I am ready to get started on doing the BRRRR strategy on a single family house in Phoenix in 2 weeks.
Please give me suggestions for the best way to cover rehab costs (finance, credits cards? which one?, personal savings)
And any other newbie advice more than welcome! Super nervous!!
Thank you! 😃
Personally I wouldn't use credit cards to finance a renovation (at least not personally guaranteed ones) - that sounds like a recipe for disaster. I would start with personal savings or a private loan, and worse case go with a reputable local hard money lender.
I also wouldn't wait until 2 weeks before the project starts to figure out how to fund it, but thats a different post.
Hey @Krishan Jitendrabhai As mentioned above It would have been good to have these funds lined up much earlier. That being said a credit card syndication product may fit well here. This will allow you a much higher approval amount then simply getting approved for one card by itself. They also sit at 0% when not in use. Generally not a great idea to fund an entire renovation with high rate credit but investors do use these lines all the time for the right reasons such as smaller renovations.
Thank you @Joe Norman and @Jason Shackleton I have rehab budget savings $50k and some more. I should have been more clear that I plan on using the savings and refinancing it to take the money back out. But wanted to see if there was a better way to go about it!
Will stick with keeping it simple at least for my 1st project!
But really appreciate your help! Thank you!
@Krishan Jitendrabhai Use of a credit card or line of credit in your situation helps to track the expenses and push out the financial liability. It is good if every time you do something for this rehab you use a specific account instead of intermingling with your personal funds.
The important point is Pay credit in full from your savings when due. Then you can push it out a month but won't have any finance charges.
If you will use a big box store for supplies. Become a pro/ and or use their card. If you hire trades (electric, plumbing) they usually prefer checks.
@Colleen F. Hey thanks! that is quite helpful! :)