Help with Strategy in Real Estate

[Dustin O.]

Hello BP,

This web site has been a great source of experience and education, which has broaden my perspective and abilities in Real-estate investing. The biggest tools I have take away from BP have been creativity, confidence, and knowledge. I have just completed my tour in Afghanistan and now have time to work towards future retirement goals.

I have stood at a distance from forum posting, as I have found that most of my questions can be found by using the search bar. Also I do not have the experience necessary to benefit newer investors. However I am an active reader and I provide younger wannabes a strong testimony of what this site has provided to my wealth.

My strategy:

As a buy and hold investor, I have been using my veteran benefits (VA) loans to acquire new construction SFH. And then allowing my allowance for housing to pay for the mortgage. I then place the house for rent, this is to meet the 24 month requirement to use a percentage of the rental as income and rebalancing my debt to income ratio. (VA loans must be owner occupied for 12 months), It takes 36 months for this step to mature and another 12 months to save six months of mortgage payments.

I then purchase another home at my next duty station and repeat the process. I have never put money down on a property and so far I have not paid a mortgage note in over 6 years. The reason for only purchasing new construction is to avoid putting money into the home while maximizing my long term hold strategy. (this may be a flawed outlook)

My Question:

Currently I am maxed out on the amount of VA loans allowed to be open at one time. For my strategy to continue to work I have to close out these loans. Can I refinance into a conventional or FHA loan? And if I can, will I have to put money down?

The property I plan on refinancing out of VA is valued at $160,000. I owe approximately $153,000 and it was purchased at $181,000. I plan on making a purchase in the next 24 months in Hawaii. Just closed on a new construction near the beach and would like to acquire a low cost, live-in, and flip.

Any input on my strategy would be greatly appreciated. I do not know how widely used this technique is used. However reading the forums and because of my limited income this has been a winning strategy for me so far. And I have unlimited VA uses as long as the loans are satisfied I maintain DTI and solid credit. No need for cash accept for the six month mortgage, which allows for a good night sleep and can be saved over time.