All Forum Posts by: Lisa Renee

1. I don't recommend using 100% debt for the whole deal. If you have zero cash, that is exactly when your luck will run out.  What if you got a personal loan for $30,000 and bought a foreclosure, because most of them are not bankable with a traditional mortgage due to all of the repairs needed. Your goal would be to improve the property so that it would qualify for a mortgage, which has a much better rate.  A lot can be done by cleaning the place up, repairing the holes in the walls, ripping out stinky, stained carpet, etc. Use your Home Depot card for paint supplies, fixtures, and appliances. Once you could live in it, go to your bank and apply for a Home Equity Loan. They will order an appraisal.  The bank should loan you up to 80% of the value, which is more than what you paid for it. If it appraises for $50,000 or more you can get a traditional mortgage or a home equity loan of $40,000.  This should pay off the higher interest personal loan and hopefully your credit card balance. HELOCs are interest only, so your payments will be about $200. That is cheaper than rent. Or rent the place out and take the cash flow.  This is just to give you an idea of what COULD happen.

@Lisa Renee You said this will be your first property "ever", so why not house hack? Get a FHA loan with a credit score of 580+, pay 3.5% down payment, honestly state you intend to live in the house for a year (although things can change during a year), live there and in the meantime get more RE education while planning your next real estate investment. IMO, the FHA underwriting for a first-time buyer using the house as collateral may be more suitable than trying to get an unsecured personal loan or hard money loan. Good luck!

Yes, if you get a personal loan or a HELOC on your personal residence you can buy a property free and clear. I have used personal loans of $20,000, combined with some savings, to buy property with cash. I typically pay these back within a few months because I like to keep my debt as low as possible. I once used an $80,000 HELOC to buy a house like cash. That house is owned free and clear and I use the rent from that property to pay off the HELOC very quickly.