Home Depot Credit Cards for Flipping?

Question

Hello fellow BP members! I have recently been looking into purchasing a property to flip, using private money to fund the purchase of the property. I plan to buy something that is in need of a moderate rehab, doing things such as flooring, painting, interior trim, appliances, etc. I am a contractor, and would likely be doing some of the work myself, to help stay busy during the slow winter months here in Eastern Washington.

I have some cash savings that I am able to invest into the rehab of this project, but have also been looking into using home depot credit cards or their "Project Loan" that they offer. My thoughts are that if I use the credit cards or project loan, I will be able to mix them with some of my current cash savings so that I can afford to do a larger rehab on the property that I purchase. I would be keeping some of my cash savings to ensure that if I cannot flip this house on schedule, I will be able to pay off a good portion of the credit and be able to turn it into a rental if necessary.

My question is, has anyone had this similar experience with credit cards or project loans? And what have others experienced when they use a mix of their cash savings and credit cards to fund a rehab project on a flip?

I appreciate all the feedback, and best of luck to you all in your investing!

Thanks!!

-Garrett

Will Barnard · Answer

My pleasure, happy to help. Using this type of partial financing is very beneficial for any rehabber or developer as you only get charged interest once you purchase the items. So for example, if you borrow $100k for rehab from a hard money or private money source, you start paying interest from day one on the entire $100k. But lets say you only borrow $75k from that source and get a $25k credit line at HD, you can save interest expenses on each and every job.

Jesse Greider · Answer

I have to say this is a great idea. Definitely looking into this. Thanks!

Mike G. · Answer

@Will Barnard excellent idea to get the commercial revolving credit account that Home Depot offers. Ill have to look into that further. thanks will!!

Will Barnard · Answer

Yes, they do have some good terms and getting a commercial revolving credit account has its benefits in addition to the terms.

Garrett Maki · Answer

I haven't used this method, it seems that if at all possible, it is easier to use either cash or incorporate the rehab into the loan. I may still try it at some point, they have some pretty good terms.

Will Barnard · Answer

Looks like an old post recently revived but why would you not take advantage of a Home Depot credit account? Unless you can borrow unsecured debt for less, it is absolutely a good idea keeping in mind the importance of not overleveraging.

Bo Baker · Answer

@Garrett Maki, did you ever give this a shot? Just curious how it worked out for you?

Andrew B. · Answer

I use my home depot card for personal stuff and I like it. any purchase over $300, you get 6 months interest free financing. they also run promotions, where you can get up to 24 months no interest when you spend over a certain amount.

Aron D. · Answer

You can try all sorts of funding (hard money loans, 0% credit cards, business lines of credit, home equity, etc.). The main thing to consider is can you pay the debt service while the house is under renovation and while it sits on the market/escrow. Once you get cashed out at close, then everything is fine. It is a double edged sword where it offers more flexibility and leverage, but at the same time is equivalent with playing with fire. You can get burned if anything goes sideways with your deal.

Home Depot Credit Cards for Flipping?

Home Depot Credit Cards for Flipping?

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