Using Personal Loan to BRRRR
I'm only a few months into the BP and RE Investing world, but I'm getting the hang of it pretty quickly thanks to all the advice from members on here, podcasts, books, etc. I have my location I want to invest in determined (Indianapolis) and am looking into financing options before I start making offers on properties and getting my team in the area on board. My question is if there is anything wrong, illegal, etc. with using a personal loan to pay cash for the home, rehab it, and then refinance it to pay it off in 6-12 months after the seasoning period?
I was quoted a 50K personal loan for 7 years @ 9.99% that would only cost me ~ $850 a month with $0 down, no collateral, and no early payment fee. I could also get this same $50k for 6.8% for 5 years, but would cost me a little over $1k monthly. I'd do the longer term at higher interest to keep my monthly payment lower (holding costs) until I refinance within the year.
Can anyone elaborate if there are any legal reasons why I couldn't do this with a SOFI, Lightstream, LendingTree, or other similar company????? Seems too good to be true as HML's were +12% and a couple points with only 6 months - 1 year terms!