Credit Cards

How To Buy Real Estate With A Credit Card

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 6 minute read

Want to get the most out of your real estate investment? Look no further. If you want to follow in my footsteps, here’s what I did. In addition to points and miles, real estate investment has been a long-term passion of mine. From flips to BRRRR properties (buy, rehab, rent, refinance, repeat) to house-hacking and owning a lot of rentals, I’ve done it all!

Using the finest credit cards for my purchases has helped me save hundreds of dollars over the years. I’ll show you how to use credit cards to make real estate investments in this post.

How Credit Cards can Aid You in Achieving Substantial Real Estate Returns

Spending money is inevitable when you invest in real estate. When it comes to investing in real estate, whether you’re a novice or a seasoned contractor, there are a lot of costs to consider. With that in mind, it is imperative that real estate investors use credit cards in order to get the most out of their ventures. You might as well make the most of the time you’re spending studying how to invest money.

Investors in real estate may now be divided into two broad categories, each of which can benefit greatly from the usage of credit cards. When it comes to flipping or rehabbing a house, there are two types of investors: those who already have the money and those who need it.

You may get significant returns on your real estate investments regardless of whatever group you fall into when it comes to how you approach utilizing credit cards. To help you figure out which money movements are ideal for you, let’s take a look at these two groupings.

Even if Funds or Funding are Already Available to You

No matter how you acquired the money — from a hard lender, a refinanced other property, a short-term loan or other short-term financing, or a secured home equity line of credit (HELOC) from a mortgage lender or other financial institution — a credit card is a critical instrument for maximizing your real estate investment profits. You may also rest certain that the process is as simple as possible.

Instead of cash, use a credit card to pay for all of your remodeling or flip costs, and cease using your debit card as well. You may earn anywhere from 1 to 20% back on your purchases when you use a rewards credit card (depending on your strategy). Regardless of how you pay, you’ll already be spending, so earning incentives is a cinch. After that, all you have to do is pay off your credit card amount in full each month using the money or financing you’ve previously acquired.

This technique relies only on the fact that you always pay the debt in full. If you don’t, the interest you pay on your credit card debt will eat away at any savings you make or incentives you gain. As long as you pay your credit card bill in full, you’ll reap the benefits of the points, miles, and cash-back rewards you’ll accrue.

If You’re Unsure how to Finance Your Flip or Refurbishment

So, you haven’t figured out how you’re going to pay for your real estate venture. It’s fine. You’ll need a credit card with a 0% interest rate on purchases if you want to use it effectively. The 0% interest period, which may last anywhere from 12 to 21 months, might be a terrific method to pay for your project until you can sell it or rent it.

A 0% APR business credit card is critical in this situation. Why? There are a few business credit cards that don’t appear on your personal credit record. If you’re carrying a debt (which you will be if you’re using a 0% APR credit card to finance your flip), this is a major advantage because the heavy usage of credit will not harm your personal credit score.

How to Use a Credit Card for a Down Payment on a Property

As most title companies don’t accept credit cards for a down payment, you will need to get a cash advance from your credit card issuer and use the cash advance to get a certified check at your bank where you hold a bank account. You can then use this certified check to pay your down payment on the personal or commercial real estate property.

Because of this, you will also want to use a credit card that does not charge a cash advance fee, in order to save money. In fact, there are a number of different factors that you should look at when deciding which credit card to use when financing real estate investments, which we will cover in the next section, as real estate investing can quickly rack up costs when you use a credit card.

How to Find the Best Credit Card for a Real Estate Investor

Using a credit card to get a rental property or investment property ready to start making you money, such as paying for renovation costs or the closing costs, can help you save money after paying for all your expenses if you find the perfect credit card with appealing credit card rewards for your specific needs.

There are a number of factors that you should look at when determining which one of your credit cards to use, or which credit card to apply for. These factors include:

  • The credit card’s interest rates (APR).
  • The credit card balance.
  • If the credit card has a high credit limit or not.
  • If there is any fees associated with the credit card, such as an annual fee, foreign transaction fees, a fee for balance transfers, or any late fees.
  • If the credit card lets you earn rewards, and if there is anything you can do to earn extra points for even more benefits from your rewards credit card. Taking advantage of a rewards program and credit card points can really help you to earn extra cash.

In order to find the best credit card, you should always shop around to find the best offers from the top credit card companies. Shopping around is one of the best financial decisions you can make when it comes to financing real estate investments with a credit card.

Shopping around for both good investment properties and credit cards are an essential tool that all real estate investors should know how to do in order to enjoy significant savings, even as you spend money on things such as renovation expenses or closing costs. Using search engines, such as Google, to be able to easily compare different credit cards and credit card rewards against each other, even from the same credit card issuer, is highly recommended.

If you are trying to get a good APR on your credit card, remember that The Federal Reserve releases the average interest rate for all personal credit cards once a quarter at no cost to you.

Remember, the credit card company will look at a number of things when making a decision as to whether or not to extend you a line of credit, such as your credit history (Good credit or Excellent credit scores are usually needed), and your income. Your personal credit history can cause your interest rates to be significantly higher or lower.

If you want to learn more about great credit cards, we suggest that you read our previous articles, such as Chase Freedom Unlimited or Capital One Quicksilver, among others.

Bottom line

Investing in real estate with the use of a credit card might provide enormous profits. Paying off your credit card amount in full each month is essential, as is strategic credit card use. For several months, you may avoid paying interest on your purchases by using a credit card with a zero percent APR offer. In combination with sign-up incentives, this chance provides a wealth of advantages that may be turned into cash.

Despite the fact that you hope this never happens, it is possible to lose money on real estate investments. Making use of credit card offers that might net you hundreds or thousands of dollars could be the difference between making money and losing money on your property.

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