Financing My First Deal and More After

[Anthony Catoni]

Hi Everyone,

I am a new investor looking to make my first two purchases within the next year. I have 15k saved up now and I also have access to the VA loan. My wife and I are looking to invest in the Columbia, SC area as that's where we are stationed. We will be moving in October of 2021 on military orders (possibly overseas). I have spent the past 9 months or so educating myself on real estate and learning the rope and am now ready to take action. One of the properties will be purchased using the VA loan (hoping to land a multi-family). The other property is where I need some advice/help from those that have done it before.

I made a list of potential financing options for the second home (please add more if I'm missing something). We will be debt-free next month and have great credit scores. 

Here's the list:

• HELOC (not eligible, do not have a home with equity)
• Conventional Loan (would be tough to hit 20% down with 15k saved, still could do with PMI)
• VA Loan (ineligible if used with home 1, could refi out to conventional to make available)
• FHA Loan and 203k (3.5% down with PMI, occupancy requirement)
• Personal Line of Credit (credit unions I've called will lend up to $30k, but interest 12-18% depending on credit)
• Hard Money (short-term, down payment needed and interest will be high)
• Private funding (family and friends)
• Partnership

My options (in order of preference):

1. BRRRR SFH or multi-family
2. Buy a SFH or multi-family needing little to no work
3. Wait to build up more cash

I'd like to BRRRR the second property if possible, but I am finding interest rates to get short-term cash with no experience is killer, not to mention needing a significant down payment. In the refi stage, I'd like to cash-out refinance to get my money out and be able to do it again, possibly before we leave for our next location, but the seasoning period could be fatal with interest. How do you use short-term cash to fund these deals and factor in the holding costs? I'm guessing I haven't found the right lender(s) yet?

I can see how just getting started will you give you momentum, even with financing deals (cash-flow can be saved, HELOC will become available, experience, etc.).

Any and all advice on navigating through this would be great. It's not that I can't make this work, just need to figure out how.

Thanks,

[David Pere]

@Anthony Catoni My plan would be use the VA loan to house hack, put every penny of the money you're saving on living expenses and stash it in your investment fund, plus what you were already saving there. Six months down the road you should have a solid chunk of cash set aside, which will make all of your investment options easier!