How I Use Credit Card Rewards for Big Real Estate Investment Returns

Looking for ways to maximize your real estate investments? Here’s what I did and what you can (and should) do too.
Last updated Jun 6, 2021 | By Brandon Neth
How I Use Credit Card Rewards for Big Real Estate Investment Returns

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Aside from points and miles, another hobby that’s been near and dear to my heart for quite some time is real estate investing. Over the years, I’ve done everything from flips and BRRRR properties (buy, rehab, rent, refinance, repeat) to house-hacking, and I own a number of rentals.

Along the way, I’ve added thousands of dollars to my bottom line by strategically using the best credit cards for my expenses. In this article, I’m going to lay out how to invest in real estate by using credit cards to do the same exact thing.

In this article

How credit cards earned me big real estate returns

As a real estate investor, you’re going to spend money. It doesn’t matter if you’re a DIYer or general contractor, there are a number of expenses that come with investing in real estate. And, simply put, if you are not using credit cards for your real estate projects, you are leaving money on the table. As long as you're learning how to invest money, you might as well make the most of it.


Now, there are essentially two types of real estate investors, both of which can use credit cards to reap big rewards. Real estate investors generally fall into two categories: those who already have the money to fund their project and those who need funding for their flip or rehab.

The strategy for using credit cards varies slightly between the two groups, but the end result is the same — earning big returns on your real estate investments. So let’s talk through these two groups of people so you know which money moves best apply to you.

If you already have money or have secured financing

Regardless of how you got the money — whether it’s from a hard lender, you refinanced one of your other properties, or you secured a home equity line of credit (HELOC) — a credit card is an essential tool in earning big returns on your real estate investment. And the process couldn't be easier.

Use your credit card to pay for all your expenses for your flip, renovation, what-have-you, instead of cash, and stop using your debit card too. By using a rewards credit card, you’ll earn between 1 to 20% back on your spending (depending on your strategy). This is spending you’re already doing regardless of the method of payment, so these rewards are easy pickings. Then all you have to do is use the money or financing you already secured to pay off your credit card balance in full each month.

This entire strategy hinges on always paying that balance in full. Otherwise, the credit card interest you’ll pay on the balance will eat away at the money you’re saving or the rewards you’re earning. When you make purchases with your credit card and then pay the balances with your cash, all the points, miles, and cash back you earn is easy extra profit that’s adding to your bottom line.

A real-world example

Say you’re planning on spending $20,000 on a flip. You go to The Home Depot, make your purchases, and swipe your credit card at the checkout. The credit card you use is the Citi Double Cash Card, which is a flat-rate, cashback credit card that earns you up to 2% cash back. On that $20,000 purchase, you earn $400 cash back ($20,000 x 2% = $400).

Sounds good right? Although this is a great savings, it’s actually not the best you can do. What if, instead, you open a new card and use this purchase to earn a lucrative credit card sign-up bonus?

For instance, you open the Chase Ink Business Preferred Credit Card. Right now, this card offers new cardmembers a chance to earn 100,000 points after spending $15,000 in the first 3 months. That same $20,000 The Home Depot purchase lets you meet the minimum spend requirement in one swipe, and earns you 100,000 Chase Ultimate Rewards points.

Depending on how you redeem your Chase points, you can earn between 1 and 1.25% back on The Home Depot purchase. At a value of 1 cent per point, redeeming those points for cash would earn you $1,000 back. Alternatively, your points are worth 25% more when redeemed for travel through the Chase travel portal. So 100,000 points would be worth $1,250.

And that’s just the sign-up bonus — that’s not even including the points you earned on your purchase itself. With the Ink Business Preferred, you earn 5X points on Lyft rides; 3X points on the first $150,000 spent each year on travel, shipping, internet, cable, or phone services, and advertising purchases with social media and search engines; and 1X points per $1 on everything else. That means your $20,000 The Home Depot purchase also earned you 20,000 points, which would be worth another $200 if redeemed for cash. So that’s $1,200 cash you could earn for making one purchase, which more than offsets this card’s $95 annual fee.

