If you’ve found a company like Seed Capital, then you’ve learned about how credit cards can be leveraged to buy real estate. You might have been wondering how to flip a house with no money down, until you found this method for flipping houses. Our strong opinion of Seed capital is that it’s mostly a scam and we do not encourage anyone to do business with them.
This is how to buy a house with no money down. You can do what seed capital does on your own and save ~$6500. The concept is to acquire multiple credit cards all at once, and to use the Balance Transfer feature of the cards to get actual cash in your bank account. Most cards charge a 3% fee to do the transfer, but will have a promotion period of no interest for 12 – 18 months. You can use the cash to buy and fix a property then sell, or buy a property and re-finance later.
It should be stated that using credit cards is particularly risky because of the extremely high interest rate once the promotion period ends. If your project goes at all off course (and it will if you haven’t done a few yet), you run the risk of losing money or worse. The debt can get out of control leaving you with few options to bail yourself out. However, all risk can be mitigated with proper due diligence, so plan accordingly. You won’t be able to avoid a 30 – 40 point drop on your credit score, but as long as you don’t ever make late payments, your score will bounce back much higher later. Can you buy a house with a credit card? Yes, and we’ll show you how. You certainly won’t build wealth without taking action of some kind!
It’s a work in progress, but here is an unofficial summary of how to do this for yourself.
- Research and gather a database of credit cards to apply for. Make sure they are able to do balance transfers (most can).
- In a span of a few business days, apply for all of them using an arbitrarily high income number. They don’t verify your income, so shoot for $150 – 250k/yr.
- As credit cards arrive in the mail, keep careful records of their promo period dates, fees, credit limit, etc. Save the the checks they send you, and call and ask for more if they haven’t sent any.
- When you have a deal, write yourself a check from each card but not more than 90% of the credit max on that card. Some cards will require that you make the check out to somebody besides yourself, so talk to a spouse, trusted friend, or set up a DBA at your bank. Make sure you are aware of the fine print.
*Note, you can borrow extra to cover the 3% fee they charge. - Close on the house and get going on the renovation right away.
- Be sure to keep CAREFUL RECORDS and pay the minimum payment on each card every month. It’s usually about 1% of the total balance. Remember: borrow more from various credit cards to float these monthly payments if you like. More info coming later this year about how to stay current on payments by moving the balance between cards so you never pay any cash out of pocket!!
- Sell the house or re-fi, and pay all the cards off. You did it!