Real estate investing can be immensely profitable. Real estate investors generally find the most success by vigilantly and prudently deciding which investment will generate the greatest return — with the least amount of risk.
It also pays to be a little lucky, but that’s another story.
The luckiest and/or smartest real estate investor is likely to struggle without ready access to cash/capital. This is because some of the most amazing real estate investment opportunities appear with only a limited amount of time to decide if it would be a good fit for your investment style and objectives. These ‘sweetheart deals’ — amazing investment opportunities — are generally completed, lightning fast; where cash is king.
What are Real Estate Investing Business Cards?
Standard credit cards are quite appealing to businesses and consumers because the lines of credit are both convenient and reusable. If a credit card user borrows a portion (or all) of the available credit line, the funds become available again, in increments, as the amount borrowed is repaid.
A real estate investing business card offers similar credit lines, although these credit line limits will typically exceed traditional credit card maximums. Real estate investing business cards work as follows –
- They are unsecured, revolving debt. Use it, repay it, and reuse it.
- When approved, a line of credit is issued with a maximum credit limit. This amount varies from several thousand to several million. The credit limit is contingent upon typical underwriting criteria from the lender of your choice.
- A real estate investing business card can remain open for a few months or a few years; the borrower and the bank have the option of negotiating this credit line feature prior to executing the line of credit’s written agreement.
- Interest rates for real estate investing business cards reflect the risky nature of the unsecured debt.
- It is possible to open more than one real estate investing business card should you need additional financing to meet your objectives. There really is no limit, so to speak, as each lender will make their underwriting decision each time you apply.
Essentially, real estate investing business cards offer real estate investors instant access to cash, which allows them to take advantage of a quick-sale opportunity, i.e., when a seller is pressed for time and willing to make a deal that greatly favors a buyer.
Remember the old financial adage, time equals money.
The Benefits of Real Estate Investing Business Cards
The credit card industry has skyrocketed to a nearly $1 trillion industry since the Diner’s Club credit card was first issued in the 1950s. In fact, most financial pundits agree that about 60% of the United States’ current population has at least one credit card to their name. Credit cards are here to stay and should be used smartly and cleverly for real estate investments that suit your personal strategies and financial objectives.
Unsecured lines of credit essentially perform as real estate investing business cards. With a real estate investing credit card, your payment history is reported on a regular basis to the three primary credit card repositories. As such, an exceptional payment performance over time will bring about the following –
- Access to funds at 0% interest for at anywhere from 30 days to 2 years.
- An opportunity to begin real estate investing without pledging any collateral. This lenient feature of the real estate investing business card is helpful to those investors who do not have any collateral yet, or, to those investors who simply do not want to pledge collateral as a condition of the financing.
- An increase to your credit score, and thus a boost to your creditworthiness rating.
This benefit is quite significant, as it will build a strong credit profile that will allow for larger investments over time. Real estate investors, like most investors, follow a business model where it is understood that larger investments generate the biggest dollar-to-dollar returns.
- Some real estate investing credit cards offer a rewards platform as a part of its financing programs. Borrowers earn perks simply by using the line of credit for their real estate investments.
- Greater limits to your maximum credit limits.
This benefit of real estate investing credit cards is a by-product of the second benefit noted above. An improved credit score and profile, plus a documented history of timely payments will likely open less-costly/larger lines of credit for investing — a surefire way of generating additional profits.
- An overall improvement to your credit profile. This speaks for itself. A strong credit profile is important when leasing a car, and applying for a job, among many other life objectives.
Real Estate Investing Business Cards — Getting Approved
The more innovative lenders first offered the real estate investing business credit card; however, traditional lenders are beginning to recognize this financial product as a viable profit center. In other words, traditional financiers have begun to offer similar unsecured real estate investing financing products.
To qualify for a real estate investing credit card, you must have an established credit history for the past five years. Your credit profile must reveal a 60-month payment history of consistent, on-time payments.
Your credit profile must also contain a minimum of one credit card with a balance that exceeds $5,000. Underwriters will evaluate your credit to determine if you have used your established revolving debt judiciously for at least twelve months.
The Pros & Cons of Using Real Estate Investing Business Cards
Each financing product is created to meet specific financing needs. Because of this objective, most financial products are great options for certain financing scenarios, but ill-suited for other financing situations. Listed below are the Pros and Cons of using a real estate investing business card.
Pros
A real estate investing credit card offers the following benefits –
- Higher credit limits than traditional business credit cards.
- Reusable credit.
- Lenient underwriting guidelines.
- No real estate investing experience required.
- No Collateral required.
- Builds your credit profile & creditworthiness.
- An appropriate emergency reserve source.
Cons
- A real estate investing business card’s interest rates and fees exceed more traditional business products often used for real estate investing.
- The high cost of a real estate investing credit card makes it a poor choice for long term investments.
How Can Real Estate Investing Business Cards Be Used?
Innovative financial products, like a real estate investing business card, generally permits the borrower to determine the way in which they will use the available line of credit. However, you must approach any financial product with due caution.
A path to access cash is most often used for the following real estate investment objectives –
- Paying cash for a purchase from a seller who must sell!
- Being able to grab a sweetheart deal with instantly available financing.
- Paying administrative costs of starting a real estate business.
- Being able to reuse the available credit as it is repaid.
In reality, you can use a real estate investing business card in any way, to meet your investment goals and objectives. The choice is yours.