Updated about 5 years ago on . Most recent reply
Family Loan for BRRRR Ya or Na?
As I am just starting out and still working on building capital to purchase properties I am thinking up strategies to buy a second property. My current property had a low down payment and so it currently does not have enough equity to take out a second mortgage on, as well as I do not have the cash flow to be approved for a second mortgage as well as a mortgage on an investment property. I have a family member who is willing to give me a low interest short term loan so that I would have the funds for a down payment on an investment property to build momentum in the BRRRR strategy. The models which I have created which take into account repaying the loan as well as the amount of equity a lender would require me to keep in the property to take out a second mortgage landing me essentially in the same situation. Granted, I would have a second property and increased cash flow. Is the purchase of a second property enough of a gain to end up back in the same spot? Any recommendations or past experiences with this would be greatly appreciated!