On a recent visit to Lowes i was made aware of a new credit card called the “Lowes Project Card”.
In a nutshell it allows you to make purchases on it and pay no interest or payments for six months. It sounds like i could be a good way to finance an entire repair project, materials and installation and pay no interest or payments for six months. And after selling or refinancing the house, one could pay the entire balance of and do it again.
My only concern would be, 1. Lowe’s being more expensive as far as buying materials and/or installation services and paying extra money for the convenience.
What do you guys think about this?
Jay (who’s sick of hard money draw schedules!)
Well you would certainly have to crunch numbers and decide what costs more, Lowe’s higher prices or buying from a cheaper lumber yard with expensive hard money. You may also be able to find the best of both worlds and find a lumber yard that lets you open an account with them with little to no interest and the benefits of lower prices.
When I am fixing up a house, I basically do the same thing. You have to be careful to know when that card reports to the credit bureau. If you have any issues with balances, you can have that card maxed out pretty quickly and that will affect your credit score for the next purchase. The interest rate is not as important for me because I have the rehab costs as part of my loan, and I receive draws after each phase of the rehab is complete. That means the balance doesn’t stay on the card long enough to have interest charged against it. The card is usually paid off within 2 weeks.
Yeah thats exactly how i was planning on using it. Paying it off quickly wouldn’t be a problem.
So do you also use credit to pay for the labor? And are you able to still fix up houses using a reasonable budget?