?Creating Money for Rehab

[Stephen Collins]

You have to start somewhere. Well, I guess you also need money to start. I am under contract on a foreclosure in town, that I plan to fix and flip. I did my homework, I know my CMA, the house is in a great part of town (schools, parks, shopping), the house just needs some love. I plan to move into the foreclosure (property B), while I rent my SFH out (property A). I have a tenant lined up and it will cash flow slightly. Good to go with that.

Unfortunately I spent the majority of the cash I have on hand, on things like closing costs, and my down payment. Now I have property B which needs about 30k in rehab (I have a detailed budget with quotes). I am thinking of taking out 0% APR credit cards to pay for the rehab, and then selling the house, paying off the house note, and the credit cards before I am charged any interest and pocketing the difference. What other options are there?

What if I spend the rest of the cash I have on hand to make the biggest "bang for my buck", and instead of taking out credit cards, try and squeeze any equity out of it with a HELOC. I can use that money to pay for the rest of the rehab, and then sell property B, pay off both notes, and pocket the difference.

I know I should have 100% of the cash I needed to start and finish this project, but I needed to start somewhere. The rehab is for cosmetics, if it doesn't get done right away it will not affect my health or safety. Worst case I live in an ugly home for a while while I save back up.

I am looking for some creative ways to raise money to finish this rehab, sell, and start the process all over in about 12 months.

[Josh D.]

Using credit cards is not a bad option in my opinion. I've funded many flips this way, just make sure you have some funding for the monthly payments and pay the cards off when you close. There are plenty of 0% APR credit card offers out there for 12 - 18 months. If you need extra time plan look for other credit cards that offer 0% balance transfers.

Another option if you have a Lowes near you is to get a Lowes credit card, they offer 0% for 18 months, you also get 5% off when you use your card. You can also buy 10% off lowes coupons on ebay and use those for every purchase.