Can you flip a house on a credit card before the first payment is due?

by | Indy Anna, Real Estate Investing

Can you really flip a house on a credit card before the first payment is due?  Real estate investing with free money off your credit card…

… how to do it…

… and why you should NOT do this.

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Can you really flip a house on a credit?

Can you really buy a house on a credit card?
Can you flip a house on a credit card before the first payment is due?
Should I ever use a credit card to buy a house and can I do it for free?

First let me clear this up right now:
– We’ve done a few challenges on how to flip a house with a credit card before the first payment is due meaning you basically get to use “free” money
– Yes we’ve done it and it is possible BUT you should NOT do this and we do not recommend doing this for several reasons
– The reason for this video is because a few of you guys have asked about the results and how it went, so this is just to let you know how this can work this is NOT a tutorial or something we suggest that you do please do NOT do this, it is not worth it

First, you have two choices with credit card
– Number one you can use the card in the normal way, but very few title companies, courthouses, closing attorneys, etc. will accept that form of payment (although there are a few that will) so there is the second way of getting money
– Number two is that you get a cash advance on the card, this will usually be for a LOT less than the credit limit.  I used a few cards and the credit limit was about 70k but my cash advance was only 30k.

If you used the card normally you need to know the “Settlement Date”
– Let’s say it is the 5th of the month at let’s say 5PM, so on January 5th that means if you use the card right after then it won’t show up in their system until February 5th
– Then the payment won’t be due until March 5th BUT with a grace period you can get 15-30 days extra so the first payment won’t be due until April 5th
– So that’s you basically get 90 days of free money

Not all cards do it this way
– Some check every day or a few times a month, so you have to talk to them and change that and you’ll also need to extend your grace period to at least 30 days
– Also if you do a cash advance (the interest rate will be higher plus) they usually charge you up front, you can get free cash advance cards but they change a lot, two of the cards I used (Barclays, and United) don’t do free cash advances anymore but you can search and find others (but don’t lol)
– You need to have a SINGLE date to work with so you can have a period of about 90 days with no payments, and EVERY thing needs to happen on that day or very close to it because you are working against the clock

The rules of the challenge were that you MUST buy/sell the property before the FIRST payment was due, this really complicated things.

How I did it
– I used about 30k, the property was 20k and the work was 12k but I traded for the last 2k of work
– We sold it for 52k in a hurry to a list of buyers that I had developed for this purpose so we were able to close fast
– To do this it required a LOT of timing for the closing, the rehab materials, etc. in the end as I explained in the video that I made at the time I technically DID get the money “for free” and it was sold before the payment was due but it was only because I had done this so many times and had buyers ready to go on day one

If you MUST do this don’t get a cash advance or use your card to buy the home
– Instead you can talk to the seller and see what they want, just buy that for them and do a trade
– One of the sellers I worked with was going to use his money to buy equipment for his auto shop, so I bought it for him and it worked out well
– By having/using credit cards you’ll be able to improve your credit and have a reserve of cash on standby if you ever need it to buy stuff for a seller

Our PSN are still doing this
– Many of the parents needed help cleaning their credit and getting cards, using them with high ticket items and then paying them off can really help your credit
– So one thing some members and parents are doing is when we have a deal or a seller that needs something like new furniture, anything from Home Depot or Lowe’s, or anything else we can use a card for they will “lend money” until closing and they can make a few hundred or a few thousand dollars a month extra
– Please don’t do this either, until you are making at least 10-30k/mo you should not use any of your own credit or money

Another trick to boost your income, we do a credit repair class for $1,500 and here’s a big secret:
– You can have people use a service like Plastiq to pay their rent/mortgage with a credit card
– Then pay it off with your regular income, but now you can add up bonus miles, cash back bonuses, rewards, etc. we have some parents making an extra $1,000 – $3,000 a month or more
– When done correctly this can also really help your credit score
– This has become another income source for our groups because they can market for buyers and then do the Credit Repair workshop and make an extra $5-10k/month

So in summary:
– Yes you CAN buy a house on a card but please don’t, it is better to just trade stuff with the seller and use your card to buy stuff and not the cash advance, although we don’t suggest doing that either
– You can help yourself and others boost credit and make some side money if you use your card to make your own rent/mortgage payments
– Don’t use your credit or money until AFTER you’re making at least 10-30k/mo, even then you probably want to and shouldn’t but definitely don’t do it before that you don’t need any money or credit to build your real estate business when you do it our way

About the other post mentioned about apartment buildings, there is a great post and class on the 38 Ways to Buy Apartment Buildings Zero Down with Pet Policies

The post is HERE.

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Thanks so much!  = )

~ Indy Anna 

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