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No. of Recommendations: 3
Go with the Bank Loan. Take the time. The Bank wil be a "second opinion" on your speculation about the housing market in your area. Some people say there is a real estate bubble. Although my opinion is that with oil going up, lumber and construction materials, going up, vacant real estate going up,and interest rates going up; to build a new house on vacant land today is getting very expensive so the existing housing stock which was built/bought cheaper is still holding it's value. However,many people would caution you that you COULD be the last guy to buy high and then invest more money and end up with an expensive house that you can't sell when the bubble bursts. However, in my opinion, if the bank is your partner that is less likely to happen. I think your idea is a great idea, and you should do it but having a relationship with a bank is essential in the contracting business. You'll need a line of credit now and then in the future, plus you need to rebuild your financial reputation by having bank loans and paying them. You could become a very important future customer of the right bank. Doing lots more real estate deals in the futre, making both you and the bank money. Think like a winner, think long term not short term. I believe you should leave your IRA alone (that is your Extreme emergency fund)and find out how much the Bank would require of you. You have the skills that can make you a lot of money if you go slowly and cautiously. Just my opinion. Good luck.
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