My 1st Purchase in Orange County

[Felipe Salgado]

Hi everybody,

I'm in the process of buying my first property and I'm looking for some advice or a little help from the BiggerPockets family. 

I'm using my VA loan and I'm looking to use this as an investment but at the same time this would be my primary residence, for now at least. I'm looking for a 3 bedroom house/condo/apartment. My brother and I are moving and bringing a friend with us. They would pay rent of course and that'll allow me to save some money for my next investment. My thing is, I'm buying a house in Orange County and as many of you know, it's an expensive market. With using the VA loan and looking at my situation, with your experience or with your knowledge, what kind of property should I be looking for? what would be the best option for a smart investment?

Right now, I'm looking for a property that can allow me to do some rehab but with the VA loan it can't be anything too crazy. I know when buying property I shouldn't rely to gain value through appreciation. Would it be smart to buy something already in good condition that doesn't really need rehab or should I still look for properties with some rehab work in Orange County. I have about 10-15k to start so I don't have a ton of money but I do have some and I know it's more than enough to start.

I appreciate this site and everybody who helps others make their dreams a reality and I'm looking to be one of those people. Thank you BP!

[Kevin Phu]

@Felipe Salgado, look for properties that have things like outdated kitchen cabinets, outdated bathroom vanities, ugly flooring. These won't be major rehabs but will allow you to force some appreciation. I saw you mentioned a condo. I would recommend you really look into the pros and cons of buying an HOA property. I personally don't even give them a chance because I don't agree with allowing a random group of people who have 0% stake in my property tell me what I can and can't do with my property. They can also have "special assessments" and then you'll be required to throw up thousands of dollars. If you still want to consider an HOA property, check out BP podcast #244 with Linda Weygant. She owns a bunch of HOA properties but she also sits on the board of every HOA so she can control it to her advantage.

I just bought a house in Oxnard with my VA loan so I understand you when you say it's an expensive market. Meeting great numbers is going to be somewhat difficult as well since it's 0% down but you'll find something that will work.

As @Amanda Fallon recommended, also consider an FHA 203k loan. The strategy she outlined is a great one and is one that I am using. Buy a property with my 0% down VA loan and house hack it for a year then buy another property with a 3.5% down VA loan and house hack it again. The money you will save house hacking, depending on your income, will even open the doors for you to invest out of state. I am currently in Norfolk, Virginia on a work trip and researching the local market. Home values are so low that I could easily save up a 20% down payment for a property here within one year.

Good luck on your search!