My second house hack (and 2nd VA loan)

[Anthony Torri]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $220,000
Cash invested: $10,000

2nd home that was also a triplex. Every time I move, I don't just go for the most comfortable home I can afford at that time. My goal is to look for a suitable home that will also financially benefit me greatly for the rest of my life.

House hacking helps in the present by minimizing your living expenses thanks to the rental income. Now, use the money being saved to build up for a down payment for your next property.

I recommend to anyone 2 different paths when purchasing a primary residence. The snowball method or the portfolio method.

The snowball is buying the worst house in a great area. Most likely going to be single family and not generate rental income, but should appreciate at a greater rate than a small multi in lower grade neighborhood. Live there for 2 years, sell with any capital gains being tax free (first $250k if single, $500k if married), then repeat the process in a higher value area.

Does not have to be a fixer upper, but that would give the best return. This would be riskier and take longer. If you have time and are comfortable, look into a FHA Rehab/203k loan. You only have to put %3.5 down and the bank will pay the contractor directly for their work. The rehab costs will be added to the principle of the loan used for the purchase.

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

MLS. Used the home inspection report to have the seller make some repairs before closing.

How did you finance this deal?

VA loan.

How did you add value to the deal?

Renovated the units. Added a dishwasher and washer/dryer hook ups to the 3rd floor.

Lessons learned? Challenges?

Finding a lender that knew a 2nd VA loan was even possible. After many phone calls, USAA ended up knowing what to do and helped me out.

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

Agent