Los Angeles Member, Intro Post

[Brandon B.]

Hi Bigger Pockets Posse

Prior Coronado San Diego based Veteran & Father of two boys (one who is currently driving letters all over our stainless fridge) from Pomona CA. Nov 2017 my wife & I bought our first SFR for what we thought was an "OK" deal in a competitive market. At the time our eyes were set on a tri-plex in Leimert park, which we were priced out due to a bidding war as well as others. That led us to settle for a roof over our heads in Los Angeles before prices got any more out of hand. Hind sight I feel like we paid too much for the area & for something we aren't in love with.

As someone new to real estate I feel like I can do all the listening/reading & use all the calculators however, without real experience I can't be be fully confident in knowing what I have. Our SFR is a 900sqft City Terrace flip. 3 bdr 2 bath on (just shy of) 10k sqft near Cal State LA. Used my VA loan for 495k on a 30 year at 4.125

I come to you all for some guidance as to what would be the smart play in the situation I am in. Do I hold? Do I sell & buy elsewhere? Is it rentable? Was I robbed? All tips, ribbing are/is encouraged haha :) thanks for reading

Extra facts: I work in the Petroleum sect. Travel often to Martinez/Oakland CA, St. Louis MO, Detroit MI, Indianna, Houston TX (where I am currently) All of which I have been looking at homes.

Goals: Collab/Build my network, Buy 1st MFR + grow portfolio, Elevate my finances enough to quit my job, focus on my degree & start our family business.

Hobbies: Play with my boys, Motorcycles, Hike Palos Verdes, Skate around Venice, Snowboard, Run PCH etc

-Brandon Brown

[Dan H.]

The VA loan is a great benefit that you have earned.

There is no way anyone can accurately forecast whether you paid too much for your current RE.  Too many variables such as condition, exact location, etc.  But also I see nothing to gain by finding this out. 

However, I highly suspect that the purchase was not the best leverage of your VA loan benefit. My view is house hacking a multiplex (duplex to quad) would be achieve maximum benefit of your VA loan. Are you aware of the term house hacking?

I suggest starting with a detached duplex that is in great need of a rehab but still qualifies for the VA loan (the rehab provides the value add). Live in the unit most in need of a rehab and do a live in rehab. Hire out work that is beyond your skillset. Once that unit is rehabbed rent it for top of market price (it has just had a great rehab) and move into the other unit and repeat. Prior to moving out (while it is still owner occupied) refinance into a traditional loan (non-VA loan). Owner occupied loans allow higher LTV and have slightly better terms than investor loans. Ideally you can get virtually all of your investment out via the refinance of the rehabbed RE and have increased your equity.

You are now in a position to decide if you want to use the knowledge gained in your Buy Rent Rehab Refinance (BRRR) to do it again (repeat: BRRRR).

I realize this strategy likely requires selling your current RE.  It definitely requires moving.  You need to decide if it is the best strategy for you and your family.

Good luck