: You will probably need to get it from credit card to checking account and then wire the funds to title from there.
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Edward Briley
OP
None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
10y
"Nitty gritty: You will probably need to get it from credit card to checking account and then wire the funds to title from there."
The problem doing it that way is that I have to take a cash advance, which throws a wrench in the deal. Cash advances are handled different than purchases on credit cards. I know in larger cities purchasing a property with a credit card is not that big of a deal for real estate companies. I have went to a car lot and purchased a car with a credit card before, really for more money than what I will pay for this, and only had to pay the credit card interest. I have paid contractors more than this for flipping houses in the past.
The owner of the property owns it outright, other than it is in a family trust, which is not my problem. I will give a check for the EMD.
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Levi T.Pro Member
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
10y
I have never heard of real estate house ("company") or escrow agents accepting credit card as a type of payment when purchasing a property. Likely because of the credit card processing fees, size of purchase, and the the risk of chargeback. Repossessing a house is not like towing a car. This is also why they require certified fund in the form of a cashiers check or money order. If you have the credit you say you have, getting a unsecured line of credit will be no problem at a local bank, and will be a lot cheaper.
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Edward Briley
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None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
10y
Originally posted by @Levi T.:

I have never heard of real estate house ("company") or escrow agents accepting credit card as a type of payment when purchasing a property. Likely because of the credit card processing fees, size of purchase, and the the risk of chargeback. Repossessing a house is not like towing a car. This is also why they require certified fund in the form of a cashiers check or money order. If you have the credit you say you have, getting a unsecured line of credit will be no problem at a local bank, and will be a lot cheaper.
There is even a blog post right here on BiggerPockets about doing so. Just not much information about how to do it. I personally know a real estate broker that has done such. The situation is only that the company that takes the credit card is able to do so. Chargeback is not really an issue, due to the seller being able to sue you for doing such if he provides a clear deed, that it states in the contract. For someone like myself, an unsecured line of credit is not that easy for this amount of money. Of course, if I put up a property to secure the loan, lenders will jump all over it. I have turned down many of these. I also realize that I may have to pay up to 5% to put it on a credit card, however, that is well worth the trade-off.
I think many of you are missing the point of me doing this.
1 Reply
Levi T.Pro Member
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
10y
We get it, and it's a lot more than just a simple lawsuit. Thus the certified finds requirement.
The last poster explained the how, they are cutting a cash advance check.
Old saying goes, if you can't put a guarantee on the loan, then the loan is not worth doing.
That's the ones thing with real estate, financing has clear cut channels for a reason. If the peg don't fit.
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Edward Briley
OP
None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
10y
Originally posted by @Levi T.:

We get it, and it's a lot more than just a simple lawsuit. Thus the certified finds requirement.
The last poster explained the how, they are cutting a cash advance check.
Old saying goes, if you can't put a guarantee on the loan, then the loan is not worth doing.
That's the ones thing with real estate, financing has clear cut channels for a reason. If the peg don't fit.
For you all that think a bank will repossess something for not repaying a credit card bill are incorrect, unless it was proven to be intentional. If you have a credit card, and cannot afford to pay your bills you declare bankruptcy. The bankruptcy courts decides what you sell and what you pay to repay your debtors. A credit card company sure does not want a used car, and neither do they want to deal with auctioning it off. A credit card debt differs from a car loan.
I have used 2 credit cards to buy a car in the past, and have made some very large payments to contractors using a credit card. Neither of them required me to cut a cash advance check to do so?
Let me try this. I have customers come into my business and pay by credit card. I take that card. put the bank payment into my bank account, and pay my bills from that money. Sometimes I even use a credit cards to pay my distributors.
Why could I not pay the real estate agent that is selling the property by credit card? It is easier for them to pay the money to the seller than myself to do so? The same process is happening when you buy anything else with a credit card. Is it not? You are buying someone else's property no matter how you look at it, and in most cases paying a middleman to purchase it.
I am someone that has never declared bankruptcy, and never plan to do so. I have paid my bills, and believe me have made some banks very happy while doing so.
I have a very large opportunity coming up in the very near future, that will be financed by an owner. I just don't know the exact time, but I need to be ready when it does happen. For this I will put up a property or two to get the money I will need. For this reason is why I don't want to use my equity in real estate to do so. By playing with credit cards to buy the aforementioned property will not disturb this larger deal, and will generate income to pay for it, no matter how you look at it. Hopefully by the time the larger deal comes about, I will be able to use the equality from the property that I want to buy with a credit card.
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Brandon L.
Real Estate Agent · Falls Church · Member since 2012 · 2k+ posts · 1k+ votes
10y
@Edward Briley I'm sure someone somewhere knows the process for this, but I am sure it's not very common. Call up all the title companies in the area and see what they have to say. That might turn up something that is useful.
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Edward Briley
OP
None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
10y
Originally posted by @Brandon L.:
@Edward Briley I'm sure someone somewhere knows the process for this, but I am sure it's not very common. Call up all the title companies in the area and see what they have to say. That might turn up something that is useful.
Yes, I agree with you, the closing attorney should know how to handle this, seeing how he will be acting is the title company in this transaction.
1 Reply
John Vo
Investor · Houston, TX · Member since 2015 · 99 posts · 56 votes
10y
Edward, I think the biggerpocket article/post you're referring to is this one: https://www.biggerpockets.com/renewsblog/2013/03/16/real-estate-credit-card/. So to clarify you're trying to pay for this property outright using your credit card, correct? If that's the case I believed it's doable but the hard thing would be to find a closing company that would be willing to take the credit card charge. Many closing companies I know would not be willing to do this as it's an 'unsecured' line of credit. They want a certified fund. You can thank the 2008-2009 real estate bubble for that. However, you can take the cash advance and have it "seasoned", I believe the magic number is at least 2 months in your bank account at least if you're attempting to get a mortgage using credit card fund as your down payment, so there's no further prying question. But as you mention, this is something that you don't want to do. So your best bet is to find a title company in your area that's "investor friendly" or a real estate attorney that's investor friendly, to help you. Your local REIA can help with that.
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Ryan Cameron
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
10y
@Edward Briley
Were you ever able to close paying by credit card? I just started a post asking this same question:
https://www.biggerpockets.com/forums/50/topics/351567-purchasing-real-estate-with-credit-cards
0 Reply
Edward Briley
OP
None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
10y
Originally posted by @Ryan Cameron:

@Edward Briley
Were you ever able to close paying by credit card? I just started a post asking this same question:
https://www.biggerpockets.com/forums/50/topics/351567-purchasing-real-estate-with-credit-cards
No, I decided to go another route. It is not the way I would have preferred, but hopefully it will work.
0 Reply
Delmas Edwards
Warren, MI · Member since 2015 · 140 posts · 36 votes
10y
@Edwards Briley the company that issued the credit card to you, you could of request balance transfer checks. The easiest way to turn a balance transfer into cash is to use the special checks that credit card companies usually send with offers or with the monthly statement. These checks can simply be deposited into your checking or savings accounts. So basically if you have a card that 10K you can write it for that whole 10k or 30% of that if its on your personal credit and you could write it for the whole 10K if its a business credit card. Take a look at Juan Pablo's Videos
https://youtu.be/UaAjLjFD7zE?list=PLQPp47PDF3f6-pn...
1 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
10y
Good luck finding Sellers or Agents that offer CLEAR TITLE by credit card purchase - without requiring it to be treated the same as a cash advance! Cheers...
0 Reply
Ryan Cameron
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
10y
@Edward Briley Thanks. I'd still like to know if it is possible. Most of what I see in this thread is using the cash advance feature on the card
0 Reply
Rick H.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
10y
@Edward Briley If you're going to be a real estate investor, I suggest you start talking like a real estate investor. You have an opportunity to buy a commercial real estate parcel, not a "piece" of real estate, unless it's fractional.
I started investing in 1978 with very little money but I did have a credit card. The challenge I asked myself was, 'Can I make money in real estate even when paying high interest rates?' (which were commonly 18%+ at the time).
The mechanics of getting a cash advance on an unsecured credit line have not changed (much) in forty years. If your real estate acquisition sale is insured, you would either wire funds to escrow with closing instructions or write a cash line check.
If you bank at a retail bank it's likely that you could pull a cashier's check to provide certified funds.
As to the wisdom of using other people's money (that you are solely responsible for) you'd better be comfortable with repayment even if things don't work out as planned. What's your tolerance for risk? Do you thoroughly understand the opportunity? Does it cash flow positively or is it all "upside?"
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Edward Briley
OP
None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
10y
What I am writing below is for someone that has excellent credit with zero chance of losing the property short of a large scale economy collapse. I am not someone that condones, or ever believes that someone should buy a property with a rent to own contract, unless they have the credit and financial ability to buy the property when they sign the agreement. (I am not saying this is wrong in all situations, however, paying higher than normal rent payments for your down payment may show you do not truly appreciate the want of buying or owning a property). I highly advise anyone that purchases a property with a rent to own contract to be advised by an attorney before doing so.
What I did is negotiate with the owner to lease the property for three years. I am responsible for all renovations of the property, including taxes and insurance. The price of the property in which I pay for the property is negotiated, and I must purchase the property in cash prior to 36 months of signing the lease. There are also agreements in the lease in equal favor of both parties, I cannot disclose for my own protections.
Providing I meet all requirements in the lease, nothing is reported to any credit agency that I am responsible for the payments of this lease. (In which the way the contract is written I am not).
This lease agreement is only between myself and the seller of the property, with my attorney looking over the contract. I would never do this kind of buy without consulting an attorney and having the attorney advising me if this is a safe way to purchase any property.
In saying the above, the lease has yet to be signed by myself or the owner of property, however, I do have an agreement with them.
0 Reply
Daren H.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
10y
I have purchased a property using credit cards before and looking at doing it again. I would get 0% offers for balance transfers where the bank would allow me to access up to the card limit in cash and direct deposit into my checking account within 2 - 4 days (for 3% fee). The 0% interest period was generally 12 - 18 months. I then paid cash (certified check) for the property at closing. I have never heard of the title company taking payment from the actual credit card but I don't know everything :) The problem with the "cash advance" feature of the card is that this limit is generally capped at a much lower amount than the actual credit limit thus limiting your full potential to cash. That is why I like the balance transfer offers. For instance if your card limit is $60K, depending on your card, you can take up to that amount less the processing fee (assuming you were starting from zero balance). For my card, my cash advance limit was $25K. This alone would have limited me for the purchase.
Here is one thing you need to look out for. You will likely be using most of your available credit on the cards to purchase the property and fix it up. If your exit is to refinance with a lender, your credit score will take a significant hit and you may not not be able to qualify for a loan. This happened to me because I did not comprehend this in my exit. My middle score dropped slightly below 720 because of my credit utilization to available limit. I happened to have the cash to pay down the balances so my credit scores went back up and I refinance into a 30 year loan, got the majority of my cash out of the property except for ~$6K, and paid back the cards and such. It all worked out but that credit score thing was very important to know. Now I know.
Some cards will also allow you to go to your banking institution (or theirs) and the bank can do a cash advance up to the card limit into your banking account. Again, this would be limited to your cash advance limit of the card.
1 Reply
Austin Lowe
Member since 2023 · 7 posts · 5 votes
2y
Quote from @Edward Briley:

