San Diego VA Loan House Hack and Live in Flip

[Doug Spence]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $965,000
Cash invested: $40,000

PITI: $4800
Rental income: $2200
~2400 sq ft

We bought this primary residence using my wife's VA loan entitlement. This home appealed to us because a portion of the bottom floor had been converted to a one-bedroom apartment with a full bathroom and a kitchen, which at the time was being rented out for $1350/month (well below market value).

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

We had been renting in Little Italy, and we were ready to 'settle down' and get a larger home in a suburban area to start our family.

The home also appealed to us because it had not been updated recently, so we knew we could also use the 'live in flip' strategy in addition to the house hack strategy.

We purchased this home in the summer of 2021, during an extremely hot seller's market.

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

This was on the MLS. We offered asking price due to the extremely hot seller's market at the time.

How did you finance this deal?

VA loan. 2.25% fixed for 30. We bought the rate down from 2.75.

How did you add value to the deal?

Since moving in, we have done the following work:
-Sand/refinish original hardwood floors
-Interior paint
-Completely renovated and upgraded the kitchen
-Completely renovated and upgraded the master bathroom
-Significant landscaping updates
-Converted stairwell to a walk-in pantry

We have done a lot of other smaller, mostly cosmetic projects but those are the major ones.

We raised the rent of the bottom floor unit from 1350 to 1950/month when we moved in, and its now at 2200/month.

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

Herb Knox was our agent and Cross Country Mortgage was our lender!