Deal analysis for VA loan house hack

Real Estate Deal Analysis & Advice
6yFollow

Deal analysis for VA loan house hack

David Cha
Member since 2020 · 11 posts · 4 votes

Hey all, 

Question about using the VA loan to house hack. This will be my first purchase and i've just been watching as many youtube vids as possible and formulating a strategy. My plan is to purchase a duplex very close to where I work in Philadelphia and live in one unit while renting out the others. I plan on putting down zero with the VA loan and living in the unit for at least 5 years. I'm having some trouble figuring out if this is a good deal using the four square method because I will be living there for a few years and during that time, my plan is to save up as much cash as possible and either do a cash-in refinance for more cash flow or buy another property to live in and rent out my unit. Does this sound like a good idea? Any advice would really be appreciated.

Here is are examples of properties I was considering. How would you analyze the cash flow? What strategy would you use after living there for 5 years? How do you account for appreciation in the analysis?



https://www.redfin.com/PA/Philadelphia/779-N-27th-St-19130/home/38388201



https://www.redfin.com/PA/Philadelphia/5102-Larchwood-Ave-19143/home/85646781

1Reply
23 views

Most Popular Reply

Nicky Lisewski
Rental Property Investor · Philadelphia, PA · Member since 2019 · 55 posts · 28 votes
6y

Its hard to give specific advice without the calculations, but if your numbers work, it sounds like you have some good options.  I looked at 40 properties easily before I bought one.  I'd advise you to do the same, and run the numbers on everything you see.  You want be be confident and ready to go when you see a good option.  

1Reply
See this reply in the discussion

4 Replies

Jump to latestLatest
  • Nicky Lisewski
    Rental Property Investor · Philadelphia, PA · Member since 2019 · 55 posts · 28 votes
    6y

    @David Cha

    House hacking is how I started with real estate. Particularly as you qualify for a VA loan, its a great way to get started. As a first step, I'd run the numbers with the property fully rented. You could use the BP calculators. You want to know it cash flows after you move out.

    I also have an Excel file that allows me to consider what my living expenses would be when living in the property.

    Personaly, I'd also consider getting roommates while living there, and I'd also look into properties in adjacent areas to get the benefit of neighborhood improvement.

    Finally, appreciation is the cherry on top, but I would not count on it.

    0Reply
  • David Cha
    OP
    Member since 2020 · 11 posts · 4 votes
    6y
    Originally posted by @Nicky Lisewski:

    @David Cha

    House hacking is how I started with real estate. Particularly as you qualify for a VA loan, its a great way to get started. As a first step, I'd run the numbers with the property fully rented. You could use the BP calculators. You want to know it cash flows after you move out.

    I also have an Excel file that allows me to consider what my living expenses would be when living in the property.

    Personaly, I'd also consider getting roommates while living there, and I'd also look into properties in adjacent areas to get the benefit of neighborhood improvement.

    Finally, appreciation is the cherry on top, but I would not count on it.

    Hey Nicky, thanks for the response. I've been running some numbers with units fully rented and it would either be breaking even or i would end up paying a bit because of the 0 downpayment. I"m anxious to move soon and get into a property and feel like by house hacking, I can save up between between 60-90k in 5 years after taking into account vacancy, cap/ex, repairs and misc. Then, use that money to do a cash-refinance so the property will cashflow. What do you think?

    0Reply
  • Nicky Lisewski
    Rental Property Investor · Philadelphia, PA · Member since 2019 · 55 posts · 28 votes
    6y

    Its hard to give specific advice without the calculations, but if your numbers work, it sounds like you have some good options.  I looked at 40 properties easily before I bought one.  I'd advise you to do the same, and run the numbers on everything you see.  You want be be confident and ready to go when you see a good option.  

    1Reply
  • Mary Grill
    Professional · Philadelphia, PA · Member since 2015 · 12 posts · 3 votes
    6y

    @David Cha

    I live in the area and I've been in the first property. The pics are of the 2nd floor unit and only show parts of it.  The 1st floor unit is a bit of a mess and needs a lot of work, as does the property (it looked better from the outside and in photos!)  It has potential, probably not getting market rents right now, though at this price with the needed work the numbers aren't good. 

    If you wish to spend that kind of money in Philly you would be better off looking at something like new construction in the Brewerytown or Francisville area. Unless you want a true fixer upper then look for something in Brewerytown you could renovate.

    Your plan is solid, it's just the numbers need to fit with it. I agree with @Nicky Lisewski that you will have to look at a few properties before the numbers work for you. 

    @David Chaundefined

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free