Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
Hello!
I'm a fairly new landlord/LLC owner. We formed our LLC in May 2012 and closed on the first duplex in August. In April 2013, we closed on our second duplex.
A few months ago we received a business credit card for $15K. We didn't even apply for it really...the bank just kinda gave it to us. That was great.
Now I'm thinking of how to secure our 3rd property. I've been getting a mortgage for each so far and must pay 25% down. The good part is that down payment doesn't have to be vested. I could put it in my account weeks before closing and they haven't cared.
So, my thought is using a 0% check to help pay for the next down payment. But I think I need more credit than this current card. I'm thinking I don't want to max out the one card I have. Do you all suggest any good business cards to apply for that may have the 0% checks? Is there anything I should do with my personal credit to help the odds of getting more business credit cards? I have good credit, always pay on time, but I have some revolving debt.
Rental Property Investor · Decatur, IL · Member since 2012 · 82 posts · 30 votes
13y
Hey Nicole,
I know this is not a business card but I recently got a USAA World Mastercard that has 0% on convenience checks for 12 months. There is a 3% fee for using a convenience check but it is capped at $200 so not too bad at all for the amount of cash you can get your hands on. Obviously you will want to be more careful with the percentage of your limit that you use since it is a personal card and will affect your credit score if you carry a high balance relative to your limit. I am actually using these checks as we speak on a buy-rehab-refi-hold. I like this model for using credit cards because it allows me to zero out all my balances when I refi so that I don't carry any revolving debt long term. If you are going to use the checks for a down payment just make sure you have a plan what you will do when the promotional rate expires.
I have 10 business credit cards and the only one that offered any kind of promotion on convenience checks was Discover Business. They offered checks that were treated as purchases so it was at a more reasonable rate than if it was treated as a cash advance. You might check into this one and see if their promotional offer has changed to include checks at 0%.
What bank gave you the $15k limit with 0% on checks?
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
13y
Hi Jeremy! Thanks for your reply.
For my first purchase, I actually did use my personal USAA card for some costs and then created a Promissory Note between myself and my LLC.
My current business credit card was just 0% on purchases (I'm pretty sure). I'll look into Discover, thank you. I wonder if any banks offering 0% on purchases would switch the deal to 0% checks if you called and asked.
Rental Property Investor · Decatur, IL · Member since 2012 · 82 posts · 30 votes
13y
I have my doubts about being able to get a CC company to change their promotions. I've called several CC's and tried to get them to waive the fees associated with balance transfers or convenience checks but never had any luck. Not to say that it couldn't be done but I think it would be tough to get past the call center operator to someone who actually had the authority to make that kind of decision.? However, with regard to the interest rate on business credit cards in particular, I have been told that you can negotiate that. Right now all of my cards are still at 0% but I will be testing this once my promotional period begin to expire.
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
11y
Even if you don't do this, having a LLC doesn't automatically protect you from lawsuits. The first thing that protects you is not doing illegal things.
People may disagree, but yeah, I'd just have a promissory note between myself and my LLC. Pay off the note just as you would any other debt. I don't see how you'd get in trouble with that unless you stop paying your mortgages or something. And the trouble would simply be the fact that you're not paying bills....not that you made a loan to your LLC.