Home Buying in Detroit>Question Details

Chris, Home Buyer in Royal Oak, MI

Would buying a house with a credit card be a good idea? Return on investment is > 100K

Asked by Chris, Royal Oak, MI Sat Apr 12, 2008

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I would suggest talking to your Accountant, Financial Advisor, or Tax Attorney before ever using a charge card to purchase real estate, unless you can pay it off prior interest being applied.
0 votes Thank Flag Link Tue Apr 22, 2008
My biggest question in this is how are you coming up with that $100k figure? Just because an agent thinks they can sell a home for $xxxx doesn't mean it's a sure thing. Buyer's in today's market are not just looking for deals, they're looking for steals, and an article in the newspaper yesterday said there is a 19 month supply of homes on the market in the Metro area. I'm not saying it's not a good idea to charge it, just do your due diligence in terms of researching the sold homes in the area, time it's taking to sell them, and what the competition is in terms of other similar homes for sale.
0 votes Thank Flag Link Mon Apr 14, 2008
I don't have an answer for you Chris... but I do have a few questions.

Do you have an end buyer in place to purchase this property from you? (Lenders now have stricter lending requirements in Michigan.) Did you hire your own appraiser for this value? How experienced are you at real estate investing?

John Lopez
0 votes Thank Flag Link Sun Apr 13, 2008
I have personally had people take advances on credit cards to purchase a house. Their thinking was that they are buying something of value with an unsecured loan. They can either flip the house... not that easy in this market so I question the 100K... or they can fix it, mortgage it to pay off the cards and keep it as a long term investment. You might want investigate the ROI a little further, I've never seen a seller thats willing to walk away with 100K less than the house is worth...
0 votes Thank Flag Link Sat Apr 12, 2008
The question is how fast do you plan to sell? And are you sure you can get the return that you expect? If you set up the sell prior to purchasing the property then paying with a credit card may be a great idea. Just my take on it....

Khazeem Asadullah
0 votes Thank Flag Link Sat Apr 12, 2008
Web Reference: http://www.mi-living.com
0 votes Thank Flag Link Sat Apr 12, 2008
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