VA Assumption / Substitute of Eligibilty

[Rob Ringlehan]

Hello BP Nation, 

I am working on completing my first deal and I am looking for some advice/opinions/knowledge on VA Assumptions. On to the Deal.

My neighbor is a recently retired vet and has taken a job in Missouri while his wife and kids had to stay behind until their house sold. They have had the property listed for three months with many showings but no offers and are getting impatient/motivated to get rid of it regardless of not making any money. The house is a Turn Key 4/2 SFR 1750 sq ft in the nicest HOA in the area which is growing. The property was built and purchased in 2011 for 185k. The mortgage is at 170k @4% APR and comparable properties are selling around 205-215k. Avg rents are between 1700/mn-1850/mn.

My plan was to assume their Loan, rent out my current residence (which would cash flow $380/mn) and move into theirs (due to the VA Loan) and then do a cash-out refinance, reinvest, and eventually turn that property into as rental. There is a 10k CDD for the neighborhood that I would assume as well and .5 VA Processing fee on the loan ($8500). There is not as much room in the deal as I originally thought due to the funding fee but I feel like its a good way to have two future rentals in a great area and possible 20-30k cash out to buy the next BRRR. Any thoughts? Has anyone done a VA Assumption before?

Thanks, 

Rob