Cash from credit cards for downpayment

[Reggie Dumont]

I was recently in conversation with a fellow investor who just started out, He explained his strategy for buying low cost multi-families is by using cash from credit cards when they offer o% for 18 months or whichever time period. Once he closes on his home, he uses a portion of the monthly profits to pay the credit card off, and if the balance exceeds the 18 month period prior to interest kicking in, he does a balance transfer to another credit card. is this a good strategy? Im assuming there's risk, depending on how much you can borrow and ensuring the income from rentals will cover.

Any comments on this?

[Bob Okenwa]

@Reggie Dumont

If you're buying with cash and can BRRRR the property, it may work. But you'd really have to be spot on with your numbers in terms of ARV and rehab.

Conventional loans will not allow the borrowing of money for a down payment to come from unsecured funds such as credit cards or personal loans.

Lastly, even if you could pull this off, like @Jennifer T. stated, you'd more than likely need multiple credit cards with 5 figure limits. I'd only use credit cards if I planned on doing a cash out refi or a flip and even then, I'd still only use them for rehab purposes only.