Technique No. 26 Credit Cards

In the past little while we have learned of two cases involving small properties (in this case mobile homes) where the buyers contributed the down payments by using credit cards. In one case an investor raised $500 for the down payment on a 12’ X 60’ Flamingo which then rented out for a $137/mo. positive cash flow. In another case a fortunate buyer in Phoenix picked up a spotless two bedroom Schultz mobile home by putting down $1,700 borrowed on a revolving charge account.

Except in unusual cases where the investor has acquired dozens of credit cards and uses them in strategic and coordinated way, the amounts of cash generated by this technique are not generally large. However, where the buyer comes up with a few hundred (or even a few thousand) dollars short, credit cards can make the difference.

Technique No. 27 Home Improvement Loans

Often hard-money funds borrowed to complete improvements to a property can relieve the pressures on cash-poor buyer and rejuvenate accounts set aside for down payments and fix-up. Allocation of home improvement funds has to comply with the lender’s policy, of course. For example, in a recent Kansas City, Missouri, transaction we heard of a $6,000 long-term Title 1 Home Improvement loan was an important ingredient in the over-all acquisitions process of a single-family house.

Technique No. 28 Home Equity Loans

Even in tight-money times, there are mortgage finance companies willing to make second-mortgage loans secured by the equity in a buyer’s home. Often the beginning investor will get his or her start in this way. We know of a couple in Arizona who used a $20,000 home equity loan to acquire two single family rental homes and get their investment ball rolling. They even came out with a modest positive cash flow.

Technique No. 29 Refinance Boat, Car, Stereo, or Other Personal Property

Hard-money lenders are often willing to loan money secured against valuable personal property. In a counseling session recently, a client was asking how to come up with the last $2,000 needed to