All Forum Posts by: Bob Daniels

Generally I don't use this as my primary source of funding, I typically have enough cash on hand and use these when my projects go over budget or if an HVAC unexpectedly needs to be replaced etc.  Having access to super cheap money that won't get shut off during a recession allows me to carry slightly less cash reserves.

 For Discover, it's part of their SCRA benefits so you need to go to their website and sign up for it (Servicemembers Civil Relief Act, the same law that lets you terminate leases early when you PCS etc).  You need to provide simple information such as the date you joined the military and expected departure date so that they can verify that you are in fact in the military.  It usually takes about a week for them to run their checks, and after that you should get the 5.9% rate. 

Every CC offers SCRA benefits, however by law, SCRA only applies to pre-existing debt you had prior to joining the military.  The good news is that some CC companies go above and beyond what is required by law.  Discover extends their low interest rates to all military members, regardless if the debt (or the account itself) was pre existing or not.

Other notable CC items for military members are that both Chase and AMEX eliminate all of their random fees, including on accounts that were opened after joining the military.  This is beneficial for several reasons, but I use it mostly for cards that otherwise have a high annual fee.  For example, every single military member should own a Chase Sapphire Reserve.  The card typically has a $450 annual fee (free for military) and in return, you get $300 worth of travel reimbursement every year.  This could mean uber rides, hotel stays, airline flights etc, as long as the spending is classified as 'travel' by the merchant swiping the card, then it is eligible to be reimbursed.  Even if you plan on living frugally and not doing any traveling for this particular year, you can go online and buy $300 worth of airline giftcards and use them whenever you want.  There are numerous other cards out there that offer good benefits like this, but this one is probably the best due to its simplicity.

@Jay Anderson You are correct, banks don't want you to borrow money to use as the down payment.  That is why if you go this route you forgo the bank entirely.  Either by buying a home entirely with credit cards and then refinancing before your grace period wears off and you need to start paying interest on those cards.  Or you can buy a fixer upper home that is still in good enough shape to qualify for traditional financing, and finance the home the regular way, and use credit cards to fund the rehab portion of it.  

A few words of caution however, is that poor planning leads to devastating results with this method so you need to know what you're doing prior to starting.  If for whatever reason you get stuck paying full CC interest rates then it will destroy any deal.  Also while you have the money on your cards, your credit score will plummet as your utilization rate on those cards skyrockets (utilization rate comprises 30% of your total credit score).  This means your credit score could very well drop by 100-200 points while you are doing this.  The good news is that when you refinance and remove the debt from your cards, your score will return to its normal levels fairly quickly.  

If you have each property in a separate LLC as some people advocate for, then you would need to keep each properties expenses separate from one another.

Personally I keep everything together.  I couldn't imagine filing and renewing that many times with the state each year, or going to home depot and needing to check out 5 different times because i'm buying items for different properties.

 Cards with unlimited spending exist for celebrities and other filthy rich individuals, but it's not something you or I would ever 'apply' for.

However you can combine 4 different 25k cards and reach the same effect.

I'll second the SMART use of credit cards for funding.

While you may not be able to fully fund a deal on your cards unless you are buying super cheap assets, they are a fantastic way to fund other portions such as rehab costs. If you use a card with a zero percent APR intro offer or balance transfer you may be able to fund your rehab without a private lender. Just make sure you fully repay the amount prior to your introductory period ending or else you will royally screw yourself with 24.9% interest rates.

Additionally for the military members out there, you can often get super cheap deals on your credit cards.  Discover card offers any military member a permanent 5.9% interest rate for as long as they serve.  I've carried a balance several times to fund deals with these cards because at 5.9% with no points or fees, it's the cheapest and easiest money around.

*Disclaimer*  My account has only been open for 3 months, which isn't nearly long enough to draw a solid conclusion from.

I recently invested 1k with them in their long term growth fund as a test run to see how accurate their claims were.  This fund supposedly had the highest rate of return overall coming primarily from appreciation.  

I opened my account on Aug 15th, and during the last ~3 months, my portfolio has gone up by a combined 1% (appreciation and dividend). While this number is overall very low as it pencils out to only about a 4% return per year, I found it interesting that my dividends were twice what the appreciation was considering this was supposedly a growth fund and not a dividend fund like their heartland REIT. I'm not sure how often they do an assessment on the valuation of their properties, if it's quarterly or annually.

The dividends seem very high at .7% for the quarter, which extrapolates to 2.8% for the year.  Their website claims dividends for this fund should be roughly 1.3 - 1.4% for the year so this is on pace to double that.  We will see what the overall return looks like in 9 months when they have had a full year to go through a full evaluation of their assets valuation at least once.

If your an out of state investor, I would say that the company you choose to go with is more important than the city in which they operate in.  

Each of the cities are good for cashflow, but using the wrong company can cause you to lose boatloads of money even in the best of markets.

Journalism in 2019:  It doesn't have to be true, it just has to be sensational.

I'm quite positive that not even the author believes what he wrote, but its sensational and people clicked on it which generated massive amounts of advertisement revenue for the author.  

Opinions will obviously vary on this, but if the numbers work then the numbers work.  Don't lose a deal because you want to try to squeeze an extra few k out of it.

If you counter again you may come off as being cheap and difficult to work with.  If it's a deal at 139 I would accept, and then possibly try to negotiate lower based on the inspection report.

It really just depends on how comfortable you are with debt, and what is an acceptable amount of risk to you.  The stock market on average returns somewhere between 9-11% annually, which is very likely more than what you would pay in interest on your heloc.  So theoretically you will come out ahead by taking the loan and investing any remaining money.  

The drawback of course is that seeing a positive return in the stock market is not guaranteed in the short term, whereas having the loan is a guaranteed expense.