The Hard Way: How I Learned the Difference Between a Credit Card and a Charge Card
Back in 2001, I was still relatively new to real estate and feeling confident after some early success. With a little extra cash, I decided to invest in two run-down four-plexes. The price was too good to pass up, and I figured I could rehab them, raise the rents, and build some solid equity. At the time, I had an American Express Gold Card . For those who aren’t familiar, it’s a charge card, not a credit card —which means the full balance is due at the end of each month. No carrying a balance. No minimum payments. Fast forward to March 2003 —business was booming! I had 11 properties under contract , all scheduled to close in April. Feeling confident, I started pouring money into rehabbing the four-plexes, thinking that by the time my commissions hit, I’d be sitting pretty. I racked up over $20,000 in renovation expenses on my AmEx. Then it happened. Seven of the eleven deals fell through. If you’ve ever seen Honeymoon in Vegas with Nicolas Cage, there’s a scene where he almost has a...