Using Line of Credit and Credits Cards for BRRRR

[Jonathan Shepard]

If all aspects of a BRRRR deal have been reviewed and appear to work ("all in" budget including holding costs work out to be 70-75% ARV), what are some of the risks or pitfalls associated with funding a deal with a few small lines of credit and low interest credit cards?

I see this being beneficial on one hand because I avoid paying points for hard money but have a similar interest rate as well as having cheaper closing costs because I will be the only one of the deed.

I also see where this could be an issue during the refi due to higher DTI. This also does not seem very scalable but I'm just trying to get some experience at this point.

Thanks in advance for any help or advice.

[Michinori Kaneko]

there's no issue at all if you can maintain your credit score fairly high even after your utilization rate goes up and qualify for a loan (720 or higher preferably to get the best rates). I suggest asking for credit limit increase on every card annually to make sure you can lower the credit utilization rate as low as possible. BRRRR is great, and by all means, if you can make the numbers work and qualify for the loan, then you def should try that strategy out!