Creative financing (65/35 split)

[Christian Podedworny]

I am in the process of buying my second home as a rental property but the local banks will not provide financing on a loan amount below $75,000. I have several options to buy this home using opm and some of my own capital.

Asking price of home: $36,000
After negotiation I may get the price to $31,000

Option 1: Buy the home using 2 credit cards mine and my brother $20,000 and the shortfall will be paid from our own capital. After closing on the home I will refinance the loan and pull out $30,000 to $35,000. BTW, my credit card has 0% interest rate for the first 15 months.

Option 2: Refinance my first rental home which may have an appraised value of $40,000 (newly renovated) and pull out 75% Loan to value = $30,000. The shortfall will be covered through my credit cards.

Which option should I take and why is it better? If you have any other creative financing options please share. BTW the owner will not provide owner financing
;(