Updated almost 8 years ago on .
Use land as loan collateral to start investing?
Hello everyone!
I am just now embarking on my rental real-estate adventure. My dad has volunteered to help me get started by allowing me to use some of his land (vacant, no structures, only used as cattle pasture at the moment). In your experience, would this be a good way to get some start up cash, or would interests rates on these kinds of loans be too steep? I believe my dad said he purchased the land about 10 years ago for about 70k and property prices have steadily gone up since then. However, Google seems to suggest that the interest rate could be quite high and lenders won't lend as much since the land is vacant.
To put my situation in context, I am currently working a W-2 job and my family and I are renting, so I am hoping to find a suitable multi-family property such as a duplex to move into for a house hack. I am debating between attempting a BRRRR (using land equity to fund rehab) or a turn-key that would meet the FHA loan guidelines and just get an FHA loan.
Any wisdom/guidance is greatly appreciated! Thanks!