Funding options for a first time buy and hold investment

[Chris Long]

Hello everyone,

I just got started on this journey and I have been reading and studying for a few months. I chose a location and a first investment property from a wholesaler. I live in Colorado but chose the Orlando to Tampa area to invest. 

The property I chose is relatively inexpensive which I thought would be great for the first time to minimize the risks in my learning curve. Unfortunately this did make obtaining a loan more difficult. I was preapproved for up to 200k but my property was less than 50k and with a 20% down payment the loan value was just too small for a normal lender. I almost have enough cash to pay for the property outright but I was hoping to use that cash for a BRRRR on a second home.

The home is a small 2/1 SFR. A renter is already in place paying 750/mo and just signed a new, year lease. $47,900 is the agreed price of the house and I have put down a $3000 deposit and signed paperwork for it.

So my options as I see them are these:

1. I was approved for a loan from a hard money lender with unappealing terms. 12%, 4 points, 12 months before I need to extend the loan or refinance. The loan amount would be $30,000.

2. I take a loan out on my vehicle and get $29,000. The rate would probably be around 5% with a term of 5 or 6 years. I would operate the house at a small loss during the loan period but then I would own the house after the loan was paid off. 

3. I find a private investor who is willing to part with $30,000 for a longer term and hopefully a good interest rate for us both.

4. I borrow a few thousand from a friend or family member and pay cash for the house. This would give me the highest passive income per month but would tie up my cash and complicate investing in another house.

So those are my options as I see them. I have attached a link for the buy and hold analysis that is built paying cash for the property. I would appreciate any advice or comments.