Borrow from family for BRRRR to keep interest tax deductible?

[Kevin Dubina]

I'm planning to do a BRRRR. Cash purchase for 90k, put in 15k and refinance for 110-120k

Since interest is no longer tax deductible unless you get a mortgage at the time of pruchase, I'm thinking it makes sense to borrow money from a family member rather then pay cash upfront, so when I refinance I can still claim the interest on taxes. Really, I could borrow the full 90k upfront so when I refinance I can deduct interest on the 90k.

Any issues with this? As long as the mortgage to family is well documented and at the prevailing market interest rates, I think it should pass muster

[Jesse Hinaman]

@Kevin Dubina You don’t need to worry about interest write-off. If it’s a primary home, you’re better off taking standard deduction since you’ll have such a low loan amount. At which point, interest write-off is irrelevant.

If its investment property, you get to write off 100% of expenses. Interest deduction rule does not apply on investment properties.