How do you make renovations when you're cash poor?

How do you go about renovating your home to get ready to sell/rent when you’re cash poor? Should I put the renovations on a credit card or obtain a home loan/ equity line of credit? Does it make a difference beyond whichever offers the best interest rate?

My approach to jumping into investing will begin with my first home. I have lived in this home for 8 years and am ready to MOVE! I think this presents an excellent opportunity as my first investment experience.

I want to sell the home depending on how much I can get for it once I’m finished renovating. Plan B is to do a lease/purchase with it.

My current home is a 4-level split with 2 baths and 1 car garage but the whole home is severely outdated (kitchen, bathrooms, etc). I just started painting the family room this past week. I planned on doing most of the updating myself (laying laminate flooring, painting, etc) but wondered with such a massive amount of changes that need to be done, should I go all out and hire someone to do those things quickly and professionally or take my time and save the money for the down payment on my next home?

Thanks for your advice.

You offer mixed goals when you say you want to sell/rent, but then you say you want to sell versus do a lease/purchase. If you want to sell the place, you will probably treat the renovations differently than if you want to rent and hold or do a lease purchase.
Your goal for an immediate sale is to make the place as desirable as you can for a home buyer with a minimal amount of cash in a minimal amount of time. In that case, you may want to subcontract the improvement work to expedite the sale and minimize holding costs.
If your goal is to hold and rent (I would treat a lease option like a rental) I would spend a minimal amount of money to make the place functional, clean and safe; then I would rent it out. I would worry a lot less about things being outdated on a rental than on a flip.
Treat your debt like a loaded gun. Do not use a HELOC or a credit card for improvements if you can avoid it, especially if it seems like your profit margins or your cash flow seem thin.
So, if I were you, I would decide whether I want to keep the place and for how long. Then I would decide what kind of financing I wanted to use, then I would decide which improvements need to be made and how much they will cost.

My philosophy is to do like major corporations do. When DuPont or Exxon decide to build a new plant or overhaul an existing plant, they don’t spend operating money on capital projects. I don’t use operating funds on capital improvements either. What I do is make my investments pay for improvements on my investments. When I buy my houses I borrow enough to purchase them and fix them up. When a tenant breaks stuff, I fix it using funds from the deposit. If a house is occupied long enough that maintenance is needed (new roof, repainting, etc) I refinance the house and use those funds. That is my advice to you. I would refinance the house and pull out the money to fix it up.

Credit cards are consumer debt (bad debt) mortgage on an investment house is investment debt (good debt) I would look at it like an advance payment on the money I will get when I sell the house anyway that I use to fix the house up.

Thank you both for the insight.

Originally, I thought the same sort of renovations needed to be done on the house regardless of whether I wanted to sell the house or lease it out. But I can see there is a difference. I will sit down and think about what end result I am after and renovate accordingly (with funds from a re-fi).

Thanks again!

You may want to have an appraiser come in and give you an idea of what your house is worth now and after repairs. They can give you some focus on what to renovate & how much to spend. Then you won’t overimprove your property.

Excellent idea.
Although I’ve never posted anything on this site before, I constantly read all of the posts. I really like the fact that everyone is so helpful.

If you decide you are definitely going to sell and are confident you will complete the repairs and sale within 1 year, its hard to beat the Home Depot credit card.

IIRC, for purchases over $300 you can defer payment and interest for up to 1 year. So…if you pay off the specific purchase within 1 year you get a free 1 year loan. However, again IIRC, if you fail to pay off the purchase within the 1 year period you owe all the interest accrued during the past year.

I’ve used it for several major purchases on rehab/flip materials and paid off the credit card after selling the property (within 1 year). Never a cent of interest owed.


What does IIRC mean? Does that Home Depot Card let you defer pmts. on multiple puchases as long as it’s over $300? That how I understand it. It’s a great option for the short term finance.

Sorry for the shorthand.

IIRC = If I recall correctly.

Per my experience with the HD credit card, HD will defer payment and interest on multiple purchases over $300 each up to the credit limit of the card. Each purchase is trreated independently regarding repayment and deferment timing.


I can also recommend jdforest’s Home Depot card plan. I have used it a lot. Just keep an eye on that statement so you don’t pay the 24% or whatever sky-high interest they charge if your 1 year runs out.

Good luck.

Yeah, I’m sure they count on people not paying it off in 1 yr. without reading the fine print. I learned my lesson with Best Buy on that kind of deal. I thought I only had to pay the interest on the remaining balance. It ended up costing me $150 in interest.