So a family member is wanting to sell her rental. She just wants to wash her hands of it, and the cost of maintenance and dealing with finding a new renter isn’t worth it to her. She’s willing to sell it to me at tax appraisal cost, which is $35k. It’s not a big home, just an 800 sq.ft 2 bed 1 bath house, but it’s in good condition. My problem is I just bought a home and changed careers, so I don’t have 20% down for a regular loan. I’ve considered getting a $40k personal loan and immediately taking out a cash-out loan using the property as collateral to pay off the personal loan. I’m hoping I can find some advice because it seems like a pretty good opportunity to me. Does anyone have any advice, or am I just being too ambitious and should let it go?
That sounds like a solid deal, especially at that price. Have you looked into how lenders view personal loans in relation to your credit?
Asa said:
That sounds like a solid deal, especially at that price. Have you looked into how lenders view personal loans in relation to your credit?
I haven’t fully dug into it yet, but I’m worried it might complicate things. Do you think lenders would be hesitant?
If the rental is in good condition and you can manage the mortgage, it might be worth pursuing. Just make sure you understand the risks of using a personal loan as a stepping stone.
Darcy said:
If the rental is in good condition and you can manage the mortgage, it might be worth pursuing. Just make sure you understand the risks of using a personal loan as a stepping stone.
That’s a good point. I need to weigh the risks carefully before moving forward.
Have you considered other financing options? Maybe a smaller down payment program? Some lenders offer that for investment properties.
Tavi said:
Have you considered other financing options? Maybe a smaller down payment program? Some lenders offer that for investment properties.
I haven’t looked into that yet. I’ll definitely check what options are available.
Just be cautious with taking on too much debt at once. Balancing two properties could be tricky, especially with your new job.
Nova said:
Just be cautious with taking on too much debt at once. Balancing two properties could be tricky, especially with your new job.
I appreciate the concern. I’ll make sure to think it through carefully.
It might be a good time to consult with a financial advisor who can give you tailored advice based on your situation.
Derry said:
It might be a good time to consult with a financial advisor who can give you tailored advice based on your situation.
That’s a great idea. I think having professional advice could really help clarify things.