Hard money loan for 20% down payment or 100% and refinance?
I am looking at going into the single family household rental business here in Michigan. Being young (22) I do not have the 20% down payment for investment real estate. Also I do not want to live on the property for a year to get an FHA loan with 3.5% down payment (even if it is a multifamily). My credit score is over 700 at all three credit unions.
I am renting a home my friends family owns for an unbelievable deal so I do not want to move out of that position.
My question is would it be wise to get a hard money loan for the 20% down payment for a conventional loan and use the CF from the rental property to pay down the hard money loan first.
OR:
Use 100% hard money and then refinance the property to one conventional loan. If I did this would I still need a sizable down payment to refinance.
My expectations of this is to have some extra income to pay down student loans which come into repayment in October. I would still work my old job while I did this.
Any and all advice is greatly appreciated.