Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
Has anyone ever paid for a property with a credit card? Would a credit card even be an acceptable method of payment at closing?
I'd really like to hear some stories (If you have one), when you (or someone you know) has ever purchased Real Estate with a credit card. It could be an $8,000 sheriff sale shell, or down payment on a larger scale property
Real Estate Investor · Germantown, MD · Member since 2016 · 9 posts · 9 votes
10y
Just did a deal with a credit card. As it was a quick close and financing took longer than expected. Once my LOC was approved with my credit union I paid off my credit card within 3 weeks. Not sure if this was a good process as I am a newbie but it worked for me and allowed me to get a Great deal, I would have missed out on.
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
10y
@Christopher Stanis that is awesome. I am loving the info this post is providing (The pros and con of using the CC), since I have little (no) experience using the strategy
Investor · Felton, CA · Member since 2016 · 37 posts · 14 votes
10y
This discussion brought up a related question in my head. Does anyone have experience use a credit card to payoff a hard money lender, or used a credit card's balance transfer in this way? I imagine you could set the transaction up in a way to protect the hard money lender from charge backs and other fraud. Perhaps the lender would want to charge a fee to cover and credit card processing charges.
If this is possible, a credit with 0% intro rate or balance transfer rate could be a logical way to refinance out of a hard money loan.
Investor · Rochester, NY · Member since 2016 · 477 posts · 426 votes
10y
If you've bought a property with a Credit Card, you're in good company. I do believe Brian Burke (of BP Podcast Fame) started his investing career using credit cards.
Personally, I looked into using a Barclays Card (8% rate for life on charges/cash advances/transfers, $5 charge for cash advances, no rewards) because I was looking to pay cash for a property using the cash advance. 8% is cheaper than a whole lot of money out there, and I want to buy a house on a Credit Card - just to say I did. I'd fund the rehab with my own cash reserves, then refi or sell it, and do it all again. No different than any other lender really, with better rates than quite a few.
I wouldn't even think about it with interest rates much higher than this, or transactional costs more than a couple of points (which is still better than HMLs.) I would also not be as gung-ho about it if I didn't have the cash to do it with the CC. Remember: banks love lending money to people who don't need it for a reason.
Investor · Gaithersburg, MD · Member since 2013 · 660 posts · 441 votes
10y
It's possible to use credit cards in some situations. As others have mentioned some people will just take them and some cards let you write "checks" against them, etc.
The best advice I can give is to only use credit cards as a convenience. If the only way you can pay for something is to use a credit card (because you don't otherwise have the money), that's a very dangerous road to go down. I always use a credit card whenever I can (as long as they don't charge a % more because I'm doing it) because of the points. You just have to be smart about it. If the worst case situation happens, can you still afford the payments easily? If so, then it's less risky, but I hate not paying off CC's in full every month because it offers an easy trap if you don't.
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
10y
@Jason V. I have not purchased a property with credit cards yet. Thanks for the info, I will research Barclays Card. Is this a business card or personal?
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
10y
I appreciate the feedback @Justin B. I don't have any intention of buying something on credit that I could not otherwise afford. That has always been my relationship with credit (Even before investing). I am considering turning Real Estate into a full-time thing now (I have been part-time at it for 8-years) and I want all my options laid out. I have a plan (And funds) to purchase a fix and flip, as well as a 20% down payment on a Duplex or Triplex. The credit card scenario, is in the event another deal arrises
Investor · Felton, CA · Member since 2016 · 37 posts · 14 votes
10y
@Ryan Cameron Thank you for your response. My hope was to pay the hard money lender using the 0% balance transfer or intro apr, not the higher (even 8-9%) cash advance rate. A recent offer I received offered 21 months of 0%. Even if you paid the full card processing fee for the lender, it could be advantageous.
@Jason V. I have not purchased a property with credit cards yet. Thanks for the info, I will research Barclays Card. Is this a business card or personal?
I think they have one for each. If you have really good credit there are a handful of cards with a permanent ~8% rate. Or you can use one with a 0% for 18 months offer - you'll probably pay some points on the cash advance (5-6%) but that's not much more than HMLs charge, and it's 0%.
Credit Karma and/or Clark Howard are good resources for stuff like that.
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
10y
@Jason V. Thanks, I'm going to check it out, my credit is excellent (I hate even saying it cause it sounds like bragging), but my business is new and I would be the guarantor until I establish business credit
Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
10y
The only time I would use a CC to buy a property is to help make up some of the difference, say for example, I can get 0% rate for 12-18 months and I have 70k and want to buy an 80k property in cash, I would take 15k from my card and buy the property then use the rent and my other salary to pay the card off quickly so essentially you can purchase a cash flow property perhaps 6 or 12 months sooner than you could otherwise.
@David Faulkner I never said I didn't have the money (Which I do). My only reasoning for this post is to find out if it is possible to purchase property with a CC
Oh, for Pete's sake, if you have the money, then use it. KISS before you accidently creative finance yourself into the poor house.
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
10y
@David Faulkner LOL, I appreciate the feedback, but just because I have the cash, does that mean I don't look for more financing options? Who has one million dollars in the bank and spends all of their cash on a one million dollar property?
Flipper/Rehabber · Waterbury, CT · Member since 2011 · 14 posts · 13 votes
10y
I heard of a company that helps you get credit card loans for you to use in real estate investing. I actually got this info from my REIA meeting 2 months ago and I know someone who got $50,000 in all credit cards to use for his rehab. You have to pay the company I believe $15K or 15% for getting you the money.. Here is the info
Dallas, TX · Member since 2016 · 78 posts · 31 votes
10y
Is it possible to open say a $10k LOC, and then withdraw the entire amount and pay that balance in full w/ a brand new credit card that offers 0% for the first 12-18 months, and possibly repeat that several times? Would this be doable?
Investor · Monroe, WI · Member since 2015 · 691 posts · 610 votes
10y
@Ken T. I believe that's called floating a credit card. If it were me, I'd get an 18 month 0% offer, take the cash, then towards the end of 18 months, I'd get another card with the same terms and transfer the balance, you're paying fees in the meantime on the transfers but it could work.
Investor · Maryville, IL · Member since 2015 · 11 posts · 7 votes
10y
If I could, I would. Pay with a CC, reap some reward points for your down payment, pay off the CC when the bill is due. I would definitely not do this if I couldn't pay off the balance immediately. I also would not do it with a cash advance from the CC since those have crazy fees etc.