Buying a Foreclosure on credit cards?

Question

I saw an article on it here:

https://www.biggerpockets.com/renewsblog/2013/03/16/real-estate-credit-card/#comment-230238

and one guy in the comments said he would purchase entire homes via credit cards.

So financing the Rehab costs thru a Credit Card could be a no brainer, if you have high enough limits and low rates.

But what about the actual purchase of a foreclosure?  I can probably scrape together a combined credit limit of $200K or more between my wife and I over several cards, so when would that make sense on an 80K purchase?  It seems like if I could avoid doing a mortgage entirely then I can skip the junk fees – appraisal, points, underwriting, lender's title insurance, etc, etc.

But instead, I expect I would have a 2-3% vendor fee to pay by CC, right?  And how would this work?  Paypay, Plastiq, Venmo?  Who is buying homes using a credit card at the title company?  If I could classify it as a purchase and not a cash advance, it would at least qualify me for the points, which would offset some of that 2-3% vendor fee, and get me to Diamond status at Hilton or Sheraton real quick.

Is anyone doing this now?

James Maradits · Answer

You may very well be right, but I could swear I just got a booklet of "Convenience checks; Consolidate high interest at a 0% APR intro rate."  Regardless, there is probably a way around it using paypal or something along those lines if you're crafty.

James Maradits · Answer

I've gotten multiple cards with 0% APR for the first year promotions. One of them even came with a book of checks linked to the account. If you could write yourself a check with the funds to use and pay it back within the no interest period you'd be golden.

You can usually get a card at the big box hardware stores with a 6-12 month 0% APR intro period and use that to fund your materials as well.

Bill Briscoe · Answer

US Bank just approved me for a 15 month 0% interest business card  offer.  I haven't received the card so I don't know what the credit limit is yet.

Jeff B. · Answer

I've got a drawer full of cards and NONE will go 0% for one year - - heck, they nick you after 30days of the transaction and my FICO is above 800 too.

Share with us please, where can we too get such favorable cards?

Jeff B. · Answer

At 24% interest for cash advances?? ouch.

Jeff B. · Answer

@James Maradits  Sure - - those checks are considered as purchases, but  they look at the PAYEE and verify that you are consolidating another creditor.  Write one to an escrow company for a deposit, downpayment or closing costs and you'll be sorry.

Remember, these companies are in business to get into your pockets and not substitute for bankers.

Funds to a closing company are typically via a Cashiers Check or Wire Transfer and closing will be delayed until any other form of payment has cleared collection, Paypal will hurt too.

Jeff B. · Answer

ZERO % APR during the first year applies to PURCHASES, not cash advances.  Like I said, I've got a drawer full of these cards and did balance transfers all the time (which are treated as purchases).

Linda S. · Answer

When we have utilized it, it was 0% interest for a year and a 3% fee, and in 1 year we'll do the HELOC... obviously 24% would be insane.

Linda S. · Answer

@Bill Briscoe@ Most banks/title companies require a wire transfer or money order, so the financials form must be in a liquidated state.

You'd have to do a cash advance or write yourself a check from your credit card.      We do the bulk of our remodeling costs  through credit cards with low fees, or 0% intro fees, and then we do an equity loan to pay it off.    Essentially it is an easy to way to get money and buy you time, but not a long term strategy.

Buying a Foreclosure on credit cards?

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