Starting BRRR in SoCal with the VA Loan

[Joseph Gibbs]

Hi all,

Does anyone have any experience/advice on using the VA Loan as a starting point for real estate investing, specifically to begin BRRRRing? I live in San Diego and am looking for my entry point into real estate.

Thanks!

[Vincent A. Cipollone]

Joseph, here are some rapid-fire things you should know about the VA Loan:

- You must INTEND to live in the property and occupy the property within 60 days. However, there are ways to get around this legally, such as PCS orders, a growing family, among various other ways.
- All major systems (electrical, plumbing, HVAC, etc...) must be operational and the property be habitable. This means no holes in the roof or other things that make BRRRR a really good move.
- You must have enough VA entitlement. This is a weird calculation done by the VA and you could obtain a certificate of entitlement that shows how much you've used, if any. However, with COVID-19 causing issues, I haven't been able to obtain mine and certain loan limits have been waived. Anyway, for illustration's sake, I bought a townhome in the Jacksonville, FL area for $137k and with the funding fee, it came out to a $140k loan. That used $36k of my entitlement. It's not quite as cut and dry as that, but since San Diego is a HCOL area, it gets supplemental entitlement.
- You can re-use your VA entitlement. The best way to do this is to refinance your loan to a conventional loan after obtaining 20% equity. This frees up your VA entitlement for future use and locks in a 30-year owner-occupied fixed rate for your rental property once you move out and do it again!

I am by no means an authority on the VA Loan but I have used it before. It can be kind of complicated to understand but like JFK said (paraphrasing) "we don't do things because they are easy, we do them because they are hard." The hard thing are worth doing because nobody else wants to do them and that makes them lucrative!

Also, @Connor Nellans is killing it  and helped me a bunch with investing in SD (I'm likely PCS-ing there in July 2021) and I am working with @Kenneth Donaghy to help me find a MFH house-hack. Let me know how else I can help!