lol i mean.. I do not know what to tell you guys. Did you pay via check, or online? When I do it online, it does not happen. Check though, every time. It was a joke to start with.

i have a friend who is in his 50's...does a job that he can do for nearly forever (lets say 70's or so until he would even want to retire) and grosses approx 250-300k/year.

he maxes out mortgage/heloc, credit cards, etc, etc, etc. and each month makes only min payment.

corvettes (blah), condos, whatever.....he fully intends to die and leave them holding the bag, HOWEVER.....that being said, it is not FRAUD. he is operating within the terms of service. He has a debt, he pays his monthy debt service per the terms of service, the end. The CC companys/lenders should also have well paid actuarials telling them this guy is gonna kick it sometime and they should reduce credit lines appropriately, but alas, they do not. I'm sure they are quite happy making their 10-12 percent APR

Best way to screw the credit card companies is not to do business with them.

I guess the lenders do have well paid actuaries that say he will die sometime but they probably also say he will make the CC companies rich before dieing.

+1

But if you're not going to do business with them, then you shouldn't much care if you screw them.

I don't. I was just answering the question for the guy that wants to screw them.

You're the last poster to whom I would expect to see the term "judgement proof" self-applied.

I know that if you overpay and then never use the card again and the credit balance is just sitting there for months eventually they send you a check for that amount. That happened to me once.

Is this really possible?

How about you use all your cash advances to buy gold bars and then dig them up and buy a mobile home and a grill after they release you from debtor's prison.

No.

I have 8 credit cards, and have made full on-time payments my whole life. They have never made a dime off me in fees (except for a 1% foreign currency exchange fee) or balances. However, they still treat me like gold. My credit limit goes up regularly (over 15k for each card), i get great service. When they screw something up, they fix it right away and refund me any accidental fees.

You do realize they make money off each CC purchase we make? Not to mention they sell your name to mailing lists and charge for advertisements in your monthly bill.

Why not? The story goes that Robert Townsend financed his first movie "Hollywood Shuffle" entirely off his credit cards. If the movie hadn't made money, he would not have been able to repay the debt.

That is nothing like your proposal. Lots of under funded businesses use personal credit cards to pay for operating costs. In your proposal you then wanted to leverage the cash advances using a very high ratio mortgage. Someone who has maxed out his credit cards would never qualify for that kind of financing.

Also some percentage of people who are responsible will be unable to make payments at some point due to no fault of their own such as job loss, personal injury, or illness.

IMO one of the best ways to screw credit card companies is to charge your card as much as you can and run the balance as close to the limit as possible. Then to always make sure you pay the balance in full on time every month, so that the credit card companly loses all the interest on the float every month. They get nothing from you in return. But it depends on if you are talking about the credit card issuer or the payment processor. Visa makes money either way, but your bank or whoever else issued the card is the one that loses in that situation.

"never qualify for that kind of financing"

Might be true today (for the novice), but in 2006 it was happening all the time. I personally know of 2 people that did what the original poster said. One person bought 15 homes off her and her husband's credit cards. She crashed and burned and there was an article about it in the local newspaper. (she declared bankruptcy and the houses were all forclosed on)

Another person i know who did it luckily turned around and sold his 2 duplexes ~6 months after buying them. he was severely -cashflow and getting hurt bad but found a stupid CA RE investor to take them off his hands. (dumber then him, hard to do but he found one)

There are many books and other success stories about people buying RE on credit cards. It happens more then you think. As long as you're willing to lie on that one piece of paper at closing that says "have you taken out any loans recently" you can time it so the cash advances don't hit your credit report and funding goes through.

I'd bet any amount of money that I could time it correctly today. I'd even give odds.

Just guessing but I would think you could do more damage from the inside than the outside. Get a job working for them, then get creative. Not suggesting anyone do it of course, I just think this would be one of the worse things that could be done to hurt them.

What surprised me most about his suggestion was the level of leverage. If I save up 30k$ I can control 1million in real estate?

Some people are SO negative.

RikaKazak

You don't need to establish the source of the down-payment in the States? What he proposed would never work in Canada as part of the anti-money laundering requirements is that the funds used for the down-payment have to be in your bank account for at least ninety days. If not you have to show documentation as to where it came from.

I find that hard to believe as well. I know the US system is considerably more lax with income ratios and more aggressive with respect to leverage ratios but this just seems ridiculous.

The banks don't get a share of the fees?

Best way to screw a credit card company:

Assume the identity of a dead person (perhaps a baby that died at birth?), and using their social security #, apply for credit cards. Receive said cards, charge to max credit limit, throw cards in the trash.

Assume the identiy of another dead, person, repeat, etc..

1.) no anti money laundering laws to worry about...it's up to the banks how far "back" they require you to document the source of the money. I've done deals where I had to show where the money came from (usually like 2 weeks before funding) and I've done deals where I never showed where a penny came from.

2.) it's easy to control more then $1mill in RE with less then $30K out of pocket. When you do commercial (aka apartments over 5 units) you let the building secure the mortgage and debt/income or "down payment" don't matter. It's all "what you pay vs. what the building is worth"

example: you find a building worth $1mill. The seller will sell for $700K. you then get a mortgage for $800K...buy the place, and use the $100K to cover closing costs (aka you roll the closing costs into the mortgage) and maybe some fix ups you wanted to do. (yes I realize that today it's hard to break the 30% mark on commercial, but I think it can still be done...aka I'm trying to do a deal like that as we speak, and in 2006 it was VERY easy to do...you could of probably got a $900K mortgage)


Another example where I don't "find a great deal"

You find a building worth $1mill. You pay the person $30K for a 5 year lease option. In 5 years the building is worth $1.4 mill. In 5 years you take out a $1.1 mill mortgage. You again take the $100K for closing costs etc. and bam....you got a big place with less then $30K out of pocket with only "slightly better then historic" returns

Taking $30K to control $1mill is only a level to people who are not in the RE world. It's like talking to non poker people about poker. Making $300K in 1 year....but how much did you lose?