All Forum Posts by: Eric Giovannucci

I bought my first "investment" property as a primary home when I was stationed in El Paso, Texas. I did not purchase it with the intent of it becoming a rental any time soon. That being said, I never really analyzed it in that manner. 

I've now used my VA loan several times to "house hack" in some pretty rough markets, more specifically California. Where I got lucky to hold for the minimum 12 months, put a little bit of money into it, and then move on.

The best thing I ever did was analyzed it to the best of my ability given the resources here at BP, a la the calculators and even using listing only services to ensure I get to keep the listing agents 3%, to ensure I get to leave with a much better check. 

My next steps are looking like multi-families. Personally, I think the best thing you can do with a VA loan is to buy a 4 plex because if you play your numbers right (rental income vs. mortgage) you should be able to live rent-free at the very least and potentially cash flow right out of the gate. Live there for the minimum of 12 months, move on and rent out your prior unit to improve your cash flow. Just my .02, hope it helps.

Welcome to BP! 

Hit the podcast and read the guides! They have been a great resource over the years! 

I wish you luck in your future endeavors! 

The only issue with the FHA is the PMI, you won't see that with the VA. Not sure how much of an issue that would be for you (it would deter me)

Another strategy would be to find a multifamily that would pass VA inspection, that needs work and you can put some money into to increase its value. Hack your way through it until you can refi into a conventional, regain your VA entitlement, move and do it again. That could then leave you with enough equity overtime to start pulling HELOCS and increase your portfolio, over time.

Are you planning on using the FHA to purchase a primary residence?

I suppose my first question is if you're purchasing the house with cash, why use a VA loan to finance with afterward? The VA loan is going to come with you having to live there for 12 months, if not it can be considered mortgage fraud and cause problems for you.

Why not use conventional, pull the cash out and move forward to your next investment. 

If you each have VA loans, and have the capital to flip stuff, have you considered hacking through 4 plexes simultaneously, while working on the other flips? May be able to spread your capital around through multiple projects and see a better ROI?

Good job getting your feet wet! 

After the purchase price at 30.6 and putting the 10k in, what is the property valued at now? 

Investing in Military town's can be much like investing in college towns, depending on the demographic within the military you are catering too. The lower enlisted personnel can bring forth a higher risk percentage, as they are younger and may be more likely to cause you issues. That being said, they can also guarantee you a monthly payment as failure to pay can lead to their command becoming involved, if you chose to go down that route.  

Turnover rates in military towns can be quite high due to the SCRA, this allows them to break their lease if they receive orders to deploy or to relocate. 

Most Military personnel tend to relocate every 2-4 years and can see deployments within that time frame. This can cause you the potential to see more vacancy time, especially as they can leave during the times of year that tends to be more difficult to put tenants in a property (fall-winter). 

I have no personal experience in Killeen, however, I have heard very bad things when compared to other military bases. The crime rate overall seems to be significantly high there. Something to take into consideration. 

Hope this helps! 

Read Read Read. While you are trying to position yourself and ready to dive in, ensure that you are building up your knowledge base. @Brandon Turner may or may have not written a book that you should read. 

@Jeremy Cardenales

I can't comment on the insurance aspect, although I feel like they should be covered with their own insurance policy? My rental has a renters insurance policy and is still under a VA Loan that I have under my name (soon to refi and place in an LLC, hopefully).

When I first transitioned this to a rental, I set up a separate checking account for this property for all aspects of monetary transfers (rent, maintenance, etc.). For me, at the time this was the easiest way to separate and track finances. 

It may help to post where the property is so that people that are familiar with that area can comment. 

This is one of the best ways of investing, in my opinion. 

Depending on your market, you can definitely cash flow, live rent free and successfully rehab it as well, as long as you make your purchase correctly. Get after it!