Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Creative Real Estate Financing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 3 years ago on . Most recent reply

User Stats

5
Posts
3
Votes
Aaron Reeves
  • Real Estate Agent
  • Boise, ID
3
Votes |
5
Posts

Using Personal Loan to BRRRR

Aaron Reeves
  • Real Estate Agent
  • Boise, ID
Posted

I'm only a few months into the BP and RE Investing world, but I'm getting the hang of it pretty quickly thanks to all the advice from members on here, podcasts, books, etc. I have my location I want to invest in determined (Indianapolis) and am looking into financing options before I start making offers on properties and getting my team in the area on board. My question is if there is anything wrong, illegal, etc. with using a personal loan to pay cash for the home, rehab it, and then refinance it to pay it off in 6-12 months after the seasoning period? 

I was quoted a 50K personal loan for 7 years @ 9.99% that would only cost me ~ $850 a month with $0 down, no collateral, and no early payment fee. I could also get this same $50k for 6.8% for 5 years, but would cost me a little over $1k monthly. I'd do the longer term at higher interest to keep my monthly payment lower (holding costs) until I refinance within the year. 

Can anyone elaborate if there are any legal reasons why I couldn't do this with a SOFI, Lightstream, LendingTree, or other similar company????? Seems too good to be true as HML's were +12% and a couple points with only 6 months - 1 year terms!

Most Popular Reply

User Stats

1,394
Posts
1,180
Votes
Allan Smith
  • Developer
  • Nashville, TN
1,180
Votes |
1,394
Posts
Allan Smith
  • Developer
  • Nashville, TN
Replied

Agree with ned.

it's better than a hard money loan. I would wait until you have a property under contract if you do go this route. It's legal so no worries there.

Loading replies...