Military Veteran financing options

[Joshua Lyon]

Hello fellow BP members, I currently own a single family home in Colorado Springs that's been a great rental the last couple of years. I bought it using the VA loan and put very little down on it. I lived there long enough to satisfy the VA requirements and moved out about two years ago. It's valued around 265k and I owe 229k. I'm getting $1550/month with the mortgage at $1250, 30 year fixed and 3.5% interest. I'm using property managers that take 10% so my cash flow is about $175. Currently I live in a small townhouse in Orlando that my parent in laws own outright. It's a temporary situation due to family reasons but my wife and I want to move out into a bigger house in a year or so. I want to take advantage of not having a mortgage at our primary residence and get into more investment properties. I'd like to flip a house in Orlando giving us more cash to continue to flip/buy and hold but also give us a better down payment on a primary residence. We have about 10k available to invest with a credit score above 800. Does anyone have any experience with using the Military Choice loan from Navy Federal? I have the VA loan tied up in my first house. I don't have enough down payment for 20-25% for a Conventional mortgage. Any other ideas to make an efficient investment with my current situation? Thank you!

[Abraham Saldana]

@Joshua Lyon

For investment properties, there really is no going around the 20-25% down. The VA does not fund investment properties, only primary residences. The same is true with all other commercial lenders. Your best bet given your situation is to probably do the following if you want to build your portfolio with low/no down:

1.  Move into another house and utilize your remaining VA entitlement.  Stay for 1 year.

2. Move into another property, but utilize a conventional loan (you can go as little as 5% down). However you must realize that you will be paying PMI on top of your mortgage.

3.  Rinse and repeat every year.  I didnt really start to notice the cash flow until I was on my 5th house.  By then, every house after you really start to snowball.  It is a slow process, but one that does not tie up all your income/equity into one property and can build long lasting wealth.   Hope this helps and best of luck from a former O-Town member!