VA Loan Multifamily Los Angeles County

[Brandon Chen]

Hey Everyone!

I'm wondering if any veteran on BiggerPockets has ever utilized their VA loan to secure any multifamily property ( specifically here in Los Angeles County), i'm familiar with the process but just wondering if anyone has ever done it. Especially being in CA where it's so expensive.

Thanks!  

[Rick Albert]

I've helped a client buy a house with ADU using the VA loan. He bought it in 2020 and now rents it out completely and I helped him buy another primary.

The challenge will be finding MFU that are vacant. It's not impossible as I have had many clients do it. A house with ADU would be easier. The main downside is the loan limits for a house with ADU match a single family, not those of a duplex (which is higher).

[Dan H.]

Quote from @Rick Albert:

I've helped a client buy a house with ADU using the VA loan. He bought it in 2020 and now rents it out completely and I helped him buy another primary.

The challenge will be finding MFU that are vacant. It's not impossible as I have had many clients do it. A house with ADU would be easier. The main downside is the loan limits for a house with ADU match a single family, not those of a duplex (which is higher).

Rent control applies to MF where unit is older than 15 years old.  Rent control allows an owner moving into a unit as being legit cause for terminating tenant at lease end. 

It does not necessarily have to be vacant.   Tenant can be month to month or has lease coming to end of term shortly.   

It will cost a Month’s rent for a “no fault eviction” (terrible name but terminology used by ab1482) if unit is over 15 years old.   Some local jurisdictions have harsher rent control and it can cost more in those jurisdictions.

good luck

[Rick Albert]

Quote from @Dan H.:

Quote from @Rick Albert:

I've helped a client buy a house with ADU using the VA loan. He bought it in 2020 and now rents it out completely and I helped him buy another primary.

The challenge will be finding MFU that are vacant. It's not impossible as I have had many clients do it. A house with ADU would be easier. The main downside is the loan limits for a house with ADU match a single family, not those of a duplex (which is higher).

Rent control applies to MF where unit is older than 15 years old.  Rent control allows an owner moving into a unit as being legit cause for terminating tenant at lease end. 

It does not necessarily have to be vacant.   Tenant can be month to month or has lease coming to end of term shortly.   

It will cost a Month’s rent for a “no fault eviction” (terrible name but terminology used by ab1482) if unit is over 15 years old.   Some local jurisdictions have harsher rent control and it can cost more in those jurisdictions.

good luck

If it is in the city of Los Angeles, most MFU are subject to rent control. If there is a house with a detached ADU, if the main house was built prior to 1978, it is subject to rent control.

A buyer can attempt the Ellis Act, which could take months (owner occupied loans generally require the borrower to move in within 60 days) and cost $20,000+. It depends on the tenant's situation. It isn't easy. It's complicated and poses more risk. Especially if the tenant claims harassment. That's why I don't generally recommend it.

[Brandon Chen]

Quote from @Rick Albert:

I've helped a client buy a house with ADU using the VA loan. He bought it in 2020 and now rents it out completely and I helped him buy another primary.

The challenge will be finding MFU that are vacant. It's not impossible as I have had many clients do it. A house with ADU would be easier. The main downside is the loan limits for a house with ADU match a single family, not those of a duplex (which is higher).

 Hey Rick,

Mind if I get your contact info? Getting very serious about exploring this option here in LA. Thanks man