Creative Financing - Personal Loan for Down Payment?

[Harrison Kliegl]

Hello,

I'm honing in on my first investment property, but am still having trouble with the financing options. My strategy is turnkey duplex rental property. I've been researching and listening to the podcasts, talking with lenders, networking etc. So, before everyone jumps in suggesting to find a partner, know that that is of course still a viable option ;)

But in the meantime, while I'm analyzing deals without a partner, I'm usually assuming the financing approach of a conventional loan with 20% down. This option keeps interest rates low, and does not conflict with the current mortgage I have on my primary residence (have been living in for less than a year). My question is: 

Is it realistic, or rather, is it a smart strategy to take out a personal/private loan or line of credit to use as the down payment for a conventional mortgage loan?

My thought is that its better to have the majority of the mortgage at low fixed rate, and have the 20% at higher interest rate (but not nearly as high as a hard money lender), and still have the positive cash flow from the property to pay off the down payment loan within a couple years.

So for example if I'm looking at a property asking $100,000, and I have $10,000 cash on hand... is it more advantageous to find a lender that would finance 90% of the property (without being owner-occupied) or to find a lender that will loan me $20,000 which I can use as a down payment for a conventional mortgage loan?

Any thoughts/insights are much appreciated!