Will This Creative Lending Plan Work?

[Dan Cournoyer]

Hi BiggerPockets community,

I have one rental that was purchased using a loan from my family.  Definitely helped me get a head start in the rental real estate world.  I'm holding for long term and everything has been going great.  I'm ready for rental #2 now.  I have money saved but do not have enough to buy in cash.  Let's assume I only have access to bank lending (please don't give suggestions saying I should find people willing to invest, I'd like to stick to a bank for now).  I have found the following to be true from banks lending money for investment properties....

1) Loan term will be 20-25 years (not the 30 years most personal residences are able to receive)

2) Interest rate is 1% ish higher than personal property loans

3) Down payment requirements are between 25%-30%

You can probably see where I'm going with this.  Other investors I know bought a place, lived in it for 1-2 years and now rent it out as an investment property.  The bank doesn't know or care because they're receiving the mortgage payments on time and there's no change of title or anything.

Here's my plan.......Can I purchase a second residence/vacation condo?  I have family that visits from out of state often so there is a legitimate reason to have the space for visitors when justifying with a bank.  If it worked I get lending at a reduced interest rate, I get 30 years, and my downpayment can be 20%.  I use the condo personally for 6 months and then rent it out as an investment property.  Worst case scenario I try and the lender/bank turns me away.  There may be some gray area here in terms of ethics so I'm interested to know what you think.  Is this too sketchy/unethical?  Do you know anyone that has done this before?  Anything I'm not considering?

Thank you for your help!!!

Dan