Finally Out of Debt Looking to Invest....

[Anthony W.]

I am finally debt free and looking for suggestions from ANYONE on how to break into the Real Estate arena. Below are some thoughts I had about the way to go about it. I currently have a pretty good credit score now but just a small savings of 10K with access to borrow up to another 60K personal. 

1. Take a hard money loan and purchase a place to rent

2. Get a personal loan and purchase the property outright, BRRRR it and pay off the loan.

3. Use the BRRRR with the Hardmoney loan (only thing is no purchase track record)

Like I said any thoughts will help and thank you.

[Joe Villeneuve]

Option 4)  None of the above.

1 - You NEVER use HM as a way of buying a rental unit. HML are short term and very expensive. They are only used for flipping.

2 - I doubt you would be able to get a personal loan large enough to buy all cash.  If you did, it will still take you at least 6 months of seasoning so that you can claim that the money you are using for the purchase is not a loan.  Then, another 6 months of seasoning to me able to do a cash out refi.  Yes, this would be considered a COR since you would have used 100% cash to buy it.

3 - The HML would be way too expensive, and the cost of it would probably get you negative CF while it was still in play.

Option 5 - Learn how to buy using some form of seller financing:

a)  Lease Options
b)  Seller holds paper and you make payments directly to the seller.  This would require a property where the seller had no debt on the property...but in this day and age that's not that big of a problem.

Option 6 - Take on a partner that has the cash.