Don't need a line of home equality credit. I don't want to put up any of my owned real estate. Why should I? Matter of fact, why should I use my cash?

Edward, did you ever figure this out? I'm running into the same dead ends. I've recently closed on two separate properties that were both well within my limit on my cc. Why could I not just put it on my card?? Like you said a few times throughout the thread bigger purchases have gone through. I guess it comes down to a closing attorney accepting cc as payment? I saw on linked-in someone saying they witnessed a deal go down where the investor just charged his platinum card. I wonder if you got in touch with Amex and verified everything beforehand and had them reach out to closing attorney if that would matter. I might call Amex and ask. I see articles and posts saying people with the "black card" from amex buy mansions and jets and other things with them. So obviously it can happen but every time I ask how I get people responding with the same type of cash advance type suggestions or "bad idea" and stuff like you received in this thread lol. Any breakthrough after 8 years?
1 Reply
John Mason
Member since 2024 · 1k+ posts · 351 votes
2y
I hear good stuff about https://www.plastiq.com/
0 Reply
Austin Lowe
Member since 2023 · 7 posts · 5 votes
2y
That does seem like the most straight forward option. I know someone who paid their taxes with it and had an issue with something about it. But I think you're right that plastiq would work. I do wonder if it could be worked out directly with closing attorney though. I'd imagine they would need to hear directly from chase or amex or whatever cc is being used and have them say "yeah they're good for the purchase." Just feel like there could be an easier way than a third party but you're right it does look like it would work.
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John Mason
Member since 2024 · 1k+ posts · 351 votes
2y
You can also pay a trusted person using westeren union etc using credit card and then ask them to deposit in your bank account
https://www.bankrate.com/finance/credit-cards/how-to-send-mo...
Lower-cost alternatives for sending money with a credit card

Many issuers are introducing new ways for cardmembers to tap into their credit line to send money to friends and family. An alternative to a cash advance, these card loans allow eligible cardholders to borrow against a card’s credit limit and repay the loan monthly, sometimes with set repayment terms.

Unlike an advance that comes with a higher-than-usual APR, the amount you borrow is subject to your card's purchase APR or a lower rate, depending on the issuer.
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John Mason
Member since 2024 · 1k+ posts · 351 votes
2y
Here is one BP member who used it for Venmo etc
https://www.biggerpockets.com/forums/50/topics/280825-credit...
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