Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
New Member Introductions
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 4 years ago,

User Stats

3
Posts
2
Votes
Adam Munekata
  • New to Real Estate
  • Cambridge, MA
2
Votes |
3
Posts

Cambridge/Boston RE and the VA Loan

Adam Munekata
  • New to Real Estate
  • Cambridge, MA
Posted

Hello All! First timer here, I'm 22 years old and have a BS in Aeronautical Engineering--I'm really out of my league here.  I'm currently serving as a Second Lieutenant in the USAF. My current assignment is Grad School at MIT and I'm living in the Cambridge area.

I'm looking for some guidance regarding any investors in the Boston Metro area. SFR housing prices are extremely steep (especially for a first time home buyer), and I'm looking at a first time purchase anywhere between 400-800k. However because I am serving I have access to the VA loan, which qualifies me for a 2.5% APY with zero down.

However when I'm looking at homes in the area, it seems extremely difficult to find a good deal. Cap rates are relatively low ~<6%, and the equivalent cash flow for the properties I've looked at would only return ~100-300 for a month. And for everything I've heard from BiggerPockets, this low of a return for a 400-800k property is extremely low and seems to be not worth the pursuit. With this in mind, the cash on cash ROI is practically infinite because of the zero down payment, so a large part of me feels like I cannot pass up this opportunity.

The other variable involved is the owner-occupancy rates applied for a VA loan. To qualify for a VA loan, I must legally reside in the residence for 12 months; which is not an issue because my grad school program is 2 years. However, this limits the places I can invest in, since I need to be in a reasonable distance from MIT and Northeastern University (where my roommate is attending).

Being a naive first time home-buyer, I accidentally prequalified for the VA loan which I was unaware has an expiration (and I thought the credit hit would occur later after I've filed more paperwork). So I'd like to confidentially close on a property before the expiration of the prequalification, so I'm really working hard to do my due diligence and assure that I'm making an educated decision (hence why I'm here).

Looking for any guidance on the area, or just expensive areas in general and the logistics behind buy and hold rental properties in this highly inflated market. Also looking for guidance on how to negotiate prices down and if that's a possibility (I'm reading Trump's Art of the Deal and I'm not convinced that his way of negotiations is the best for SFR's), general guidance for using the VA loan (is it possible to refinance the VA loan with a conventional bank to use for another property down the line?), and any other indicators I can use to see the good deals in these markets (I've yet to see any properties that meet BP's 2%, and 50% rules of thumb).

I've been reading a lot into the housing bubble, potential crash, and problems with landlords and forbearance's that are making the housing market hard to deal with at the moment.  

Looking forward to hearing and connecting with you guys and being a part of this community! 

Loading replies...