It takes money to make money, right? Yes and no.
So, I’ve proven that seller financing is out there. You can truly buy a home with no money out of pocket. After that, what do you do about repairs? We are way to new to real estate game for our private lender to trust us with any more than we needed. I’m still baffled that we were able to convince her at all!
So, we had to get creative in financing the rehab. Of course, that includes doing a good bit of work yourself. Elbow grease is hard on your back but easy on your pockets!
The first thing we did was went to Home Depot and applied for a consumer credit card. It was inevitable, right? Home Depot allows you to make interest free purchases for 6 months-24 months, depending on the dollar amount of your purchase. The minimum dollar amount is $299 (pre-tax). We decided to lump our purchases together so that we never fell below $299.
If we really only needed a shower rod to complete a unit, we would couple that with the purchase of a gift card, so that we met the $299 threshold. Couple this with a healthy practice of returning unused items and making sizable monthly payments, and it’s not too bad!
Just make sure that you pay off the balance before your 0% financing term expires. If you fail to do so, Home Depot charges you interest retroactively!!
Home Depot also has a project loan which allows you to finance large renovations with extended low-interest financing. Given our rapid growth though, we did not qualify for any more credit than we were already awarded. Waamp waamp.
I should note that Lowe’s has similar financing options. It just happens that Home Depot is incredibly close and convenient. Both retailers employ local contractors as well. So, if you need to finance a project but can’t do the work yourself, this might be an option. Please consider all of your options though; I’ve heard horror stories.
What are some of the creative ways that you have financed your rehab?
