detroit, macomb · Member since 2018 · 84 posts · 42 votes
Hello is it possible to sell something online and use a credit card to buy that item for myself and then use that cash to transfer into my bank to buy a house? Because i have 20k credit limit and would like to turn it all into cash Because i cannot qualify for any bank loans and hard money loan is my last option..thanks
Don't do that it sounds like a horrible financial move. Work on your personal finance. Setup a monthly budget for yourself and save as much as you can. Keep on saving and continue educating yourself further.
Maxing out your credit cards won't help you secure a mortgage. It will help put you in worse financial shape. Also let's say you found a house for 20k and maxed out your cards. Credit cards are one of the most expensive ways to borrow money interest wise. What happens when you need 20k-40k additional to rehab the place??
Why can't you qualify for a loan at a bank? Have you tried for a FHA type mortgage?
Someone may have already covered this I'm not sure .Most credit card company will issue you checks. You dont have to create a unnecessary loophole when you already have the line of credit. Your credit card company doesn't care how the money is spent just as long as the payment gets made. Call them and get them to send you a check book
@Frankie Betancourt I have done just this! I needed to pay my drywaller $3k, needed to put it on my 0% APR credit card but he only took cash!
So I venmoed my wife $3k with our credit card and in a couple of days we had cash in our account. I did this with about $10k. Here’s the problem though, you end up paying a 3% fee to use that credit card.
However 3% might be worth it if you have 18 months to pay off your 0%APR Credit card.
Don’t think about purchasing real estate this way though, as banks and lenders WILL inquire about the debt and will most likely make you pay it off before purchasing a home.
In the future you can just write yourself a check from the credit card...might have to call bank but usually they come with the statements
Did you look into using something like Plastiq? There are fees and I am not sure about the limitations, but they basically allow you to use your credit card to pay for things that normally do not accept credit card payments (mortgage, student loans, etc.) via cheque which they send on your behalf after charging your credit card.
You could do a balance transfer from a credit card, banks give you that option sometime and if you haven't received one in the Mal you can have your bank ut a request in to send some if you have had the card long enough. They send balance transfer checks you can use anyway you like for whatever you decide. For example you can write yourself a check and deposit it to an account in your name, you can use it to pay someone else, you can pay off other cards. The rate is usually 0% with a promo for one year but you pay a 3 or 5 % one time fee on the total amount you use ( usually your credit limit). It's an interesting way to use credit card lines of credit if you know you can pay it back before the promo offer time period or you will be stuck with very high interest charges. Good luck !
@Frankie Betancourt you will also pay fees on eBay for selling which together with the money you now owe to the credit card might be more than just taking the cash advance
@Frankie Betancourt any thoughts about the income tax consequences??.... you buy a thimble that you own and list for 18k... then you buy it for 18k.... looks like a capital gain to me!
I feel you. I once had the same type of need. I had a credit card with a high limit, and not really a good way to access it or use it the way I wanted to. I think I was pooling with others for a booth rental. Cash advance from the credit card was 1. limited, 2. had large fees associated with cash withdrawal, and 3. needed an institution to withdraw and the institutions added extra processing fees.
As we learn through business transactions, it's not just the fees, it's not just cash out of pocket, it's not just the cost of hard money or any other cost that can instill fear-of-action in the business person, it's what to whole scenario nets at the end of the day. Check your numbers, make sure that you include all your cost for obtaining your cash and that in the end, you have a profit margin that makes the deal worthwhile.
if this is the only way you have to do it, you're putting yourself into a bad financial position in doing something like this.
In this scenario, you'd actually be far better off seeking hard money, the interest rate would be lower and odds are if the deal you had was just bad all around, they wouldn't lend to you.
I've heard of people doing balance transfers, specifically the ones that are 0% for 1-1.5 years, to fund this sort of thing, but most had a plan around how to refinance them or pay them off within the time frame.
What a lot of people don't realize is that MANY investors and even large companies use debt to purchase assets, it's just a matter of understanding the discipline that comes along with it. There is a method of doing this properly though you definitely need to consult with someone who has credit experience.
For what it's worth Frankie, that's the kind of creative thinking that can make you a great deal maker as your career progresses. I've never heard anyone consider that. Just because this one may not be the best route doesn't mean you shouldn't have asked the question.
Hi Frankie. The way to do what your asking is best done if you find a another real estate investor that is doing a purchase rehab and you buy/pay for 20k of expenses for the LLC entity. Your contribution to the partnership or venture is that you contributed 20k in capital, it doesn't matter that it came from a credit card. That said, you have to 100% make sure the creditors cannot go after the LLC or the venture. That should be feasible in most cases.