Maximizing Your VA Loan: How to Start Building Wealth

By Johnny Lynum, The Military CEO | REI Genius

As military members and veterans, many of us are driven by the desire to protect, serve, and secure a better future for ourselves and our families. But did you know that the same VA loan benefits designed to help us buy our homes can also be a powerful tool for building wealth through real estate? 🏠 Whether you’re on active duty, a reservist, or a veteran, the VA loan is more than just a path to homeownership—it’s a gateway to financial freedom. 🚀

Here’s how you can start using your VA loan to purchase investment properties and set yourself on a path toward long-term wealth.

Step 1: Understand Your VA Loan Entitlement

First things first, you need to understand what your VA loan entitlement is. In simple terms, your entitlement is the amount the VA will guarantee on your loan. This guarantee allows you to buy a home with no money down and no private mortgage insurance (PMI). In 2024, the VA loan limit for most counties is $726,200, but it can reach up to $1,089,300 in high-cost areas like San Francisco or Washington DC. 📈

However, what many people don’t realize is that you can use your VA loan benefit more than once. This can be particularly advantageous if you’re interested in buying additional properties. By understanding how much entitlement you have left after your first purchase, you can strategize your next real estate move.

Pro Tip: If you still have entitlement left, you can purchase a second home or even a multifamily property, which brings us to our next step.

Step 2: Consider Multifamily Properties or Foreclosures

If you’re looking to maximize your VA loan for investment purposes, a multifamily property is an excellent option. The VA allows you to purchase properties with up to four units, and you can live in one unit while renting out the others. I wish I had known this early on in my Air Force career. This setup can generate rental income that helps cover your mortgage or even provide positive cash flow. 💰

Back in 2013, I made a similar move when I PCS’d to Northern Virginia. I used my additional entitlement to purchase a HUD foreclosure condo with my VA loan, no money out of pocket. It was a risk, but it paid off when I sold that property for a significant profit in January 2023. 🏢

Pro Tip: Look for properties in areas with a strong rental market, such as those near military bases or universities. These locations often have a steady demand for rental units.

Step 3: Analyze the Market and Find the Right Deal

One of the keys to successful real estate investing is doing your homework. 📚 You’ll want to analyze the local housing market to ensure you’re making a sound investment. This means looking at factors like property appreciation rates, rental income potential, and the overall economic health of the area.

Take a look at cities like Columbus, Georgia, and Hampton, Virginia—two places where I’ve seen firsthand how the right deal can lead to substantial returns—that are set to provide solid cash flow. 💼

Pro Tip: Utilize online tools like Zillow or Realtor.com to research property values and rental rates in your target areas. Look for properties that are undervalued or have the potential for appreciation.

Step 4: Leverage Your Network and Resources

One of the greatest advantages of being in the military or a veteran is the network of like-minded individuals and resources available to you. Don’t hesitate to reach out to fellow service members, veterans, or real estate professionals who have successfully used their VA loans for investment purposes. Their insights can be invaluable. 🤝

Organizations like Biggerpockets offer a wealth of knowledge and networking opportunities. Whether through webinars, local meetups, or online forums, connecting with others can help you navigate the complexities of real estate investing.

Pro Tip: Consider joining a local real estate investment group or online community. The support and knowledge shared in these groups can be incredibly valuable.

Step 5: Get Pre-Approved and Start Shopping

Once you’ve done your research and identified potential properties, the next step is to get pre-approved for your VA loan. Pre-approval not only gives you a clear picture of how much you can borrow, but it also makes you a more competitive buyer in a hot real estate market. 🛒

Remember, time is of the essence. The sooner you get pre-approved, the sooner you can start shopping for your investment property. And with the backing of the VA, you can move forward with confidence. 💪

Pro Tip: Work with a lender who is experienced with VA loans. They can help you navigate the process and ensure you’re getting the best possible terms.

Step 6: Close the Deal and Start Building Wealth

Once you’ve found the right property and secured your financing, it’s time to close the deal. This is where the magic happens—where you officially become not just a homeowner, but a real estate investor. From here, you’ll start building equity, generating rental income, and setting the stage for long-term wealth. 🌱

If I can leave you with one final piece of advice, it’s this: Don’t be afraid to take the leap. I’ve been in your shoes, weighing the risks and benefits. But I can tell you from personal experience that real estate has the potential to change your financial future. The sooner you start, the sooner you’ll see the rewards.

Final Thoughts

The VA loan is one of the most powerful benefits available to military members and veterans. It’s designed to help you achieve the American dream of homeownership, but it can also be your ticket to financial independence through real estate investing. 🗝️

By understanding your entitlement, exploring multifamily options, analyzing the market, leveraging your network, and taking action, you can start building wealth today. Remember, the journey of a thousand miles begins with a single step—and in this case, that step is a strategic real estate investment. So, what are you waiting for? Your future is in your hands. Let’s make it a prosperous one. 🌟