From an investor’s perspective, what have you found to be the best credit card for travel points and/or cash back? The card will be used to purchase building materials and pay contractors using a hard money draw system (the card will be paid off within a few days each time it’s used). Curious what you use (or have used) that you love. Also would love thoughts on what NOT to use if you’ve had any bad experiences.
Sprinkle in new cards with big rewards for spending $1-$3k in first 30-90 days. ($300-$1,000 bonus) Then I just throw those cards in the safe for emergency use only.
I use the Chase Sapphire Reserve and really like it, especially because we travel quite a bit. The annual fee is definitely hefty, but for me the travel credit, points and other benefits make it worth keeping.
That said, if the majority of your spend is going to be building materials and contractors, I’d compare cards based on what they earn on those purchases, not just the travel rewards. A lot of travel cards only give their base rate on that type of spend, so you could be leaving a lot of rewards on the table.
I do like your strategy of putting the rehab expenses on a card and then paying it off as soon as the hard money draw comes in. If you’re disciplined about paying it off, that can turn a pretty significant rehab budget into a nice amount of points/cash back without paying interest.
Personally, I’d probably look at a good business card for the rehab expenses and keep a premium travel card for actually using/redeeming the travel benefits. Just make sure your contractor doesn’t charge a card fee that wipes out whatever you’re earning in rewards.
Sprinkle in new cards with big rewards for spending $1-$3k in first 30-90 days. ($300-$1,000 bonus) Then I just throw those cards in the safe for emergency use only.
Laura, I'm in the business funding industry, and I'd actually recommend looking beyond just travel points and cashback rewards. One strategy I help real estate investors explore is leveraging 0% APR business credit cards.
Here’s why I think they’re worth considering, especially for investors looking to grow their portfolios.
1. Interest-Free Financing: Some business credit cards offer introductory 0% APR periods of 6–12 months. This allows qualified investors to purchase building materials and cover eligible renovation expenses without paying interest during the promotional period, assuming they meet the card's terms.
2. Preserve Your Cash Flow: Instead of tying up your own capital in renovations, you can leverage business credit while keeping more cash available for unexpected expenses or additional investment opportunities.
3. Protect Personal Credit Utilization: Many business credit cards don’t report regular balances to personal credit bureaus, although policies vary by issuer. This can be extremely beneficial for investors who want to maintain strong personal credit profiles while continuing to qualify for mortgages and additional financing.
4. Flexibility With Hard Money Draws: Rather than depending entirely on when your hard money lender releases reimbursements, business credit can help bridge the gap between purchasing materials and receiving your draws.
5. Scaling Your Portfolio: Having access to additional business credit can give you more flexibility to manage expenses across multiple investment properties without exhausting your available cash.
6. The Benefits of Aged Shelf Corporations: Something else many investors overlook is how their business structure and entity age can affect certain funding opportunities.
I also have access to aged shelf corporations, which are legal entities that were established years ago.
Some lenders have minimum entity-age requirements, and an appropriately structured aged corporation may help meet those requirements, potentially opening up additional financing options.
For investors seeking larger amounts of funding, this could be worth exploring because certain programs have higher financing limits. However, the corporation’s age alone doesn’t guarantee higher approvals or replace actual operating history. Lenders may verify ownership changes, business revenue, and personal credit qualifications.
Here's what I would emphasize: If you're already paying your credit card balances off within a few days, you're generally avoiding purchase interest anyway. The biggest additional advantage of 0% APR business credit is having the flexibility to carry a qualifying balance temporarily without interest during the promotional period, with a repayment plan in place before it expires.
I’m Nick with 850Floyd Financial, and I specialize in helping business owners and real estate investors structure their funding strategically.
I’m curious, Laura, are you mainly looking to maximize rewards on your current projects, or would having access to larger amounts of business credit to help scale your real estate portfolio be more valuable to you?