Using LOANS as down payment

[Chuck Rhodus]

I found a seven Plex apartment building I want. I am going to get a HELOC for the down payment but will still be short $20,000-$30,000. I may be able to get a financial partner for this balance but if I cannot what are your thoughts on using an additional loan? We all get those mailers from loan companies. The interest rates are not that high from these companies and actually lower than what I would pay a financial partner to join me. I have not spoke to our lender yet to see how they feel. Has anyone done this or have any comments for me?

[Nathan Gesner]

My personal opinion is that you're taking a big risk.

Your HELOC isn't enough, which tells me you maxed out the equity on Property A in order to purchase Property B. You are still short, however, and want to borrow even more.

If you default on one loan you could end up losing the whole enchilada. That's not a wise choice.