4-plex purchased with a 2nd time VA loan while also keeping my 1st home purchased with VA loan. $1,000 in cash invested was for termite inspection, some hardware needed in common areas, and cleaning supplies as 3/4 units were already occupied. 4th unit I will be moving into once I finish cleaning the apartment, but all it needs is a good cleaning and no rehab to be move-in ready. Once my required year is up I will fully rent out the 4th unit and should cash flow well over $1,000/month

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

Because I am a veteran, I knew that I wanted to maximize my VA loan benefit. The best way in my opinion is to do that by house hacking a 4-unit apartment building.

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

Found on MLS. It initially was sale pending before I could even get to view it, but thankfully that financing fell through for the buyer. My realtor let me know it was available and had passed inspections already. Because we knew it passed inspection, we were offering at $207k, which was $8k above ask price, but they had a lot of interest and offers at $215k+. Contingencies we asked for were only lease review to get us in a more favorable position than the other offers.

How did you finance this deal?

I financed this deal through the VA. I already owned a home that was bought with VA financing, but after doing a lot of research found that since i only used $150k of my $453k entitlements, I could actually purchase again as I had already lived at the first home for over a year. In order to make this work, I had to line up someone to rent the first home for market value and sign a 12-month lease, show my finances could support both mortgages for up to 6 months, and prove my VA eligibility.

How did you add value to the deal?

Have not done value-add yet, but as tenants move out I intend to rehab the units 1 by 1 in order to increase rents. Additionally, after 1st year has passed and have saved up additional reserves, all new windows and siding will be installed.

What was the outcome?

I was able to do a 30-day close and get all financing approved with the VA. Inherited 3 tenants to make the property have positive cash flow from day 1 of ownership.

Lessons learned? Challenges?

One of the biggest lessons learned was that I should have better prepared my finances before underwritting. We had some roadblocks in terms of being able to show enough liquid assets to support 6 months of funds for the 4-plex, and 3 months of funds for my first house. I also had multiple bank accounts that made things even more complicated. In the future, and for next time, I intend to consolidate at least my banks, if not my other investments as well.

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

I worked with Denise Tiedeman from Graf Home Selling Team out of Cedar Rapids, IA and she was my agent for both of my homes.
I also worked with Kathy Hence from Academy Mortgage for the financing.