New Member Introduction/First time home buyer

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New Member Introduction/First time home buyer

Manriki Gagnon
Member since 2021 · 1 post · 4 votes

Hello BP! This is my first post, however I have been lurking around for a while. I don't have any real estate properties (my school doesn't actually allow us to own property while we're here) however I've been doing a lot of research, reading books, and listening to as many BP podcasts as I can (450+ is a lot to catchup on). I've been researching different markets in Washington DC/Northern Virginia and determined that I want to invest in the Woodbridge, VA area.

I would like to stay under $300k, so I am looking for Townhouse style condos and small single family homes. I am preferably looking for a place with a basement because I want to house-hack and live in the basement while renting the top floors out to a tenant(s) to cover a majority, if not all the mortgage. I am okay with no cash flow in the first year while because I'm going to be living in part of the house, however after I move out I would like to be cash flowing.

I am planning on using a VA Loan to finance the purchase with no down payment, so the mortgage payment will be kind of expensive. Since I am a first time home-buyer, I am also planning on using the Virginia Housing grant to pay for part of the closing costs.

I have a few questions regarding my current plan. 

How hard is it to find a tenant that would be willing to rent out the top half of a property when I am house hacking the basement? What are people's experiences with renting out rooms to multiple tenants? Is it worth looking for duplexes or triplexes?

If I am breaking even for the first year of owning a rental property, would I be able to increase the rent on the current tenant to include the cost of the new opened area of the house, or would it be better to find a new tenant? I don't want this to come across as unethical, I would make sure the tenant understood what I am trying to do before they signed a rental agreement. 

Other than the no/low down payment and lack of PMI, are there any other benefits to the VA loan versus conventional loans? Are there any drawbacks?

Thanks for all the help, I am excited to be part of the BP community and start my real estate journey!

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Brian Beck
Flipper/Rehabber · Fredericksburg, VA · Member since 2018 · 96 posts · 58 votes
5y

Hi @Manriki Gagnon

I grew up in the Woodbridge area and still live nearby in Fredericksburg, but have lots of friends/family there, if you have any questions about any specific neighborhoods I'd be more than happy to help. I am not aware of any duplex/triplex style houses in Woodbridge, they are kind or a rarity in NoVa in general. At your price point you'll likely be looking in the Dale City (22193) or Rt 1 (22191) areas. These will generally have a few options at about the $300K mark, every now and again their is a neighborhood in Lake Ridge (22192) that will have a a sub-$300K option (expensive HOA though). Best of luck!!

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  • Joaquin Camarasa
    Real Estate Agent · Springfield VA · Member since 2018 · 480 posts · 400 votes
    5y

    Hi there Manriki!

    How hard is it to find a tenant that would be willing to rent out the top half of a property when I am house hacking the basement?

    You will usually be able to rent by the room or the whole place. It is a little uncommon to rent the top half of the house if that makes sense. 

    What are people's experiences with renting out rooms to multiple tenants? Is it worth looking for duplexes or triplexes?

    It is quite challenging in the area you are looking at.

    If I am breaking even for the first year of owning a rental property, would I be able to increase the rent on the current tenant to include the cost of the new opened area of the house, or would it be better to find a new tenant? 

    You will most likely have to find a new tenant as the current one was looking for a specific rent situation and when you change it, you will probably have to look for a new one.

    Other than the no/low down payment and lack of PMI, are there any other benefits to the VA loan versus conventional loans? Are there any drawbacks?

    Benefits, the ones you mentioned. Drawbacks, if the appraisal comes low, the VA loan automatically makes the seller lower the price to appraised value. If you are in a multiple offer situation the seller is most likely to go with a conventional loan for this reason. VA loans also have more regulations and inspections than conventional loans.

    Hope it helps

    1Reply
  • Brian Beck
    Flipper/Rehabber · Fredericksburg, VA · Member since 2018 · 96 posts · 58 votes
    5y

    Hi @Manriki Gagnon

    I grew up in the Woodbridge area and still live nearby in Fredericksburg, but have lots of friends/family there, if you have any questions about any specific neighborhoods I'd be more than happy to help. I am not aware of any duplex/triplex style houses in Woodbridge, they are kind or a rarity in NoVa in general. At your price point you'll likely be looking in the Dale City (22193) or Rt 1 (22191) areas. These will generally have a few options at about the $300K mark, every now and again their is a neighborhood in Lake Ridge (22192) that will have a a sub-$300K option (expensive HOA though). Best of luck!!

    4Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    5y
    Originally posted by @Manriki Gagnon:

    Hello BP! This is my first post, however I have been lurking around for a while. I don't have any real estate properties (my school doesn't actually allow us to own property while we're here) however I've been doing a lot of research, reading books, and listening to as many BP podcasts as I can (450+ is a lot to catchup on). I've been researching different markets in Washington DC/Northern Virginia and determined that I want to invest in the Woodbridge, VA area.

    I would like to stay under $300k, so I am looking for Townhouse style condos and small single family homes. I am preferably looking for a place with a basement because I want to house-hack and live in the basement while renting the top floors out to a tenant(s) to cover a majority, if not all the mortgage. I am okay with no cash flow in the first year while because I'm going to be living in part of the house, however after I move out I would like to be cash flowing.

    I am planning on using a VA Loan to finance the purchase with no down payment, so the mortgage payment will be kind of expensive. Since I am a first time home-buyer, I am also planning on using the Virginia Housing grant to pay for part of the closing costs.

    I have a few questions regarding my current plan. 

    How hard is it to find a tenant that would be willing to rent out the top half of a property when I am house hacking the basement? What are people's experiences with renting out rooms to multiple tenants? Is it worth looking for duplexes or triplexes?

    If I am breaking even for the first year of owning a rental property, would I be able to increase the rent on the current tenant to include the cost of the new opened area of the house, or would it be better to find a new tenant? I don't want this to come across as unethical, I would make sure the tenant understood what I am trying to do before they signed a rental agreement. 

    Other than the no/low down payment and lack of PMI, are there any other benefits to the VA loan versus conventional loans? Are there any drawbacks?

    Thanks for all the help, I am excited to be part of the BP community and start my real estate journey!

     You are in a good company Manriki!

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