Building our house on credit cards?

[old medic]

I guess its OK to ask on this forum... Its financial, our retirement home... and doubt I'll retire till its done...LOL

Back story...
We stumbled onto the opportunity to sell our home 3 years ago... We managed buy the old house we rented for almost 8 years,and my brother has been renting since we moved back in 1995...shack of a house on 3 acres....She made us a great deal but the brother stays... We bought a used 5th wheel and a couple sheds... and made it our home, was thinking about making a small campground out of it... a place to park in our travels.

Next door is an abandoned home, Original built in 1972 by the brother on the families original 4 acres. Old family friends, kinda like adopted grandparents, had bought it back in the early 80s. They have since past away, and the place had been repossessed by the bank and sitting vacant about 8 years. Crackheads had basically stripped it out, pulled most of the wiring, plumbing anything of value... and trashed the rest....

We managed to buy it at auction for $6500 2 years ago. pics in the file.. 960 SGFT, and an unfinished 2 car garage. Almost put a match to it... but hated to lose the fireplace. Besides, I actually help build the garage back in 1988.

So we now own both places mortgage free, and 30K in cash on hand. We have totally gutted the house, Got the garage floor poured and the doors installed for secure storage Got a building permit, temporary power pole and well up and running... Back story complete....

We have several store credit cards that we have used so far buying supply's. Everything at 0% interest till paid off.. and total debt balance is currently $150 to be paid next week. We are about to drop $2-$3K for windows and exterior doors and some framing and electric supplies, 0% for 2 years.
Following the electric and framing inspection, its Insulation, sheet rock, bath and kitchen, appliances, deck Materials, Siding and so on...... all within the next year...
Im figuring on about $30K total spread out over these accounts, or $1250 a month to have it paid off before interest starts...And the store card interest is OUTRAGEOUS.....

Anyone thing we crazy?

 

[old medic]

Lost the fireplace pic....
and current condition

 

[sengsational]

I was going to say, based on "Building our house on credit cards", that doesn't seem like a stable foundation


But seriously, if you can manage to pay off the cards without making any interest payments, why not? Do you have savings you can tap to pay, even if it goes over budget?


It looks like a fun project.

 

[Rex]

Not crazy, smart. Always better to use "other people's money".....Zero percent interest is always good...just make sure you follow the rules for when the zero percent goes away. You don't want to be caught a day late on that or you quickly go from "other peoples money" to "paying out the wazoo"

Good luck on the project......

 

[sengsational]

I've never had a 0% balance on a card, until now. So I don't know if they have any tricks up their sleeve in the payoff process.

The statement says "Introductory balance transfer, rate expires 10/18/2020". Payment is due on the 12th of the month.

I was going to pay in full on 9/12, just to be safe. But unless I'm missing something, 10/12 would be fine, as long as I'm double sure it goes out on time. And I'm paying the minimum every month out of my banks bill pay system, and that's worked perfectly so far.

Just don't want to be one day late and get clobbered.

 

[old medic]

"Building our house on credit cards", that doesn't seem like a stable foundation
sengsational... LMAO.... thats a good one...
Yes on the savings... but rather keep it as a rainy day fund...
and theres 2 different 0% offers... we have bounced debt between a few major cards... 0% till this date then interest restarts....
On the store cards its mostly deferred interest... and that will eat you up
using our window purchase of $3000
Your monthly payment to pay it off in time is is Y... say $125
They figure your deferred interest would be X if regular interest payments made... say $550 over the 2 years...
If you paid $499 a month and miss the final $6 payment on month 7.... BOOM... they add the $550 interest to your balance.
Saved over $450 in interest last year buying a tiller though AMAZON....

 

[MrsHaloFIRE]

I've never had a 0% balance on a card, until now. So I don't know if they have any tricks up their sleeve in the payoff process.

The statement says "Introductory balance transfer, rate expires 10/18/2020". Payment is due on the 12th of the month.

I was going to pay in full on 9/12, just to be safe. But unless I'm missing something, 10/12 would be fine, as long as I'm double sure it goes out on time. And I'm paying the minimum every month out of my banks bill pay system, and that's worked perfectly so far.

Just don't want to be one day late and get clobbered.

Post the whole offer. 0 pct balance transfer is diff than 0 pct interest on purchases. Also, in the last few years I have not seen a 0 pct transfer come without a flat percentage fee. Back in the good old days, they capped the fee at $95

 

[Bamaman]

Often, you can take an option of a 5% discount or use the 0% for 1 or 2 years.

I prefer to use another credit card with a large limit that pays back 2% charges used for travel. Because after tackling this project, you for sure are going to need a vacation.

 

[calmloki]

We have lumpy expenses and I like to use them to qualify for card bonus amounts. $4000 insurance bill? apply for a new card that offers $500 bonus ( I used BBVA most recently, which required a $4500 spend. Spent $4528 and got $545.28 bonus credit.) Result was a neat 12% discount on my spending. I'll take a discount over a bill payment deferment any time.

