Military: How to buy your 1st home/investment property with no money!

Before I get to the good stuff, let me just dispel some of the rumors... This is NOT a late night infomercial or get rich quick scheme, I am not trying to sell anything or promote any product or service, this is simply a strategy that I used to purchase my first deal which you can use too (as long as you are eligible for a VA loan).  

So here is the secret: If you are a military member or veteran, you most likely are eligible for a VA loan. The VA loan is 0% down loan (yes that is right, you put NO MONEY DOWN) that can be amortized for 30 years and does NOT require you to get primary mortgage insurance (the insurance you are required to get if you put less than 20% down on a house which can cost upwards of $400/month). Many of you veterans might know what a VA loan is already, but what you may not know is that you can use a VA loan to purchase up to a 4 unit property (or in simple terms, a building with four apartments in it). 

Wow I know, crazy that you can purchase four apartments for free. So what's the catch? The catch is that you have to intend to live in one of the apartments (and by intend, they really really really want you to live in one of the units). Which should not be that hard if you need a place to live in anyways. Also, if you find a great deal that allows you to pay off your mortgage and expenses with the rent from the other apartments then you could basically be living rent free (or maybe even making some money!)

So, is that it?  Well obviously there is a lot more to this, you have closing costs, the VA funding fee (a small fee you have to pay for using your VA loan), transfer taxes etc etc etc... So what I did when I bought my first 3 unit building (and you might be able to do this to) is negotiate with the seller so that they pay for all (if not most) of the closing costs.  

Alright this is all good stuff but how the hell did you get paid to buy the building? Well,(and this is the really cool part), when I bought my triplex I had two tenants already occupying two of the apartments and they were paying about $900 each in rent. I also scheduled to close on the building on the 5th, which meant rent was just collected on the first and a big portion of it was prorated to me (I can't do math very well so just divide $1800 by 30 and well you get the gist of it...).  Oh and since I didn't have to start making payments on my mortgage for another two months, I basically got two months of rent for free!

Now I know this might not work for every situation out there but if you live in an area that has many 2-4 unit buildings and the numbers make sense, this might be a great way to get paid to live somewhere/live rent free. Also, even though I put no money down, the bank will still want to see you have certain amount of money saved up and you will still have to pay for some small stuff like a home inspection etc etc... 

Hope this was of value to my fellow service members and best of luck!

Ooorah!