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Updated about 3 years ago, 11/08/2021
Beginning of Property Rental
Hello, I will soon be rotating out of the navy, my interest is in purchasing and renting, what would pointers/tips someone can advice to someone starting out.
Thank you.
@Rayan Perez First thank you for your service! My recommendation would be to use that VA loan you earned and try and find a Multi-Family to house hack (live in one unit and rent out the rest). You can always post on here and look for a good agent and loan officer in the area you are looking. I am working with a Marine right now looking to do the same thing in my area.
#3 Managing Your Property Contributor
Do you already own a home? If not, you could look for a duplex that will let you live in one half and rent out the other half. You can also buy with a lower down payment.
Decide what you want to do. Do you want something that is pretty much turn key (might need a coat of paint) or something that needs major renos? Finding a place that is slightly dated or needs a bit of work (not talking about blowing out walls) often means the purchase price is lower and you can update it yourself adding equity. If you do renos, keep in mind it is a rental. Don't go high end finishes, keep it neutral to appeal to more people and get durable finishes.
Find out how much you can borrow (don't max yourself out), get your finances in order (look at your debt).
@Sam Horton Thank you for the feedback, I am planning on using my VA loan, I am blessed to receive extra benefits from the armed forces, will I need an LLC or do continue without, should I acquire a real state license or not? Thank you.
@Rayan Perez The VA would likely not allow you to put the loan in an LLC. I would verify with your lender of course. If you plan on becoming an agent, then I would get your license. If this is just to buy your first property, I would work with a professional in your area so you get a good understanding of the process. If you enjoy the process then by all means pursue that license.
@Rayan Perez You should not start an LLC to purchase a house hack with your VA loan. The VA will not lend to an LLC.
What makes you want to be a real estate agent?
#1 House Hacking Contributor
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#1 House Hacking Contributor
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@Rayan Perez The house hack ROI is pretty sweet and a great way to get started.
- Ryan Thomson
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@Doug Spence I would like to grow my passive income, also I'd always like to own real state. currently, I know nothing and would like to get started ASAP, the LLC question is for asset protection.
@Theresa Harris thank you for the feedback, I am currently house hacking, but the property is not mine. I rent out two rooms $500/room, leaving me with $300, my goal is to purchase a duplex or bigger depending on what is available. Rent and house hack as swell. How long would I have to live in that property until I can invest into another one?
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#1 House Hacking Contributor
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@Rayan Perez Definitely use that VA loan! You earned it. Look into house hacking. Renting rooms or finding a place with a separate unit that already exists or could easily be created is a great way to earn extra cash flow and live for free.
If you do want to get another house in the next year, you could refinance your VA loan into a conventional loan and than reuse your VA loan again. If scaling is on your radar, then thinking through exit plans is very important as it sounds like you may want to scale and move to the next property in a year. Bedroom rentals are a little more work to manage but are a great exit plan. You could buy near a college area and rent to student groups. Other criteria I look for in a SFH house hack: an easy way to split into multiple units, a walk out basement, an ADU, a garage I could convert, or lots of bedrooms.
- Ryan Thomson
- [email protected]
- (719) 624-3472
@Ryan Thomson thanks for the pointers! Those are phenomenal.
#3 Managing Your Property Contributor
Originally posted by @Rayan Perez:
@Theresa Harris thank you for the feedback, I am currently house hacking, but the property is not mine. I rent out two rooms $500/room, leaving me with $300, my goal is to purchase a duplex or bigger depending on what is available. Rent and house hack as swell. How long would I have to live in that property until I can invest into another one?
I would say at least one year, but if you did this every year for a few years, the bank might ask questions. So to be safe, go with 1-2 years. You will hit a limit on how much you can borrow and your down payment.
By leaving you with $300, I'm assuming that isn't all that is left of your paycheque rather you are renting a whole house for $1300 and rent out two of the rooms for $500 each and you pay the other $300.
@Rayan Perez chill out and make $..
You're not at the point yet where you need to worry about forming an LLC. I wouldn't even consider that strategy of asset protection until you're buying dedicated investment properties, not a property you plan to live in.
Good luck and let me know if I can help in any way!
@Doug Spence thank you, that’s a great pointer.