Unsecured Credit

I just finished a book called "The No-Nonsense Real Estate Investor's Kit" by Thomas J. Lucier. The book became increasingly more interesting as I neared the end, with part 3, "The Fundamentals of Real Estate Investing" and part 4, "Nine-Step Process for Buying and Selling Real Estate". At the close of part 4, Lucier talked about using low interest credit cards to finance short term real-estate investing. He goes on to say...

In this business, access to readily available sources of cash allows investors to take advantage of opportunities to buy properties at below market prices the moment they are known. I've found that low-interest lines of unsecured credit are the most cost-effective source of short-term financing available today.

In the past I always immediately dismissed and shredded those 0% APR cash advance checks and snarled at the cc companies for their ever creative ways of ensnaring people into cc debt, but after seeing the interest rate charged to me on my Zecco margin account, I would happily take their 0% for a year and earn interest on their money.

But BEWARE. The cc companies still have ways of making their money. They charge fees for cash advances which may out way the benefit of the cash advance. Look for a capped fee of $30-$99, which is a good deal if your withdrawing large amounts. The majority of offers I'm seeing today for 0% cash advances come with a 3% fee, so if you with withdraw $10,000 your already down $300. Look for a capped fee and make sure the interest rate remains 0% after a cash advance is requested.

Taking advantage of your revolving credit and paying on time should increase your "credibility" with your creditors. With time, they will probably increase your limits (which you should request every six months) allowing you to use this new unsecured credit to quickly finance properties with the characteristics of a great investment.

Real Estate Investing

By this time next year, I would like to be the owner of some type of investment property. The two options I'm considering are either a multi-family home where I would live in the basement to maximize rent potential or a handyman special condo I can pick up for cheap, live in, fix up and rent out covering the mortgage and maybe even some passive income. I would tern this into a cycle, beginning a new project only after I have vested 20% of the properties worth and can withdraw those funds, using the house or condo as collateral and buy another investment property.
My plan is to continue with this cycle until rich, all the while shelling money into various other investment vehicles such as the stock market of course.
The key step's in this plan will take place during the next year. I plan to strike at the right moment in order to pick up a depreciated property not only from it's present condition but also taking advantage of the current real estate slump. The other key step is purchasing a mortgage at the perfect time, catching rates at record lows and locking in the rate for 30 years, reaping the benefits of cheap money for a long, long time.
I'm keeping tabs on the mortgage rates almost daily, if rates drop to the point of June 2003 of a national average of 5.21% I may be tempted to lock it in and buy something. I doubt we'll see a situation like the one were in right now (slowing economy, sub-prime crisis, gluten of unsold houses) for a while.