Using a HELOC and Credit Cards to fund a Flip?

Question

Quick question for all my fellow BPers!

I am looking to do my first flip, and want to fund it using a HELOC. The plan is to purchase the property with cash using the HELOC and then using a credit card to fund the rehab costs. My question is...have any of you used this strategy? Also what tips you may have for me? Thank you in advance for all the replies!

Johnny Lujan

Wilson Churchill · Answer

I use HELOCs and CCs to buy rentals and flips.

Tips:

1. Shop around for the best rate on the HELOC

2. Use balance transfer promotions with the credit cards, or use Home Depot and Lowe's credit cards to finance the rehab. Ask for credit line increases after they have been paid off and your scores bounce back, and apply for additional cards simultaneously to limit the impact on your credit.

Dave Wells · Answer

@Johnny Lujan did you get your 1st flip completed using money from your HELOC and CC to complete the flip?  I am very interested in learning from your experience as I am thinking of dong the same thing.

Wilson Churchill · Answer

No problems. You just need to make sure that you can transfer any remaining balances onto other BT promotions, if you want to keep your interest payments low. So use the cash flow to pay down the cards. The more you pay them off, the more credit they will extend. The only other risk is that the HELOC interest rate might rise, but this is offset by the lack of closing costs when it is established.

Johnny L. · Answer

Thats some great reassurance that someone else actually does it! Have you run into any problems using this method?

Great tips, ill make sure to use these!

Thank you Wilson!

Using a HELOC and Credit Cards to fund a Flip?

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