Accessing Credit cards

What does anyone out here think about Accessing available credit card credit to purchase and rehab a home then flip it?
Here’s the situation. There is a 3 bedroom 2 bath foreclosure on the market in my Town. 70% of the remodel is done (including Kitchen and 1 of 2 baths, most drywall and vinyl siding and windows).
Asking price $38,500
Finish remodel $10,000- $12,000 (Mostly remaining bath, flooring throughout and fixtures)
Taxes and holding costs $10,000- $12,000

Homes of this same sqaure footage, # of bdrm’s and baths are listing in the same general area at $95,000 - $130,000

I have approx $60,000 in unused credit card credit and would like to access this, via credit card access check which have a generally low interest rate ranging from 3.9% for one year up to 9.9%, to purchase , rehab , and hold until final sale.
Opinions, Questions, comments or other expressions of optimism???
Thank you

I am not against it, but not for it either. I am indifferent.

Once you go above 50% of your available revolving credit then your credit score will take a hit. It does recover when you pay down your debt. I would just be sure of your exit strategy on the rehab as well as have a back up plan for that exit strategy to be sure you can pay down the debt.

Not to hijack the topic but I have a similar question. Down payment requirments are about 25% in my area. I have access to unsecured cc’s that will allow me to take cash out with 1.9% interest for a year. I am thinking of doing this for all or part of a down payment on a building that is already done with tenants in place to buy and hold and refi before the interest on the card goes up. My only concern is the hit to my credit. Anybody think this is a good idea?

Exit strategy is to Flip within 6 months and pay off credit card debt. Same as if I borrowed from a hard money lender or mortgage company. Backup exit strategy , in case the house doesn’t sell quickly, is to take out an 80% mortgage ,payoff credit cards and rent it out.
I’m thinking of it this way…Why go through Credit checks and all the mortgage company paperwork when I have access to this much credit without all of that. Access the credit cards for a short time and get the deal done.

My wife and I got our start by using a cc to get cash at 3.5% to put the down payment on our first property. You have to start somewhere. If the interest rate is low and you don’t mind your credit score going down for awhile, I don’t see a problem with it. It worked well for us.

Be careful. Most credit card’s these days are also charging a 3% cash advance fee that needs to be figured into your calculations.

I should have specified more in my post. We use USAA (AWESOME company for military people). I called them up and told them what amount of money I was looking for. They told me I could have any amount up to my CC limit and it would be just 3.5% for the life of the balance…no hidden fees or anything like that. Sure my credit score took a hit from it, but that was the only major purchase I wanted to make at that time so the lower score didn’t keep me from anything else.

Normally, if you can get anything from USAA it’s gonna be cheaper. My homeowner’s insurance for this year is $250!


Some stores like Home Depot have offer like “no pmts for 1 yr. if purchased with a Home Depot card”. That can help save some upfront rehab costs. If you can get the credit line needed to buy, rehab & flip, I can see how it can work.

If you have good personal credit and a business entity, you should probably start looking into establishing business credit.

Get the credit cards in the business name (you’ll need to personally guarantee them though so there’s no free lunch). But many business cards will not report on your personal.

So if your business cards have 40k in debt, your personal credit score won’t be affected at all.

Only makes sense if you have an exit strategy to pay off. But definitely a lot cheaper than Hard Money, thats for sure. Only problem is building up your business credit.

Other sites will go into better detail. If you’re in it for the long haul and do things responsibly, you can really build up some nice some credit with and even without personal guarantees that don’t show up on your personal credit scores.

If you read the fine print that goes along with the cash advance offer, you will see,

There is a transaction fee of 3% on cash advances ($75 maximum on balance transfers and convenience checks)

At least that is what is says on the offers I am getting. The transaction fee is in addition to the interest you will be charged.

I just got the same notice. It also talks about late payment fees. It doesn’t apply to what I did last year. My deal was one of those things where I called up and “worked a deal” with them. There was no transaction fee or anything beyond what I’ve posted. I was just told my min. monthly payments would be 1% of the balance plus the interest for that month. I said no problem and have been really happy with the process.
That’s the great thing about USAA. They also beat a competitor’s rate for our vehicle loan too. Just had to call and mention it.