VA Fix and Flip Strategy - Low Cost Flip

[Joshua Manning]

Hey BiggerPockets,

I've recently decided to go to enlist in the National Guard for various reasons and become a weekend warrior. Afterwards I will be a veteran and eligible for a VA loan with 0 down. When I realized this I started getting an idea for a new Investment Strategy that if done correctly will allow me to use almost none of my own money to rehab a property.

The first step would be to get pre-approved from a VA Loan with 0 money down following the rules and regulations with that. I should have no trouble getting pre-approved after I join the guard since I will have money saved up from Basic and AIT as well as my $20K enlistment bonus that I have been offered by the Guard, I will be in a very good position financially. But the bottom line is that the Bank will pay for the House.

Now for the cost of the rehab, I have been talking with many friends/family who have money saved up I have walked them through my business plan and strategy for house flipping. They believe I have a sound strategy, and as a Finance Major graduate I think they would be open to investing with me. (I know the whole saying of don't use family's money etc. etc. but you have to start somewhere) But anyways the bottom line here is that I would use outside investors to loan me the money for the rehab at a higher rate of interest than the Bank to be paid back when the property sells.

So if all goes according to plan I will have financed the entire project at virtually no cost to me. I will still be responsible for paying for Holding Costs, and Closing Costs and any loan or Bank fees but the bigger costs like the down payment and rehab will already be taken care of. 

So what do you guys thoughts could something like work? I don't know much about VA loans except that they are 0 money down so there might be something I'm missing here.