Maximizing Business Credit Cards for Section 8 Real Estate Investment

In this blog post, we’ll discuss a strategy for using business credit cards to purchase Section 8 rental properties, especially if you’re facing challenges with down payments or capital for real estate investment. Stay tuned for insights and credit card recommendations to support this approach.
1. The Importance of Capital in Section 8 Real Estate:
In real estate investment, having sufficient capital is crucial for property acquisitions, renovations, repairs, and emergencies. However, many potential investors face challenges due to a lack of funds. Saving up for a substantial down payment or covering closing costs can be a time-consuming barrier to entering the Section 8 investment market.

2. Overcoming Capital Shortages with Business Credit Cards:
But what if I told you there’s a strategy that can help you secure the funds needed to purchase a Section 8 investment property, even if you lack substantial capital? The answer lies in business credit cards. Let’s break it down step by step, with a focus on Section 8 real estate:

2.1. Create a Business Entity:
– The first step is to establish a business entity, often an LLC, tailored for Section 8 real estate investment.
– Acquire an Employer Identification Number (EIN) for your Section 8 real estate business.
– Setting up a business bank account can also be beneficial at this stage.

2.2. Improve Your Personal Credit for Section 8 Success:
– Ensure your personal credit score is at least 700 or higher—a crucial factor for successful Section 8 real estate investment.
– Always pay your bills on time, maintain low credit card utilization (below 30%), and avoid late payments.
– Seek to acquire more personal credit cards to increase available credit, thus reducing utilization.
– Focus on growing your credit accounts and maintaining a healthy credit mix (credit cards, mortgage, car loan, etc.), essential for Section 8 success.
– Don’t worry too much about hard inquiries, as they have minimal impact on your credit score.

2.3. Apply for Business Credit Cards for Section 8 Investment:
– Once your business entity is in place and your personal credit score is strong, you can start applying for business credit cards, customized for Section 8 real estate investment.
– Many business credit cards require a personal guarantee, meaning they’ll consider your personal credit score during the application process.
– While you need to be honest about your business’s income, most banks don’t scrutinize it as closely as they do your personal credit.

3. Leveraging Business Credit Cards for Section 8 Success:
Here’s where the magic happens. After receiving your business credit card, you’ll have a credit limit. For instance, let’s say it’s $15,000, and a portion of this limit can be withdrawn as a cash advance. So, you might have access to around $5,000 in cash. If you have multiple business credit cards, you could accumulate over $20,000 in available cash advances. These funds can be used to cover down payments, closing costs, and reserves, all critical aspects of Section 8 real estate investment.

4. Key Points to Consider for Section 8 Real Estate Investment:
– Keep in mind that you’ll need to repay the cash advances, as they are not free money, vital for a successful Section 8 investment.
– Expect cash advance fees, which are typically charged upfront, but they are manageable for Section 8 investors.
– Be aware that the interest rates on cash advances are higher than standard credit card rates, a factor to consider for Section 8 investment.
– Lenders usually review your bank statements for the past few months when applying for a Section 8 real estate investment mortgage. Make sure to deposit the cash advance money and leave it untouched for a while to avoid questions about sudden deposits.

5. My Personal Business Credit Cards for Section 8 Success:
– I personally use 11 credit cards, including seven personal credit cards and four business credit cards, tailored for Section 8 real estate investment.
– My business credit cards are divided between two providers: Chase and American Express, offering versatile benefits for Section 8 success.
– My Chase business credit cards include the Ink Business Unlimited and the Ink Business Cash, both featuring appealing sign-up bonuses for Section 8 investors.
– American Express provides me with the Blue Business Plus and the Blue Business Cash cards, known for their great benefits and compatibility with Section 8 real estate investment.

6. Conclusion: Unlocking Section 8 Real Estate Investment Opportunities
Leveraging business credit cards to obtain cash advances is a clever method for overcoming capital constraints and entering the Section 8 real estate investment market. This approach has the advantage of not substantially impacting your personal credit score, making it a valuable tool for Section 8 success.

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