VA Loan on SFH or Conventional on a Duplex?

[Joan S.]

Hello All,

I was pleasantly surprised to find out that I got pre-approved for a VA loan. I love this loan because it basically means I don't have to put absolutely zero money down, no down-payment, no PMI and no funding fee. Unfortunately, with market being so hot most sellers aren't accepting the VA loan since it entails high inspection standards and it takes longer to close. That being said, there aren't many houses on the market once non-VA loan houses are filtered out. So this led me to get pre-approved for a conventional loan. I figured if I'm going to get a conventional loan why not get a duplex? So I found one that I liked but it has 1 tenant that is in there until 2022 paying below market rent and then the other tenant's lease expires in November so I would removing them and moving into that side.

Ultimately, I do want to have this as an investment so I would most likely house hack if I got the SFH to get some cashflow or Airbnb the rooms. Or I can put down 5-15% as a downpayment and get the duplex. What's the best way to go? Thoughts, advice?

SFH Pros:

1. -Great "free" leverage
2. -Less risk
3. -Househack (rent out or airbnb rooms)

Cons:

1. -Can't completely rent it out because it has to be owner-occupied
2. -Slow cashflow/return

Duplex Pros:

1. -True investment property
2. -Can force appreciation by updating interior

Cons:

1. -Tenant recently signed a 2 year lease until mid-2022 that is below market rent
2. -Old home, it has good bones but general contracting labor is expensive since they are in high-demand

Thank you in advance!