All Forum Posts by: Johnny L.

Originally posted by @Don Petrasek:

@Johnny L. read the fine print on the 0% APR, its likely that you'll pay 2%-3% (of the amount advanced immediately) if you do a cash advance to pay a contractor who doesn't take credit cards. Not a show stopper but important to understand you wont be getting the money for free. I bought my first rental house and paid for the rehab completely on credit cards (purchase price was $9000 I think) and it worked out fine. Figure the cash advance fee in to make sure you aren't cutting it too close (Odie's point above)- put a really conservative estimate together of what its going to cost you to renovate the house and then add 25%, that will be closer to the actual cost.

 Yeah for cash advances they do charge a fee. Which is still much cheaper than a hard money loan. I see what youre saying though! I appreciate the advice! As I analyze deals ive been adding 20% to the rehab cost to cover my bases but I may bump it to 25% due to your advice. Thank you

Originally posted by @Odie Ayaga:

When you say you have cash reserves how much are you talking? When you say it's enough for houses in your market how much do they go for? How much of a line can you get on the cards? Two things to consider:

1) The reason I ask is because you don't want to get stretched thin on your first flip. They tend to cost more in repairs than expected, fetch less than expected and take longer than expected. While it's cheaper than hard money if you stay in budget, you'll need a plan if you go over so it may be beneficial to go hard money and use your reserves for overruns and emergencies.

2) Will you be satisfied only working on a single property to completion if another opportunity arises while you're working on the first? If not you may not want to tie all your money up in a single property which could take far longer than expected.

1) Definitely! I understand what you're saying. What I mean is I have enough cash to buy a home and have 10-15k left over in reserves. The credit limit is around 30k. I don't plan on doing a complete overhaul flip for my first go round. I estimate the rehab will cost at least 20% more than I will estimate so I have some padding there. I also estimate that it will take at least 3 months longer to complete than expected. I can't seem to find a hard money lender that will lend me less than $75k. Which I don't need. I only require around 15k-20k. If I can find a hard money lender to lend even just $50k that may work. Also since I just started and have no experience under my belt im finding it hard to find a lender to lend to me.

2) Yes, 100%. Especially as im just starting out. I want to make sure I can focus on one at a time at first to make sure I get the process down. I plan on just doing a single flip or two flips my first year. 

I appreciate your help and advice! If you have any advice for me with hard money lenders id love to hear it! Is it correct that once those loans mature the full amount is due? Most hard money lenders ive seen the loan matures in 13 months. Whereas the credit cards mature at 15.

Originally posted by @Aurus J. Sanchez:

@Johnny L.

If I were you I would you use the cards. 15 months is enough time to pay the car back and do another flip. I’m currently doing that now with a program called fund and grow.

It’s a service that helps you negotiate get the most out of buisness cards and you get more money every quarter on those cards. And every month you just pay the minimum but it’s only for 12 months instead of 15 months.

I hope this helped!

It did help! Thank you! I don't want to wait another year to get into the game. I also want to minimize risk. Ill be able to cover the minimum payments and paying no interest for 15 months is much better than a hard money loan. As you mentioned 15 months is plenty of time to complete a flip. Its good to hear from someone who has experience with credit cards. 

Hello fellow BPers!

I have been an agent for the past 5 years now and started educating myself on flipping a couple of years ago. I have read as many blog posts, books and watched as many YouTube videos that I can on the subject (No guru youtubers). I now have enough cash reserves to buy a house cash in my market. However I do not yet have all of the money needed to fund the rehab portion of the deal. This is my question to you...do I wait to save up more cash to fund the whole deal including the rehab? Or do I utilize 0% APR credit cards that only require the minimum payments without interest for 15 months? Specifically looking at the Chase Freedom Unlimited card. I would have enough cash to cover the minimum payments each month and then pay the whole card off once we close on the deal.

What is your opinion? Thank you in advance for your responses!

@Deren Huang

How much success have you had calling FSBOs and Expireds? Which do you find more success with?

@Mindy Jensen

Youre the best Mindy! Thank you for the clear and concise answer!

@Nicole A.

Hey Nicole! Thank you! Ill make sure i don't mention renting out the rooms. Wow i need to look into that 5% down conventional mortgage. The main reason i was asking was because i want to purchase a house and live in the cottage in the backyard while i rent out the house. I wasn't sure if this went against FHA regulations

Mindy Jensen Mindy! I always appreciate all of your advice you post on the forums! Thanks for responding. The property has 2 cottages and then the main house. I was going to live in the 1st cottage, use the second for storage and then rent out all of the rooms in the main home. Using FHA financing

Brent Coombs Meaning that I'm renting out less than 5 rooms?

Chris M. Thanks so much Chris for the clarification! I will be using my regular income to qualify. It will be my primary residence and I will be living on the property even though it is in a cottage in the backyard. Looks like I will push forward with it