Seeking Feedback: Use VA Loan to buy quadplex in SF?

[Jon Li]

Hi, I'm relatively new to REI and am considering purchasing a quadplex in SF which I would occupy. It isn't cash flowing, but I wonder if it's a good opportunity given that:

1)  I'm paying $2600 rent each month anyway

2) I could use my VA loan for a 0 down payment purchase of a ~$1.25M quadplex in SF

3) Area is up-and coming w/ new Whole Foods, etc; chance for appreciation

4) Long-term tenants in high demand area, no concern of vacancy

5) The units are below-market rent (could likely increase at least $1500 total)

Would greatly appreciate any feedback (please note, numbers below are approximate). I wonder if I should factor in mortgage interest tax deduction as well though perhaps too small to matter. Another part of me thinks I should wait a bit and continue renting until the market cools down to use my VA loan, though who knows when that will be...

PURCHASE PRICE	1250000
MONTHLY RENT
4 Units Total	5500
MONTHLY EXPENSES
Mortgage	5526
Insurance	1000
Taxes	900
Repairs	950
Monthly Total	8376