A bunch of problems all at once, boiler died, needed to replace all windows due to lead, rehab units etc.

Short of cash and time so used CCard. I know not the best. I suppose I could get a home equity loan to pay it off and get some tax benefit but I would rather save that for still unforeseen things. but I was also wondering about some of those CC offers about shifting to them for a year or so no interest. Are they EVER any good? Strings that make it a bad deal?

They are a good deal, I used to switch all the time but these days we pay it off monthly so don't need Zero interest. But if we did I would certainly sign up for it.

This doesn't sound like a good scenario at all.

Lack of cash flow and CapEx repair funds shows that investments are not performing well. Using credit cards and/or HELs/HELOCs is doubling down on an investment that is not performing well. Is that wise? At what point does one admit it's time to get out?

This is how people go broke in real estate. I'm not saying you will go broke, but this is often how the downward spial begins. Lack of planning/saving leads to use of debt, which can snow ball as more debts pile on, payments can't be made, and collateral assets are at risk.

What will you do if, after using credit to fix stuff, you have something else expensive break? More credit, more HELOC?

That is how I finance my rentals. Keep very close track of low-rate expiration dates, keep utilization of any one card under 29% if possible, or work on getting the higher utilization down. Credit score will take a hit as cards that were sitting idle are now used. Monitor that. (I use Credit Karma.) Set the monthly payment such that it will be paid off within the low -interest time.

Balance transfer do also get the zero interest rates. It'll all be spelled out in the offer letter. You can usually do balance transfers online, as well.

I'm with Sid. I counsel too many LLs who kid themselves with these games. A profitable business should be able to handle expenses. I realize these are large one time expenses but something is missing. What happened to all that good cash flow?

I like Homer's phrase - Dancing with the Devil. The devil KNOWS he'll eventually get what he wants. This is a HUGE money maker for credit card companies. They don't give this stuff away for free. They KNOW many will wind up paying unholy interest so it's worth their trouble.

Sure a few people made it work a time or two but the ones who wound up paying 29% interest don't speak up out of embarrassment or they lost all their props and disappeared.

I'm in the for FREEDOM!!! and juggling money is added stress.

BRAD

Anne,

I'd rather see you calling the contractors and asking to pay over time.

Did some of you miss the part that this property has a very good positive cash flow and under current schedule should be payed off in about a year? Cash was short because of other obligations. I have cash reserves of 33K I rather want to keep that for other unforeseen emergencies. I have a lot of equity in other properties included my payed off house. A bit over 500K on just that alone. I rather not take out equity loans.

I consider it a tool,..a quick way to get it done. BTW most of the contractors around here need 1/3 to start a job, another 1/3 mid way,..

Good cash flow mostly purchased another property this Spring, leaving a small 10% mortgage,then good cash flow after accelerated pay off of that.

WMH,,, i don't know about cash advances... I only use the credit card checks that come with the zero percent offers, usually there is a 3% or 5% fee and usually 12 months sometimes 18 months!!

I can write the checks to the plumber or roofer, etc. If written on the right day, it can take 45 days to post instead of 30... that more free time! If i write a CC check to plumber from Discover card, he cashes it, it shows up on my Discover CC, which has 30 days no interest, then I use a CC check from Chase Master card to pay Discover. So another free 30 days,,, now I'm six days into my project house. Next month it's rented,,, so I now have collected from tenant monies to pay back the amount divided by the time.

Yes, you have to be disciplined and willing to play the game, but it's soooo convenient and easy. Careful to may sure you can committee the money to paying it back. Or yes, it's bad if you let it run over the time period, or write to many, you must keep on top of it.

THE reason I reduce the payback by one month is to make sure it get's paid back one month early,, cause if you miss it by one day they will add in all the interest from the beginning and that could be a pretty penny!

I put the card in a folder, write on the front - $2000 + Fee = equals, total amount due in 11 months (if that term is for 12 months) And then each month when that bills comes I write out a check the very day it arrives, and send it out the next day, and I write on my envelope the check number and date and the next amount due, it will reduce each month and in 11 month's be back to zero balance.

Rinse and repeat.

here is an example from ROOFS for two mobile homes

Here is no changes on the card, zero balance due. I only use this card for CC checks.

Wrote CC check to contractor for $3000 in Jan 2017

Terms: 3% fee for 15 months.

$3000 + $90 = $3090

(take off one month, so figure on 14 months)

2017

Due $3090

(1)Feb $221 Due next billing cycle $2869

(2)Mar $221 Due $3648

(3)April $221 Due $2427

(4)May $221 Due $2206

(5)June $221 Due $1085

(6)July $221 Due $1764

(7)Aug $221 Due $1543

(8)Sept $221 Die $1322

(9)Oct $221 Due $1101

(10)Nov $221 Due $880

(11)Dec $221 Due $659

2018

(12)Jan $221 Due $438

(13)Feb $221 Due $217

(14)March $221 -/+ PAID OFF

(15) actual offer was for 15 months., but for 'insurance' i allow my self time to make sure there are no errors!

NOTE: this is not the monthly payment on the statement this is ME and MY discipline and working the offer to my advantage. The actual statement may say NO PAYMENT is due... don't buy into that, they will beat you up and send you into a frenzy if you let them lead you. The caution is they will charge you interest on the $3090 if you don't pay it off before the offer expires. AND NOTE< i do not use the card while it is "out" on an offer. I keep the records very carefully to avoid the pitfalls.

