What would you do with $25,000?

Question

I just received an offer in the mail from a bank I have used in the past. They are offering 25,000 at .50% with no origination fees no prepayment penalties. It says "Can be used for debt consolidation or another purpose" thats all I know at the moment. Has anyone used a loan like this? Seems gimmicky but also useful.

Thanks all!

Wilson Churchill · Answer

I would purchase a house outright, fix it up, rent it out, then use the house as collateral to borrow more money.

Daniel DiGiacomo · Answer

1/2% For how long? Line of credit or loan?

Interesting.

I like cheap money :-)

Andrew Syrios · Answer

At 0.5%? Are you sure that's not 0.5% over some swap rate or something like that? I've never seen a rate that low (other than on a CD, but that's a different matter).

Account Closed · Answer

@Taylor Reichert

Sucks that it was a false alarm.  Typically if the fine print isn't included in the mailing, then it is a too good to be true marketing campaign.

Now that I have decided to pursue REI, I am craving the 0% no fee credit card offers I used to get.  In the past, I would merely just take advantage of the interest rate arbitrage and park the money in a CD or savings account.  Now I would most certainly try to use it for some type of real estate deal.

Joe Villeneuve · Answer

@Taylor Reichert Correct.  The answer to every question you don't ask is always "no", but the answer to to the questions you do ask are ???????

Joe VilleneuveREcapSystemA2REIC

Franklin Romine · Answer

@Taylor Reichert Ask the bank for 100K.  It never hurts to ask.

Frank

Taylor Reichert · Answer

Ok, false alarm. They said they will REDUCE the rate I qualify for BY 1/2%. But I still like the idea you presented @Joe Villeneuve . I will be looking for opportunities like that as I save.

Taylor Reichert · Answer

@Joe Villeneuve

I like that. I have no experience in investing. That could be a great way to learn and get my foot in the door.

@Daniel DiGiacomo

Absolutely. I assumed 5 a year loan and ran the numbers and the cumulative interest is a mere $310.01. I don't know the actual terms yet. I will make the call.

I don't know if its fixed or variable.

Joe Villeneuve · Answer

@Taylor Reichert All depends on the market you're in.  That may not be enough to do much, but it might be enough to be a lender, like a GAP partner to another deal.  The other investor needs $10-25k to fill in a GAP in funding...usually short term.  You charge more to them than you are charged by the bank for this loan, and you'll make money.  Do this until you build the $25k up to where your market allows you to be more of an investor.

Here, you could be a full partner with someone else, and be buying cash flow deals in sequence.  You could do a lot with it.

Like I said above, it all depends on your market, but every market has someplace or someone that needs it.

Joe VilleneuveREcapSystemA2REIC

What would you do with $25,000?

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