Using Credit Card to Finance a Flip

[James Lambert]

Hey Everybody,

I am new to investing but I have been working with a mentor. He just presented me with an opportunity to flip a property with him.  I have 2 credit cards with a combined limit of $25K. Is there any way that I can use these cards to pull the cash needed for this flip? All answers are appreciated!

[Linda Weygant]

I've used credit cards to finance my BRRRs and it works like a charm.

I have one credit card that gives me cash back, so I'd charge some on that, but pay it off in full every month in order to avoid interest charges.  Never charge more than what you can comfortably pay in full (good life lesson in general).  

The other way I'd use these is to pull cash advances. For me, my offers were 0% interest rate for anywhere between 12 and 18 months with anywhere between a 3% and 5% cash advance fee. I'd make minimum payments on the cards during the remodel phase. Then at the refinance phase, pay it all off. Way cheaper than a hard money loan and had the added benefit of every single card (all 6 of them) wanting to increase my credit limit after they were all paid off. Yes please! Had a grand total credit limit increase of $18,000 across all 6 cards for my next BRRR (which I happily used again).

I've also used the cash advances to make the down payment on a purchase (just required 60 days of seasoning in my bank account) and I once pulled the cash advances to loan out to somebody else at 12%.

The key with using credit cards is that you've got to be disciplined and you MUST have a Plan B for getting them paid off if something goes wrong with your plans.  Be careful and things will be just fine.