BRRRR (+househack) strategy using parent's money

[Edgar Perez]

GOOD MORNING VIETNAM,

So I am trying to be creative in financing my first duplex; I have a couple options, FHA, a first time home buyer conventional loan from local credit union or private lender (my dad). So what I want to focus on is having my dad loan me the cash (100% of purchase value) to buy a property that I would be living in and potentially using the BRRRR strategy on. What challenges may I run into when doing this. I've read that gifted money cannot be used for an investment property but since 1) I would be living there and 2) it would be an all cash purchase does that put me in the clear? Obviously plan would be to Buy Rehab Rent (rent half live in half) Refi (pay back pop) Repeat. Looking for any insight on this, just trying to be creative here and use the tools at my disposal. Thanks in advance, and for what it is worth I am located in South East Wisconsin in between Milwaukee and Chicago.

[Shawn Ackerman]

Hey @Edgar Perez I use private money to purchase real estate, however I make a loan agreement  and promissory note between me and my private lender unsecured by real estate.  This allows me to delay refinance the property and forgoe the 6 month seasoning requirement.  Since it appear as a person loan I simply forward the loan agreement to the bank when they are looking for the source of funds. I'd suggest securing your dads capital against the property to make him comfortable then in 6 months you should be able to refinance out using a conventional lender.