Credit Card Purchase

4 Replies

BP,

I’m looking to purchase a property when the current renters move out in June. I can make the purchase with my business partner’s credit card (12%), the property will be in my name (he doesn’t want to do buy and hold), and our contract will state that I am responsible for all repayment of financing until the refi.
1.At 12% putting it on a credit card seems like a no-brainer since HML rates start at 12% + 2 points. I can afford the monthly minimum payments until refi even if it doesn't rent. Is it wise to put the entire purchase and renovation on a CC, even for 6-9 months?

2.Lenders have quoted refi minimums as follows: 75% LTV, $50K minimum loan amount (property has to be worth $67K min), credit score > 670, minimum 6-month payment history. I can meet all requirements. Is there something I'm missing here? Who has experience refinancing an investment with a standard loan?

Thanks,
Andy

Are you sure his cash advance rate is 12%? Title co.s do 't take credit cards for purchases.

You might want to check I think credit cards can file a UCC filing on what you purchase.

Joe Gore

You might want to check out a P2P lending service like Prosper or Lending Club if the loan amount if low enough. I agree with @Wayne Brooks about the cash advance rate (and limit).

Hope all goes well

Joe

Guys,

Thanks for the quick responses. @Wayne Brooks - the interest rate on a cash loan is 5% higher. @Joseph Konrad - that equals what Prosper and the Lending Club offer. Thanks for the lead; I didn't know about those sources. @Joe Gore - the CC's can file a UCC on the property.

Again, lots of great information that you were 100% correct on. Thanks for the sanity check. FYI, with private financing for the purchase and paying off the CC (repairs only) in 60 months, this property cashflows for about $100/month. If I put personal money towards paying off the debt I can be free and clear in about 24 months.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here