Join Ken and Danille as they discuss the Fed’s move this week on interest rates. They will also be talking about credit card debt and ways to reduce it. Come join the discussion live at 11AM Arizona Time!
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#kenmcelroy #recession #realestate
When you buy a new development units when you close the deal with buyers get. How fast you recovery your invest?
The moment you pay JUST the MINIMUM DUE you have LOST.
Barrett isn’t a winners game.
A whole like of people are going to default on their credit card debt. Also look at car lending. People are going to start getting repo'd on their 84 month car loans.
If you have the cash to make the down payment sure put it on the CC that lets you punt the debt for a year but that can be a rodeo with a bull they gets away from you fast. Then you are on the ground scrambling to get out from underneath it.
Also if you are using a CC for DP then most lenders are not going to give you a mortgage because they will source the cash and when they see it was a CC debt they will walk away.
Hahaha, lets change the hypothetical to be right. 🤷♂️
Ken is speaking from real experience and not hypotheticals, so I'm on Ken's team. 🤣
damn I needed that real estate agent advice at the end 🥲
I have 2 zero percent cards funding my rehab. It scares me to death, but it makes sense. It dropped my credit score!!! 800 down to 705. Biden’s inflation is killing us small folks. I was fine till inflation/gas/ food went thru the roof. Thanks Joe! Your half million dollar privacy fence looks great!
Inflation is good for real estate IF your tenants can afford it. Changing how you measure CPI to make things look better doesn’t solve the wage issue. All of which happening after shutting down the global economy for 2 years and pricing people out of home loans. That means the amount of rentals decrease, so there is pressure to build more RE. Except that it cost so much to do it, that you have to increase rental price just to break even on construction…except, again, wages are not going up. Add in all the increases in utility costs. This is way more complicated than that.
I trust him over her. His age and experience plus HE has a proven track-record. I actually used my Chase freedom card to put $11,000 down on my brand new house, in 2010. The house is a rental now and this is Sacramento California. I believe you, Ken!
Right in time for the 2024 election
You can only use a credit card for a down payment if you do a balance transfer to a checking account. You can't "pay" a down payment with a credit card.
Some cards have a function to transfer to checking, but for some you have to just put a debit card number in and hope it works (usually does).
But for down payments, the funds (from checking) need to be VERIFIED and have been in your account for some months! Now if you've done this, it will be impacting your DTI. Danille's argument was that you better hope you can get a loan in the future but that is N/A because you've already got your 30yr fixed if you're able to make it that far.
Overall, if you can do this, it's a great idea but don't forget about what else Danille said which is the 3-5% bal transfer fee (negligible).
90% of people cannot handle a credit card- if you can pay off the debt, sure, use the card and get the points. But if not, why would you want to put yourself in such a bad position; the credit card rate is going to skyrocket after 12 months!
I use 2 american express cards: 1 for business and 1 for 3% personal cash back. good thing about AMEX is it's a charge card and i have to pay off in full. the points are good too. pays for free ski trips and cruises. I charge hundreds of thousands a year to AMEX. great company but you DO NOT want to carry a balance ever!
Thanks for your efforts . Hope you get better.
What about business credit cards with 0% interest for 12 months? Should they be used?
Wondering how people get comfortable with the huge difference in commercial debt vs residential. Shorter amortization and balloons seem like too much uncertainty
“It’s trust but verify “ wasn’t Ken ! (Although Ken is AMAZING)! It was the great Ronald Reagan !
You can absolutely use a credit card to invest in real estate. Let's say your rent is 550 a month and you need 2000 down to buy a property that will cost 212 a month on the loan of 10,000. You save 300 a month off the rent and pay off the 2000. The 10,000 loan gets paid off and it rolls over as you save more money to make another investment. You rent the property for 575. Your next property is 230 a month. Credit cards can be used to make good investments!!!
Wow, She is way cuter with wet hair.
Im serious.
Makes me want to be back in high school for swim day.
Totally agree with Ken. Zero interest for year to 18 months is a win long as you have cash flow to pay back
Your volume is always low.
Good Stuff‼️
Thank you Mr. Ken and Mrs. Danille for the valuable information. Mrs. Danille feel better soon.
Credit cards are tricky. Most people do not pay off credit cards and end up having to pay interest on their credit cards.
On using bridge, short term debt, or a value add deal I've learned you would have that period of time to assure cash flow. I've used Amex debt to cover business deals and it was the best decision I've ever made. That said, it was guaranteed payment when the job was done so near zero risk. If there is any indication that things don't pan out, if the speculative words are used, or the process can't be completed, I wouldn't do it.
If you don’t put the monthly credit card payment in your budget, right away, by diving the total loaned into x amount of months and commit to it, then just don’t borrow from credit cards