Divorce - A Chance to Start Over Right?

Question

Once we sell our family home, my half of the proceeds should be about $300k. I have the chance to do this right with an investment mindset. Do I househack, BRRRR, Short term rental? I need a primary home for me and my child and dogs. I'm VA so I can take advantage of 0 down. I've always wanted a place in Big Bear. We're in North County San Diego so Vista, San Marcos, Oceanside for primary home. Do I buy as low as I can to afford mortgage with 0 down and use 300k for big bear or put a larger down on primary home. My income is $130k but will grow with new business opportunities in the coming years. I'd love to find a duplex but seems my income wouldn't support that. What scenarios do you see options for?

Jonathan Greene · Answer

Welcome to the site. You are in a great spot to re-start your journey, especially with the help of your VA benefits and service to your country. You can own more than one property with your VA benefits so you want to check your total allotment.

House hacking with a kid is always just a choice and dependent on the proximity of the other unit and more. If you are comfortable with it, it could work out great. San Diego and the surrounding areas are VERY ADU friendly so there are properties with options to add one in the back that are really starting to pop there and could be an alternative option.

Take it slow. Get through the divorce. Maybe get settled in a rental for a year for the stability while you look for the right home or investment.

Alecia Loveless · Answer

@Catherine Curtsinger To play a little devil’s advocate I have been house hacking for 30 years. I currently live in a duplex.  It is low key and low maintenance. I usually only see the tenant when she takes her dog outside on my Ring Doorbell.

I’ve been in this building for 5 years and have only had one real issue where a pipe burst due to -20 degree weather. I doubt that is much of an issue in California although if you invest in the mountains it might be something to be mindful of.

I personally think an ADU or duplex house hack would be much easier for getting started in real estate than a long distance STR.

I also think getting the divorce settled and possibly renting for a year would help you figure out exactly what you want to do (your preferred real estate strategy) and might help you save some extra money for that first purchase.

Catherine Curtsinger · Answer

Thank you for the advice! I forgot about the fact I can have two homes as long as it's under the VA limit. I'll keep that in mind!

Catherine Curtsinger · Answer

It's good to hear of a positive house hack experience! The renting idea might be the best to make sure I'm ready. Thank you for your advice

Catherine Curtsinger · Answer

Yes! Thank you!!

Henry Clark · Answer

Look for a value add property besides just ADU. 1.  Property where you can split and sell a lot.

2.  Look for the oldest worst property in a great neighborhood.  Fix it up.

Catherine Curtsinger · Answer

Thank you!

Seems like house hacking would be a little too stressful even if I found a place with an ADU already ready to go.

I don't have experience in rentals. I know the addage if you treat it like a hobby it will pay you like a hobby but if I have some extra cash maybe it's better spent on a 2nd home with the potential for income vs. just using that money in my primary home.

Maybe best best is to get a primary that will do well for BRRRR and save the cash

Brandon Foster · Answer

Hello, thanks for your service to the country. I am retired military and have used the VA for myself and helped others also use it on their real estate journey in the area. (It’s a great tool)

I am located in Oceanside/carlsbad area.Using the VA on two places has a lot of limitations with the cost of homes in this area it makes it near impossible however having a good VA loan officer is key for part of your team.

I am actually helping another client in a very similar situation. The prior post is very right. Make sure your life is settled and you are ready to jump into a house hack as that can be a large task to take on and burden to an already full life. House hacking would be the best option for this area though (almost only really viable option for investing without large cash reserves, unless you flipping).

Big Bear Airbnb strategy is speculative right now with most Airbnbs up there not preforming well at the present, unless you have a lot of experience. (I Have a client who I just helped get a spot up there and it’s very slow)

House hacking and then using BRRRR down the road, would probably be the best option right now depending on your situation and experience. You could house hack in duplex too.