Hello and Merry Christmas,
It is finally time for me to post this as I have been putting it off for many months. Sorry it is lengthy hope you all enjoy. So to start off my name is Brody Jett I live in Spokane WA. I am 24 and I am a new investor and full time service member with the Air Force. I currently teach Survival School and have that as my full time job. I enjoy spending most all my time analyzing and figuring out what deal I want to do next. I do not hear a lot about VA financing other than a first home buyer on here. So I wanted to share my experience so that it may be useful possibly to someone in the future here on BP looking to use VA benefits if eligible to expand portfolio's and investment strategies.
I began to search into real estate back in the beginning of 2015 after being introduced to Rich Dad Poor Dad. I wanted to jump right in after making my brain numb from all the reading and wonderful podcast at BiggerPockets.com. I found my team to be friends and spouses of co-workers. My Agent started me off with 22 great duplex and triplex that needed some work to buy and hold. I wanted at this point to test the waters and see without spending ANY money or very little if I could get into an investment property.At this point after reading the book seemed like a dream. . My wife and I lived in a SF 2B 1Ba home that I bought with a VA loan for 88K @3.75% 30yr fixed in 2012 I began to work and get this to where we could rent. Two months after purchase we Refinanced for 2.5% with a company that only refinanced for existing VA loan members. So our first payment was not due for close to 4 months. Our mortgage for this is $508. I am a active duty service member and this allows for VA benefits. veterans could be eligible as well.
After I got infatuated with investing this year I wanted to work with my agent to find a good deal and see if i could sneak into one with little money. I found a duplex with tenants and 6% cap rate for 89K. So we went to next step and I talked with a couple local lenders and they all wanted 20% down or more and 6 months’ mortgage aside in account (around $6500). So I said well there goes my chances to do this RE investing any time soon.
I couldn't stop. I love the reading and podcast on my way to work and the thought/possibilities of having a rental. So I dug into the VA information on financing to see about another purchase. Persistence paid off, and I found I could now get a rental. I called a VA lender and started asking away. Can I buy another home with VA benefits? Yes, you have up to $417K of benefits in your county. Can I keep my SF home and rent it? Yes. Can I buy an apartment building?...long pause by loan officer, sir you have $417k of total benefits. Man did my face look like a cake eating kid. Are there any special rules for this? Yes, you HAVE TO be the primary resident of the new home or live in one unit of the multifamily home. I said DONE sign me up. I had only used a portion of my $417k on our SF home for 88K. So we got approved and I found a 4 plex and was hooked. Wife on the other hand was not going to be a primary resident as it was shady. So I changed tactics a little and we found a newly remodeled duplex that already had renters. It was 219K I offered 210k with seller paying closing and they accepted We paid no down payment, No private mortgage insurance premium requirement, VA also can limit the amount you can be charged for closing costs. So I only paid earnest money of $1000. When we closed a couple weeks ago we got back around $1124. So we made $124 by buying this duplex. Now we are renting our other SF home out for $850 and it has a cash flow around $200 after expenses. The duplex is a House hack now and we love it. Bigger Pockets is the main reason we were able to do this and continue to do this. Thank you BP!!!!!!
Brody Jett
References:http://www.benefits.va.gov/HOMELOANS/purchasecashout.asp
