Taking a personal loan to purchase a home

[Dazrell Fleming]

So I found a deal for 45k on a single family home valued at 75k. Since the home is under 50k I struggle finding a bank to finance the deal as an investment property. So I applied for a personal loan at 10.9% apr over 84 months. With the idea of doing a refinance cash out loan in a year. Some pros: I get to avoid putting down 20% and having 6mo reserves on investment property. This is my first deal, am I on the right track or missing a key component? Daz

[Omar Khan]

@Dazrell Fleming What are the rents in this neighborhood? Your best (i.e. safest) bet would be to make all preparations necessary to have this rented out asap (assuming, this is a cash flow property). Automatically, your loan bills starts getting paid. I would aggressively pay down your loan bill (high interest rate) as when you're buying more houses, your existing loan balance will count against you. If you have a lower rate - akin to conventional financing - I would suggest you let it run and enjoy the ride. 

That being said, I would dissuade against credit card game. As @Bryan O. has pointed out that's a risky game to play. Furthermore, in most cases, you don't get to transfer balances for free (this is the point most people miss). There's always charge (there is no free lunch in life). Furthermore, at the amount of money you are "borrowing", you will be substituting a lower interest rate for a much higher interest rate without giving yourself any room to maneuver in case things go sideways (and they often do). 

You've managed to land a great deal. Why put that in jeopardy? Stay safe, enjoy the ride :)