Using personal line of credit for down payment on rental property

[Takiyah Riley]

Hey everyone, So this what I did..I have access to 60K in personal LOC. Instead of using my own capital (16K) I used 30k of my personal LOC for the down payment on a duplex. The all in cost is 85K with an ARV of 125-150K. My plan is to rent out both units (potential $1500 a month) aggressively pay down the LOC enough to get my credit score back to refi standards, since it will more than likely take a dive due to my utilization increasing from maxing out one of the LOC. Once I get my score back I will refi, pay off the remainder of the LOC and continue to make the mortgage payments and collect the positive cash flow. What's your thoughts?

TIA

[Jonathan Taylor Smith]

Hello @Takiyah Riley - I find nothing to be wrong with using a personal LOC as down-payment source to acquire a cash-flow producing asset... That is as long as you account for the LOC payment and interest in your analysis of the opportunity.