Updated over 4 years ago on . Most recent reply
Finally Out of Debt Looking to Invest....
I am finally debt free and looking for suggestions from ANYONE on how to break into the Real Estate arena. Below are some thoughts I had about the way to go about it. I currently have a pretty good credit score now but just a small savings of 10K with access to borrow up to another 60K personal.
1. Take a hard money loan and purchase a place to rent
2. Get a personal loan and purchase the property outright, BRRRR it and pay off the loan.
3. Use the BRRRR with the Hardmoney loan (only thing is no purchase track record)
Like I said any thoughts will help and thank you.
Most Popular Reply
#5 All Forums Contributor
- Plymouth, MI
Option 4) None of the above.
1 - You NEVER use HM as a way of buying a rental unit. HML are short term and very expensive. They are only used for flipping.
2 - I doubt you would be able to get a personal loan large enough to buy all cash. If you did, it will still take you at least 6 months of seasoning so that you can claim that the money you are using for the purchase is not a loan. Then, another 6 months of seasoning to me able to do a cash out refi. Yes, this would be considered a COR since you would have used 100% cash to buy it.
3 - The HML would be way too expensive, and the cost of it would probably get you negative CF while it was still in play.
Option 5 - Learn how to buy using some form of seller financing:
a) Lease Options
b) Seller holds paper and you make payments directly to the seller. This would require a property where the seller had no debt on the property...but in this day and age that's not that big of a problem.
Option 6 - Take on a partner that has the cash.