I want to buy a cheap little rental in Denison TX for 12,000 and need a loan for that amount. I have a small house already paid for that rents for $300 per month I would be willing use as collateral as well. I know it is pocket change for many of you but I am just getting back on my feet after a few tough years.
Any ideas as to how I can raise this money?
Thanks,
Dwight
If possible, use a balance transfer check for a 0% deal to fund the acquisition. There is a 3% fee, but you will save much interest provided you pay the property off quickly enough.
If that is not possible, then I would try to get a HELOC on the first property. This will save thousands in closing costs. A home equity loan would also work, but the rate would be higher.
If you plan to keep debt on the property for a long period of time, then a fixed-rate mortgage is the way to go.
If your credit doesn’t allow any form of traditional financing, your other options are a hard money lender or some sort of seller financing (land contract, lease option, sub2). You could also try to borrow the money from family or friends, paying either interest or equity.
Another option is to borrow against a retirement account or a whole life insurance policy. You could even take a margin loan (very low rate) if you have equities.
It has been a month since your posting. Do you still need the $12,000?