We’ve all seen the house flipping programs on TV where friends, couples, and seasoned pros flip houses for ridiculous profits. According to ATTOM Data Solutions, the average gross profit on a house flip during the third quarter of 2017 was $66,448.
What the programs don’t show you is where the flippers get their money. After all, who has $300,000 or $400,000 lying around to buy a fixer-upper? It’s not like any of these homes could qualify for conventional financing from a bank. Most house flippers use hard money or private money. The concept is the same. They borrow at high-interest rates over a short period of time to fund their construction.
It comes with risk as the TV shows often portray. What the shows also don’t show is that many flippers use credit cards to buy appliances. Why, you may wonder, don’t they use their hard money loans for appliances? John Anthony, of Turnkey Investment Properties LLC in Pittsburgh, PA flips around 15-20 houses a year. He explains the rationale of using a credit card for appliances.
“If you are buying appliances it means the flip is almost completed,” Mr. Anthony says. “Therefore, a credit card is the smart way to go. You make a minimum payment for a short period of time before you sell. It also means you can maximize your private or hard money on the actual flip which is the hardest part and where you should be spending money.”
Anthony has a tried and tested strategy for which type of credit card he uses for his appliances. “It normally makes sense to use a card connected with the place you’re buying the appliances,” he says. “They often have incentives which other cards don’t.”
With that in mind, Appliances Connection has just launched their own credit card through Comenity Capital Bank, (other notable companies that have a credit card service through Comenity include Abercrombie and Fitch and Barney’s New York). It comes with a suite of benefits for users including free in-home delivery1, special financing2, and exclusive deals on Appliances Connection’s top brands for cardholders.
“The customer experience is at the core of everything we do at Appliances Connection. Our search for a credit card partner that understands and can help deliver the unmatched experience we’ve created led us to Comenity Bank,” says Albert Fouerti, founder and chief exec at Appliances Connection. “With Comenity’s innovative, marketing-leading capabilities, the card program will offer a level of convenience and flexibility that will make our quality merchandise accessible to even more loyal shoppers.”