Want to invest in property, don’t how how to start

[Moises Rodriguez]

Hi all! My wife and I paid our house off a few months ago, it was on a VA loan. We're interested in getting investment property to start some extra cash flow and increase our assets. The problem is, the multi family houses here cost anywhere between $700K and past the $1 million mark. I've called several banks and they've said to use a VA loan (with $0 down) I need to live in the house for a year. If I don't plan on living there then I'd have to get a conventional loan and put down 20-25%. That's a big chunk of cash that I don't have saved up yet. What can I do? My goal is to be able to get an investment property with the least amount of money I need to put down and create some positive cash flow. Any advice would be greatly appreciated.

[Melissa Hartvigsen]

Hello @Moises Rodriguez

The banks you spoke with recommended that you live there for a year so you can take advantage of 0% down payment as a Veteran.  If your goal is to get into the investment property with the least amount of money out of pocket this is the way to do it. Ask yourself, is the money you spend to move twice (once to the investment property, and back to your house after renting out for a year) is worth not putting $175,000 down on a $700,000 property.

For conventional loans here are the down payment amounts as an investor.

1 unit = 15%

2 unit = 25%

3-4 unit = 25%

Above 4 units is considered commercial and would have even higher down payment requirements and a shorter loan term.

If moving is not worth it to you, then you should consider a HELOC on your primary residence. Run your numbers to see if the money from the investment will cover the new loan and the HELOC payments.