Even better, if you open multiple credit cards over the course of a year, you can earn multiple sign-up bonuses, depending on how much you’ll be spending. In fact, there’s no reason for you to do any spending that doesn’t earn you rewards.

If you need to figure out how to fund your flip or renovation

So, you haven’t yet determined how you’ll fund your real estate project. That’s OK. Taking advantage of a credit card with the coveted 0% APR on purchases is going to be a vital tool for you. This can be a great way to fund your project until you can flip it or rent it out, as these credit cards can provide between 12 and 21 months of 0% interest on purchases.

Most importantly in this scenario, is using a 0% APR business credit card. Why? Several business credit cards don’t report to your personal credit. This is a huge advantage if you’re carrying a balance (which you will be if you’re using a 0% APR credit card to finance your flip) as the high utilization of credit won’t hurt your personal credit score.

A real-world example

Let’s use the same $20,000 in expenses as in the previous example. Using the average credit card interest rate of 17%, you would be paying about $1,753 in interest fees over 12 months. However, if you use a 0% APR credit card, you get to save that $1,753. Instead that money can go toward paying off your balance or toward your next real estate project.

And that savings doesn’t even account for the spending rewards and welcome bonus you can earn from this purchase. In addition to funding your project interest-free for a number of months, you can still take advantage of sign-up bonuses like in the previous example.

The best credit cards for real estate investment

Using business credit cards for your real estate projects is key, as most don’t report your activity to your personal credit history. If you’re carrying a large balance as a result of your flip, this will save your personal credit from taking a hit due to a high utilization of your available credit.

Keep in mind that you don’t need to be raking in a ton of money to get a business card. Chances are, you can get a business credit card even if you’re just starting out. Below are the best small business credit cards that I recommend, along with my favorite choice for a personal credit card.

Card name Welcome bonus Earnings rate Intro APR on purchases
Chase Ink Business Cash Credit Card Earn $750 bonus cash back after spending $7,500 in the first 3 months 5% cash back at office supply stores and on internet, cable, or phone services (up to $25,000 combined annually); 2% cash back at gas stations and restaurants (up to $25,000 combined annually); and 1% cash back on everything else 0% for 12 months
Chase Ink Business Preferred Credit Card Earn 100,000 points after spending $15,000 in the first 3 months 5X points on Lyft rides; 3X points on the first $150,000 spent each year on travel, shipping, internet, cable, or phone services, and advertising purchases with social media and search engines; and 1X points per $1 on everything else N/A
Chase Ink Business Unlimited Credit Card Earn $750 bonus cash back after spending $7,500 in the first 3 months 1.5% cash back on all spending 0% for 12 months
The Blue Business® Plus Credit Card from American Express Earn 15,000 Membership Rewards points after spending $3,000 on purchases in the first 3 months 2X Membership Rewards points on business purchases up to $50,000 each year, and 1X points on purchases after that 0% for 12 months, then 13.24% to 19.24% (variable) (See rates and fees)
Citi Double Cash Card Earn cash back twice: 1% when you buy + 1% when you pay Up to 2% cash back on all purchases: 1% as you buy and 1% as you pay N/A

Chase Ink Business Cash Credit Card

When you sign up for the Chase Ink Business Cash Credit Card, you’ll have the chance to earn $750 bonus cash back after spending $7,500 in the first 3 months. This is extra cash that goes straight back into your pocket and adds to your bottom line.

This card has a $0 annual fee, and it comes with a 0% APR offer on purchases for 12 months. That means this card could be a great option for real estate investors looking to fund their projects. 

On your everyday spending, you’ll earn 5% cash back at office supply stores and on internet, cable, or phone services (up to $25,000 combined annually); 2% cash back at gas stations and restaurants (up to $25,000 combined annually); and 1% cash back on everything else.

Chase Ink Business Preferred Credit Card

Pick up the Chase Ink Business Preferred Credit Card and you can earn 100,000 points after spending $15,000 in the first 3 months. That’s $1,250 when redeemed for travel through the Chase travel portal. This is a huge return on spending you’re doing anyway, which makes this card a no-brainer for funding your real estate project.

