100% Disabled veteran looking to get into a 4+plex?

Question

Howdy everyone!

I am a 41 year old 100% service connected disabled US Navy veteran considered total and permanent.

Currently I am living on a sailboat that I own outright but am getting tired of trying to make ends meet on the 4k a month I get from the VA Pension I get every month.

What I have been considering is if I could get to the point where I own some rental properties I would be in a much better position financially and want to start with at a minimum a 4-plex. What got me started thinking along these lines is I was told that my boat does not qualify as a legal residence, and technically by the letter of the law I am homeless (albeit quite comfortable so please no pity here)

I am wondering what options are available to me in order to be able to make something like that happen? I have heard with an FHA first time home buyer I can finance a 4plex, and that there are some tricks to getting that done? Not sure if VA loans can qualify for what I want to do?

What I was looking at is using one of the units in the 4 plex as my primary residence, then renting out the other 3, then possibly getting a roommate for my unit as well as I would be spending most of my time on my boat. Or possibly even putting a large shed on the property and insulating it and wiring it up and using that as my unit.

I would be looking to do this in my home state of Montana. Preferably in either Butte, Billings or the Bozeman area or somewhere in between.

A couple of key points that are important to me is I will not put my boat up as collateral, and preferably would like to do this inside of a closed S corp or LLC to insulate from liability stemming from the property.

Any thoughts or advice you have to offer would be greatly appreciated as I am pretty lost at what to do here.

I should also mention I grew up working construction and have built several homes, I have just never been on the ownership side of things.

Thanks!

Ryan Thomson · Answer

@Nick Richards  Here are some resources I found really helpful on my journey:

1. For podcasts I really like the House Hacking episodes on Bigger Pockets Podcast and other channels. Here is a playlist with the best House Hacking Podcasts I’ve found: https://open.spotify.com/playlist/4A6uLsPfdWEMmJhG4TSjyb?si=743bb403548f47fb

2. Great beginners guide: https://www.biggerpockets.com/blog/wp-content/uploads/2022/08/Ultimate_Beginners_Guide_BiggerPockets.pdf

3. The Book on House Hacking Strategies by Bigger Pockets is also a fantastic book

4. Happy to talk if you want more advice

5. Connect with a realtor who understands house hacking and has invested themselves

6. Connect with a lender to see what you qualify for and how you can improve that situation

7. Go to local Real Estate meetups and learn from people there

Wyatt Johnson · Answer

Hey Nick, If you do decide to do something over here in Billings let me know. I'm flipping quite a few places right now and I've been selling some off to other investors because I don't have enough crews yet. I'm no good for Bozeman or Butte, but I know plenty of guys over there.

Jason Bohling · Answer

@Nick Richards I’m a service-connected vet, myself and have used my VA loan on several properties bought and sold over the years using my VA compensation as income to qualify, so not an expert, but I know a thing or two.

You can absolutely do what you’re wanting to do, and it’ll actually probably be easier than you think.  As for the residence, just go get a post office box; a close buddy I served with lives in a custom trailer pulled by his truck, but his official residence is a post office box in Tacoma, Washington.

As for the credit, the VA loan is a little different than FHA or conventional loans; you don’t have to have a high credit score (if I remember correctly you just need a 620 to qualify as far as the VA is concerned) and whether you have a credit score of 620 or 820 the interest rate is the same.  Additional good news for you:  because VA disability is 100% tax-free, it is ‘plussed-up’ when calculating your gross income…so say your disability pay rate is $4,000 as you said, they multiply it by 1.25 so the gross income used would be $5,000 not the $4,000.  Awesome, huh?

Now, lenders do have the ability to tack on their own qualifications that are allowed by VA, so check with several lenders as I want you to have the most accurate information.

Benjamin Sulka · Answer

@Nick Richards,

VA loans offer an excellent opportunity to get into the house hacking game. I would consult a lender on Bigger Pockets that is in your area. Go to the "Build Your Team" section up top and click "Find a Lender". Select Montana and then select Primary Home (House Hack).

Find a lender and explain to them your particular situation. See if the lack of a credit background impacts your options.

I hope this helps!

Nick Richards · Answer

The thing that worries me is that I have not bought anything on credit for years, I mean last loan I took out was in 2008. And I have always paid my way in cash so I pretty much have zero credit history.

Thank you for the other things you have thrown in there, I am going to look into them.

Ryan Thomson · Answer

Brilliant! Very smart of you @Nick Richards

The VA loan is the most powerful loan on the market to house hackers. I have lots of military clients in Colorado Springs that use the VA loan to buy multifamily homes. It is the only loan, right now, that allows you to buy a fourplex for 0% down. You should absolutely leverage this to buy one.

You will need to buy it in your own name though. I would look into getting umbrella insurance if you have assets elsewhere you are concerned with protecting.

100% Disabled veteran looking to get into a 4+plex?

Most Popular Reply