Or like Bamaman, use something like the Fidelity card and take a 2% cashback with no need to go through a bunch of gyrations every $3-5000 spend.

Good on you stripping that place out and bringing it back - very satisfying.

 

[davebarnes]

Anyone thing we crazy?

Only for living in western North Carolina.
I am a city boy.

 

[sengsational]

Post the whole offer. 0 pct balance transfer is diff than 0 pct interest on purchases. Also, in the last few years I have not seen a 0 pct transfer come without a flat percentage fee. Back in the good old days, they capped the fee at $95

I signed up for this a while back and transferred balances from 2 other cards to the tune of about 7 grand. So far, everything worked (no interest, no fees)


https://www.doctorofcredit.com/amex...-offer-10000-points-0-apy-15-months-0-bt-fee/

 

[old medic]

Only for living in western North Carolina.
I am a city boy.

Im sorry for ya...

 

[old medic]

Often, you can take an option of a 5% discount or use the 0% for 1 or 2 years.

I prefer to use another credit card with a large limit that pays back 2% charges used for travel. Because after tackling this project, you for sure are going to need a vacation.

True... and considered taking the 5% off.. but saves only around $150 vs saving over $500 in interest... We have on other stuff that we paid off right away...
The 2% cash back also needs to be paid off or the interest negates any savings.
We take plenty of vacations.. anything from jumping on the bike for a good days riding, to long weekend of camping...

 

[The Cosmic Avenger]

I've taken out 0% loans, always paid them off on time, usually because I already was planning on paying cash, and interest rates were decent. Right now, though, if I were you I'd put the $30K on a 2% credit card and then pay it off right away with the cash; that's $600 cash back for sure, and in today's market it's more than you'd make in interest on that $30K, unless you're willing to risk the principal. (Not recommended for money already spent.)

 

[pb4uski]

I see nothing wrong with taking advantage of their largesse to spread the cash flow out some.... but depending on what you're earning on the $30k in savings it might not be accomplishing much... even at 1% it's only $300 if you put the whole shooting match on credit cards at 0% for 12 months.

We had a 1960s era "camp" that we were going to totally gut down to the studs and renovate... new roof, new windows and doors, new siding, spray-foam insulation and totally redo inside. My high school friend who was our builder convinced me that it was better to just demolish and build new on the existing foundation. Worked well for us.

Might have gone the manufactured home route if we had had better/easier access to the site... you can bring them in almost any set of plans and they can build modules to fit. We have two manufactured homes here on the lake that are very nice.

 

[old medic]

we were going to totally gut down to the studs and renovate... new roof, new windows and doors, new siding, spray-foam insulation and totally redo inside. My high school friend who was our builder convinced me that it was better to just demolish and build new on the existing foundation.

Like I said... Almost put a match to it... and at times still do... LOL..
If we were paying someone to do the work it would be cheaper to build new or go the modular route, but the sweat equity will be there in the future.

 

[old medic]

Well its been a while since Ive updated our story... COVID issues with supplies, costs and the extra work load before retiring really but the brakes on progress. We have gathered and paid for a bunch of supplies, and now got some time and got busy again.
We have the metal roofing, plywood for repairing a few sections, and replacing the siding, Windows and doors, all the kitchen cabinetry, New fridge, cooktop, sink. Most the plumbing and electric. Have hopes to get it done and moved in by the end of the year.

 

[old medic]

 

[Bamaman]

Often, you can take an option of a 5% discount or use the 0% for 1 or 2 years.

I prefer to use another credit card with a large limit that pays back 2% charges used for travel. Because after tackling this project, you for sure are going to need a vacation.

You can take the 5% discount on the price of supplies and it converts to just over 10% APR on the balance. If you can get a construction loan to pay off the card for under 10% APR, you're coming out ahead. Or if you're paying cash, it's like getting 10% on your money vs. having it sit in a bank drawing .3%. And you can also float on the credit card charge up to a month before it's got to be paid--after buying.

You don't want to spend 18% APR on the store's credit card.

 

[old medic]

. If you can get a construction loan to pay off the card for under 10% APR, you're coming out ahead.

A very sore point with us..... We own both places free and clear, combined tax value in current conditions is well over $100K. We have tried several banks and options trying to find a loan, Construction, Home equity line and all for naught. Even looked at a Lowes project loan at 8.9%. We can get a personal loan for as much as we want, higher interest, but the house wont count towards equity till its done. Construction loan requires a licensed builder and Architectual plans. We easily manage paying $1000 a month toward the balances and still putting up more savings. We still have a few big purchases left, but hopefully can manage to get them at 0% too... Time will tell but we have enough cash on hand to finish it.

 

[skyking1]

thank you for the update medic.