Although this card comes with a $95 annual fee, your spending doesn’t go unrewarded. Cardholders can earn 5X points on Lyft rides; 3X points on the first $150,000 spent each year on travel, shipping, internet, cable, or phone services, and advertising purchases with social media and search engines; and 1X points per $1 on everything else.

Chase Ink Business Unlimited Credit Card

The Chase Ink Business Unlimited Credit Card is the one flat-rate rewards credit card out of the three Chase business cards, which makes it ideal if you’re looking for a straightforward earnings structure that rewards you on all your purchases. You’ll earn 1.5% cash back on all spending. On top of that, you’ll get 0% APR on all your purchases for the first 12 months and enjoy a $0 annual fee.

When you sign up for the Chase Ink Business Unlimited Credit Card, you’ll also have the chance to earn $750 bonus cash back after spending $7,500 in the first 3 months.

The Blue Business Plus Credit Card from American Express

The Blue Business Plus Credit Card from American Express allows you to earn 2X Membership Rewards points on business purchases up to $50,000 each year, and 1X points on purchases after that. This card has a $0 (See rates and fees) annual fee (terms apply) and all your purchases for the first 12 months come with a 0% intro APR.

This card is also special for a couple reasons. If you already have an Amex card, American Express will only do a soft credit check when you apply for this card, which means you won’t see the point reduction to your credit score that you would with a hard inquiry. In addition, because it’s an Amex business card, it won't report to your personal credit on a monthly basis.

Citi Double Cash Card

The Citi Double Cash Card card is a flat-rate personal credit card that allows you to earn up to 2% cash back on all purchases: 1% as you buy and 1% as you pay. This card is a great option for real estate investors who already have funding, as it allows you to earn double on all your purchases. There are no spending categories to worry about and no annual fee — just pure rewards.

How far can you take your credit card rewards?

If you’ve been in the points-and-miles game for a while, there’s no reason you can’t go as far as buying an investment property with points. Several of the cards we discussed above are cashback cards, which means you can save that cash and put it toward the down payment on a house — or use your cash back to buy a house outright. I used $28,725 in cash back to make a down payment and pay the closing costs on a rental property, and you can do it too.

With the imminent recession, there’s a chance the housing market will shift. As a result, houses might get cheaper and cheaper. So instead of using your cash reserves or taking out a loan, why not build up some free money through credit card rewards and use your cash back or points to buy your next project?

Bottom line

Using credit cards as a tool for your real estate investment projects can help you earn huge returns. Strategic credit card use is key, as is paying off your balance in full each month. Credit cards with a 0% APR offer can be a great strategy to fund a project, as it allows you to avoid accruing interest on your purchases for many months. Using this opportunity in conjunction with sign-up bonuses can provide you with a ton of benefits that can be turned into cash.

Although this hopefully is never the case, the reality is you can lose money on your real estate investments. Taking advantage of credit card sign-up bonuses that can earn you hundreds and even thousands of dollars can be the difference between turning a profit on your property and losing money.

Earn Cash Back Twice

Citi Double Cash Card

Citi Double Cash Card

Citi Double Cash Card

Annual Fee

$0

Rewards Rate

up to 2% cash back

Benefits and Drawbacks

Benefits

  • 0% intro APR on balance transfers for 18 months
  • 2% cash back on all purchases - 1% when you buy and 1% when you pay
  • No annual fee

Drawbacks

  • Foreign transaction fee
  • No sign-up bonus
Card Details
  • Earn cash back twice: 1% when you buy + 1% when you pay
  • up to 2% cash back on all purchases: 1% as you buy and 1% as you pay
  • Intro balance transfer 0% offer: 0% for 18 months then 13.99% to 23.99% (variable)

Author Details

Brandon Neth Brandon Neth is a credit card and award travel expert. He runs social media and audience growth for FinanceBuzz, including the FBZ Elite Facebook travel group. He’s spent the last 11 years using credit card points and miles to travel the world, taking him to 600 cities in 76 countries and counting. He's well-versed in credit cards, early retirement, real estate investing, and frugal living. He's been featured in Business Insider, Yahoo, MSN, Credit.com, U.S. News, Reader's Digest, and The Wirecutter (A New York Times Company).