Taking out investors loan for tax sale auction practical?

[Mack Lev]

Okay so granted my situation.. •$5k line of credit •1 cheap rental property owned free and clear It's a start to start rolling in real estate but to me honestly my resources are limiting me. So I was considering taking out a investors loan with a down payment to go to a tax sale auction to win a property that was originally out of my range then pay the loan back on the flip. Worst case scenario is that I walk away at the tax auction with nothing or my other efforts in trying to find the right deal have failed. So I would just return the loan, pay the interest, pay the repayment fee, and the monthly payments that came with the loan. For a $50k loan that may all equal out to $1500+ of my own money just for holding the loan. My question to you seasoned investors is what I'm thinking practical? I mean I dont want to go to a tax sale auction and get outbidded every single time because I didn't have the money to compete with anyone. That's a waste of property researching and my time. I'd like to know what you guys think or if there's any other methods to use the loan money to my advantage or to even jump in real estate with the resources I have. All responses are appreciated. Thanks in advance -Mack

[Percy N.]

Is this a loan against a current property or an unsecured loan?

As you probably know, you will need cashiers checks at the time of bidding for the deposit and depending on your county, cashiers check for the full payment the same day or within days.

My recommendation would be to attend a few auctions and practice bid (do the research and select a max bid amount for the properties you are interested in).

Once you are confident, get the money and bid. It is quite common to come back empty handed unless you have a big war chest.