First buy, 8acres of commercial land with 3 units.

[Lauren Reid]

Hello! 
I’m looking at almost 9acres of commercial/industrial (no additional residential allowed to be built) w/ 2 residential units on the land currently. 1 is an old Stone house renovated into a top and bottom duplex. The other is a single family home. I will be living in the bottom of the stone duplex. This is my first time buying a home or investment property so I’m not sure what all information is needed, but I have 2 main questions:  

1.) 

is it worth buying, sectioning off and reselling the addition lot/acreage? I have no use for it but the owner will not sell just the 3 residential units. The unit above me and the single family currently have tenants, and the cost of the mortgage is covered by their rent. I know nothing about commercial/industrial property, after re-sectioning, the residential units would sit on about 2 acres so I would be selling the remaining 6acres. Would it be worth that? I’m nervous about being stuck with the land.

2.)

I ran the numbers on BP rental property calc and it says I would have negative cash flow because I would live there. Would I include the money I would be paying as a tenant in the income portion of the calculator? Because there’s a huge difference in the numbers when I do add what I COULD charge for the unit I would be living in.

If I can sell the land for, would I take that money and pay down the loan or reinvest? 

Open to any and all suggestions and advice!! 

I'm also a veteran and qualify for the VA Loan with no money down.

[Doug Spence]

@Lauren Reid Welcome to Bigger Pockets! 

I can't help with your first question, but I have some thoughts on your second question. 

House hacking with your VA loan is an excellent way to get into real estate, and it's my favorite way for military folks (I'm still active duty) to build wealth in real estate. My wife and I just purchased a house hack using our VA loan here in San Diego last August.

The BP rental calculator is designed to help you run the numbers on a property that will be a dedicated rental property. It's not a 'house hack' calculator, so it won't be able to give you a reliable answer on if it's worth house hacking that property or not. In many situations, the revenue earned from the other rooms or units will NOT completely cover your mortgage payment and expenses, and that's ok. The whole point of the house hack is you're using rent collected from other units or rooms to help cover the mortgage, so if your effective housing payment is only $500/month after using your rent collection to pay the mortgage, that's still way better than having to cover the entire $2000 mortgage by yourself. 

One thing you could do with the rental calculator is input the numbers as if you were going to rent out the unit you plan to live in, in addition to the other units/rooms and see if the property has positive cash flow. That way you know that if you move out in a few years (the VA loan requires you to live there for one year) and rent out the unit you were living in, the property will have positive cash flow.

Are you already in comms with a VA lender in your area? If not, you should get on that ASAP. He or she will be able to help with a lot of your VA loan-specific questions.

Hopefully, that helps. Don't hesitate to reach out if you have more questions. Good luck!