Using Lines of Credit and Credit Cards
Hey all,
I wanted to get some thoughts on obtaining properties and rehabbing properties using LOC's from a local bank and CC's. Pros and Cons? Stories and experiences about how you have successfully done it or how it turned into a disaster? Would love to hear all thoughts on the subject.
Most Popular Reply
#5 All Forums Contributor
- Plymouth, MI
We've done this, and as long as we still have a source for this, we still will.
First, make sure you get them with "0" or very low interest for at least 6 months (1 year ideal). Most credit card int. rates are too high to carry.
Second, you MUST take out this debt ASAP...either with a flip or a refi (remember, this isn't lian-able debt, so the property will have 100% equity as far as the lender is concerned).
Third, if you have time left on the "0" interest, re-use the money after the flip/refi on the next deal...then get out of that one ASAP too.
Fourth, pay back the c.c./LOC ASAP once (or before) the interest kicks in.
Fifth, apply for new/additional credit...but request/require the same "0" interest on the new as sell.
Sixth, <see #1>
Joe Villeneuve
REcapSystem
A2REIC