House-Hacking with the VA Loan to kickoff investing career

[Matt Heerwald]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $250,000
Cash invested: $12,000

We purchased a bungalow on a large lot with the VA Loan and fixed it up while living there. We rented the property and broke even and used the VA Loan to buy our next house hack. We then sold the right to build on the large side of the lot for $316K! Our little 780sf house appraised for just as much after the sale as before and we have been able to pull an additional $160K out of it to fund other projects. The house is cashflow neutral and under management. The most recent appraisal was $690K.

What made you interested in investing in this type of deal?

I had the ability to buy a house with the VA loan and this was the top of my price range as a rookie firefighter, but right in the path of progress. I knew I could fix it up myself while I lived in it.

How did you find this deal and how did you negotiate it?

My uncle lived in it and it was badly neglected/gross. I ordered an appraisal and we settled on the appraised value, less 6% agent fees. Ge had owned it since 1999 and it had gone from $109K to $250K in 14 years. He bought a house cash in San Antonio with the profit.

How did you finance this deal?

VA Loan! I think I walked away from the closing table with $1,200 in my pocket. I had a great lender that I still use today, Joe Kralik.

How did you add value to the deal?

Cleaned, painted, knocked down a wall, sanded floors and gave it a cool, funky vibe to go with it's 1940's charm. Then we sold the right to build 3,300sf on that lot which resulted in us only paying 24% of the taxes on the property, saving us several thousand every year.

What was the outcome?

We refinanced $160K out of it last year to fund a BRRRR up in Fort Worth and to fund our MF pursuits in out of state markets.

Lessons learned? Challenges?

When luck comes your way, embrace it! don't be afraid to take the leap and learn. Do your due diligence, but have enough confidence to pull the trigger and you will continue to improve. This is a very forgiving industry!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Anthony Gibson
Joe Kralik