Are these costs acceptable to finance our initial flips?

4 Replies


We just got a pre-approval to potentially get an unsecured business credit card with a 100k limit, Interest free for the firts 6 months.

Now here's the fine print, if we decide to go with this card, the cost to get it will be a one time 10% fee charged at the backend(fee will be charged to the card) by the company assisting us on getting approved and then to be able to get cash from the credit card another company will charge 6% of whatever amount we want to withdraw. Of course it will make sense to withdraw the full amount to pay the 6% once.

In few words, it will cost about $15400 to get this business card. No other costs are involved. 

Our credit is not the best, that's why we are considering this option. 

Would these costs make sense for someone with challenge credit looking to buy his first property to flip? 


@Angel Acosta that is a lot of profit ate up just on getting the loan, me personally I would look for other options possibly finding a private money lenders.

you can get a hard money loan for 10-12% with 4 points sounds cheaper or you can use your own credit card at18 % cheaper or a portfolio loan against other properties for 6% ,in short sounds like a giant ripoff

@Angel Acosta  

So there are several things here to consider.....

Are you sure the fees you listed are the total costs you would incur?

This is going to depend on how hungry you are to change your life and how prepared you are right now to get started. If you aren't well versed and prepared you likely should find a mentor of sorts before adding 15k in debt to your life. Someone who can walk with you through a deal or two and be there if needed can save you a lot of money and heart ache, if you are totally prepared to flip then great.

It almost goes without saying that when you have bad credit that it usually was a series of choices that brought a person to that position. Obviously nobody is perfect, but if you haven't found the discipline needed, a card with 100k could be more of a rope to hang yourself with than a stepping stone up in life.

1) Are you ready/prepared?

2) Are you disciplined now in your spending habits?

3) Do you have someone to call for back-up if you find you're in to deep?

4) Do you have 100% confidence that the deal YOU HAVE LINED UP NOW will make you a solid return??

This probably isn't the most highly recommended way to enter investing and could pose huge problems and disaster if you aren't totally prepared to play the game. If you are ready then this could be pretty awesome - BUT PLEASE EVALUATE THIS CAREFULLY!!!

Go get em! Hope ya make a million!!

Thank you all for your tips,. We are looking at a couple of hardmoney lenders to compare costs.

@Jeff..we have considered all the options you mentioned and we are ready to launch as we have been preparing ourselves for almost a year. We have selected our farm area and lined up a couple of investor friendly contractors, an attorney, CPA,  etc. I am a realtor myself working mostly with investors and experienced in purchasing properties at the county auctions, doing REOs and in doing title searches, property inspections, marker analisys, etc. The only piece we are trying to place is the capital. We are reviewing other options but wanted to get some feedback on this alternative in case is the only one left on the table. Thank you so much for your tips! 

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