Using low interest loans as a down payment on a property.

[Gervon Thompson]

Hey guys! Just wondering, at this moment in time I have a 800 credit score and make around 60k after taxes, however I’m not able to save most of it due to aggressively paying down my student loan debts. In light of what’s going on interest rates have been really good and I’m experiencing a bad case of FOMO. With hardly any liquid reserves I was just wondering if it would be a good idea to use a low interest personal loan as a down payment on an investment property ? I probably can get a fixed interest rate of around 4% as of now, but kind of nervous about how the overall numbers might pan out. Pardon my ignorance I am new to real estate and this would be my first venture if feasible. Thanks in advance!

[Abel Curiel]

Originally posted by @Gervon Thompson:

@Bob Okenwa

Oh! I see. Thank you for response, the numbers hardly make sense for house hacking in and around the New York City area. All housing prices are so heavily inflated.

You're right, in most instances, house-hacking #s don't make sense. When using this strategy, the factors you'll what you want to focus on are:

- Finding a property that will allow you to lower your living costs from where they currently stand.

- The potential from house-hacking is sometimes not realized until refinancing and moving onto property #2. Oftentimes, you'll begin to cashflow once you move out of property #1 and fill the unit with a market-rent paying tenant.

- Adding value to the property by adding amenities (laundry, storage, ADU, etc).

- Gaining 3 forms of experience as a house-hacker that will help you scale your portfolio in the future. 1. acquisition experience 2. project management experience 3. property management experience.

Best of luck to you moving forward!

Abel