Magic Formula w/ VA loan

[Brad Spencer]

Hello, BP. I first wanted to say thank to so many of you for the insight over the years that I've been listening and reading your input. This is my long overdue first post and it's based on a strategy that is a mixed bag from many of the strategies I've read on BP. As a veteran, I have access to the VA insured home loan for up to a 4-unit. My question is has anyone had any success with the BRRR method while using the VA loan. I'm aware of the higher standards an appraiser gives to sign off on the loan. But I am a curious if anyone has: 1) bought a property under market value 2) forced appreciation through some cosmetic improvements and other methods 3) refinanced out of the va loan into a conventional loan (using the equity from the refinance as a down payment) 4) repeated the process using the VA loan It seems to me that this method may be a way for veterans to get the ball rolling. Thoughts?

[Kalyanii K.]

Hi! So just wanted to let you know that it is possible, just depends on the lender you go with! I used 

@Upen Patel who is awesome and made the whole process very easy. I closed in less than 45 days, in about 30 days if I remember correctly and the house I got is a fixer upper. Normally, VA loans have a reputation of taking FOREVER to close, but if you have the right lender, it will go much quicker because VA loan documents that are needed are different than conventional loans, so lenders who aren't familiar with VA loans don't give you the paperwork you need initially, then have to scramble to find out what they need. My realtor said that this was the fastest close he has seen for a VA loan. Again, if you really want it to be efficient, go with Upen Patel. I met him on BP. Can't recommend him enough!!

I am forcing appreciation currently with upgrades to bathroom, kitchen and old fixtures so it is possible.  

The property I bought was on the MLS in a hot market so it wasn't under market value, but will be worth more with forced appreciation. Again, my property was very dated but had good bones structurally. It also smelled bad and with pretty bad bathrooms, which is why it even stayed on this hotter market for this long.

You can refinance out of va to conventional after 1 year and can repeat the process!   Literally cost me $2500 initially to go toward closing costs, then had about $400 refunded to me at time of close.  It can work if you buy right and run your numbers :  )

I had one of the guys I worked with do that while he was in the service-use VA loan to purchase a home, refinance when he switched duty stations to conventional, then used his VA loan again. I don't think he had a name for it, but this is, as you said an awesome way for veterans to get the ball rolling! Much luck to you in all your endeavors!