House Hacking with the VA Loan

[James O. Coker II]

Hi All,

I am a newbie to BiggerPockets and am interested in using my VA loan (and/or VA renovation loan) to do a house hack in Miami in late 2022. I am writing to ask for advice from those in the forum who have done this. To be more specific, I am retired military, currently work for the State Department, and think I will get orders to Miami for mid 2023. I want to use the loan to hopefully renovate a two to four unit property that I can Air BnB, as well as live in to reduce my personal mortgage payment.

These are the types of things I am asking for advice about:

1. For those of you who have used a VA renovation loan (or regular VA loan) for a house hack investment property - how hard was that process?

2. How did you determine your rent income/occupancy rate? Is there a rule of thumb like the 2% rule in rentals for Air BnB that can help you determine what your cash flow should look like in a given area through Air BnB? Did you estimate low?

3. How suggested is it to get a realtor's license for the first investment purchase?

4. For those using Air BnB - did you use a management company? If so, are there specific things you screen for when deciding on whom to go with.

5. Are there any trainings, books, podcasts, et al you would recommend to prepare for this type of purchase?

6. Please share any specific stories you have about using the VA loan to house hack, and anything you thought you did well or could have done better.

7. Lastly, for those in Miami, are there areas you would recommend to buy in, and conversely areas to avoid, for this type of investment.

Best,

Jim

[Jordan Garcia]

Hey Jim, 

I'm a fellow veteran and VA house hacker myself in the St Pete market so I'll do my best to answer your questions!

1. For those of you who have used a VA renovation loan (or regular VA loan) for a house hack investment property - how hard was that process? I bought a turn key 2 unit with a regular VA loan and with an awesome realtor and lender this process was very easy assuming you've already received your Certificate of Eligibility. 

2. How did you determine your rent income/occupancy rate? Is there a rule of thumb like the 2% rule in rentals for Air BnB that can help you determine what your cash flow should look like in a given area through Air BnB? Did you estimate low? I purchased this property back in 2018 and it has been an Airbnb ever since then with the exception of a couple months during the start and peak of COVID. I also manage a couple other Airbnb's for investors and I typically run numbers based on a 75% occupancy which is conservative for my market. I factor in electricity, sewer, trash, Wifi, landscape maintenance, and any other expense not included in your PITI. 

3. How suggested is it to get a realtor's license for the first investment purchase? I think this would be based off of personal preference. My thought is it would be worth it if you plan on pursuing a career in real estate rather than a passive/part time investment. I used an established Realtor to help me with the process since I was new to town and it helped me learn about the market and meet people within the market as well.  

4. For those using Air BnB - did you use a management company? If so, are there specific things you screen for when deciding on whom to go with. I have self managed and if you are going to be living on the property I would say it would be a waste to have a property manager. 

5. Are there any trainings, books, podcasts, et al you would recommend to prepare for this type of purchase? Not specifically

6. Please share any specific stories you have about using the VA loan to house hack, and anything you thought you did well or could have done better.  The ROI is better than any other investment I've made. I make about $700-$1500 cash flow every month on my primary residence that I paid a little less than $4k to get into. I don't think there a better way to get started in REI.

7. Lastly, for those in Miami, are there areas you would recommend to buy in, and conversely areas to avoid, for this type of investment. I'm not in Miami so I wouldn't know but I hope I've been helpful! Good luck and reach out if you have any other questions.