Any borrowing of money can be harmful, try and not pay the banker, mortgage or hard money lender, this to be is a the least of the evil lenders.

I use CC offers. Just be careful to read the details of the offer.

There are 0% if paid in X months offers. These are usually from a store card, and don't have an upfront fee. Lowe's and Home Depot have these offers regularly. Lowe's doesn't give the 5% discount if you use this offer, so that is in effect a 5% fee upfront. But, Home Depot doesn't offer a discount, so no fee. The danger on these is the deffered interest. They will calculate the interest on your purchase at a high (28%?) rate, but not charge it. If, at the end of the offer period, any of the balance is not paid, they charge the full interest. So, you have to make sure you pay this before the offer period is up.

There are 0% on purchases for X months offers. These don't have upfront fees and are less risky because they don't add in deferred interest throughout the offer period. So, if you don't pay if off by the end of the period, there isn't a huge interest charge right away. I still think it makes the most sense to pay them off before they start charging regular CC interest rates, but if you miss it by a few days, you don't get a $3,000.00+ charge like you could with a deffered interest offer. This kind of offer is available when you open most major credit cards. Some cards, Citi and Chase for sure, also offer this at various times after opening the card.

Cash advance, balance transfer, and purchase checks come in a few varieties. Capital One used to have them with no fee and they were subject to the usual grace period rules for the credit card purchases. Those are a good deal because you can time it right to borrow money for a couple months at 0%. When they used to send these to me, I would write them for my full credit limit and put them in my high interest checking account until the payment was due back.

Some cards give checks that are subject to the cash advance rate, don't use those. They are a high rate with no grace period. They would only make sense to use if you needed a very short term loan and had no lower interest options available. If you are in that kind of bind, you may have some big financial problems.

And, many cards have special offer balance transfer checks. These can be a good deal. They usually charge an upfront fee, but then offer low or no interest for several months. The one I got in the mail today is from Chase for 0% interest through 11/2018 with a 3% fee. I use these to pay down my LOC. If the LOC has a 5% rate, that would save about $15/$1000 borrowed.

If you have regular expenses you put on credit cards, you are probably best off opening a card with 0% on purchases for 12-18 months. That way, you don't have any upfront fees.

Regarding the question of cash advances- they also are often included in zero/low interest offers. I bought two houses using no interest, no fee cash advances. Course that was couple years ago, when banks couldn't hardly give money away.

Plenty, your system is very close to mine. I too make sure it's all paid one month prior. Missed that on one once and paid about $24 interest.

For some people this would be stressful, I thoroughly enjoy it as part of my process. Anne, I have a schedule of when I will transfer some balances to other cards, paying some fees. No, there are not any offers coming my way anymore with zero fees and zero interest, like there were in 2011-2013, but 2-3% fees, zero interest come my way. For me, that still makes sense, as few banks offer mortgages on a 40k home. My spouse doesn't want any joint property placed under mortgage for my rental business. This works for me.

I bought an entire house on a 2.99% Life of the Loan deal. Wish those were still around.

The most expensive shack I bought on credit cards was 85,000. Worked out very well.

I bought another shack at 10% over five years. Paid that off and blew what I though was ten grand in interest over the coarse of time. Fast forward my 15 year loans are still not done and they are paying far more than 10,000 grand. That shack has been paid off for years now and taxes are reasonable so it is a cash cow.

Sometimes a card will ask you to combine two different cards which ended up with the same company. Do not do this. This will give you one big card whereas if you have two cards you can zero one out and begin to have good offers arriving.

Did you know this? You can also manipulate the credit limits. If you have two cards with one company....each having a ten grand limit....you can call in and have one card reduced to 5 grand and the other raised up to 15 grand. In this way you can transfer more on a deal.

It is a lot of fun.

These days you have offers which must be paid off in the term or the interest gets counted back to day one.

The home equity loan interest suspension applies to primary residences.

I wish you the best of luck Anne.

If you say all is well, then I have to believe all is well. There is a huge difference between paying down debt and paying off a house.

Cash flow is the number one reason why businesses fail in the US according to the SBA. Maybe that is your issue or maybe it is the selection of words used. Maintenance is an on going expense. It should take about 8-12% of your gross rent in every year. Replacing these systems should not be a surprise. If a hot water tank for example is 22 years old but runs fine, it probably isn't going to be that way much more than 2 more years. I would suggest that you might consider googling the expected life cycles of all the major systems that you have in your rentals.

I love the Home Depot and Lowes 18 month interest free offers. Whenever I do a large project I typically buy all of the appliances from Home Depot and do the 18 month thing.

Busy-

Menards has no interest if paid in full for 6 months and 4% interest for 4 years. Minimum of $300 for the 6 month offer and its 26% interest if not paid in full. Minimum of $1,500 purchase for the 4 years at 4% and they require even payments for the term, so it is paid off at the end. Both offers make the purchase ineligible for the 2% rebate.

Home Depot has 6-24 month no interest if paid in full offers depending on the amount of the purchase. And they have a project loan offer for 8% for 7 years. That one has a 6 month buying window to load up all your project purchases on one financing plan.

You are correct Kyle. I wasn't recalling correctly. I have about $1100 on the Menards card due in 2021 at 4%.

Both of the big box stores will extend 0% if asked on large purchases.