Purchase Condo with a Personal Loan - HELP

[Chelsea Hill]

Hi All! 

First time poster here. I just wanted to get some advice on an opportunity I'm interested in pursuing. I am Manchester, CT and am looking to purchase a condo. The list price is $52k, but comps have sold in the same complex from between $30,000-$43,000 so I was going to offer $38,000 with $9,000 down payment. The 2 bedroom unit is currently rented for $1,000 a month with the renter responsible for utilities. I spoke to my mortgage broker and she informed me that I would not be able to finance $31,000 (38,000 - 7,000 down payment) because it is too low ( I get it - bank wouldn't make enough money). 

I was doing some research and learned that I could maybe finance the purchase with a personal loan through a local credit union. The seller is interested in a cash purchase.

Here is a breakdown of what the numbers are:

List price: $52,000

My offer price: $38,000

HOA Fee monthly: $243

Insurance monthly: $25

Taxes monthly: $163

Funds I have available to contribute to cost: $15,000 

Amount I would need personal loan for: $23,000

This is my first real estate purchase. Does this appear to be a sound investment? Is it risky to use a personal loan to finance the $23,000? What interest rate should be the max I would take?

Any and all thoughts and/or advice is welcome. Thanks in advance! 

[Michael Noto]

@Chelsea Hill First off, welcome to BP!  Always great seeing others from Connecticut on the forums.

Have you exhausted all of your conventional loan financing options?  Other than your mortgage broker, have you reached out to other lending professionals?  There are mortgage people here on BP that specialize in dealing with loans like this.

The only reason I ask is because I am sure you know that the fees and interest rate for a personal loan will be a lot less favorable than a traditional mortgage.

Are you working with an agent?  If so, they should be able to guide you on this and refer you to people in their network I would think.  If you aren't working with an agent it may be a good idea to work with an agent that has experience with investment properties.  It costs you no money to work with an agent and they can be a valuable resource for you.