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?
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.
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
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.
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