I know this thread is from 10+ years ago, but has anyone used this loan product?
The Homebuyers Choice Loan from Navy Federal is very enticing from my research, and am also wondering if anyone has house hacked with this loan?
That loan is for first time homebuyers. If you're not one, then you're not eligible apparently.
There are other down payment assistance loans available however for folks not first timers.
State and local municipalities have an ever-growing demand by non-landlord homeowners to reduce or eradicate STR's in their neighborhoods. The reason for this is chocked up to 2 reasons:
1. Short term rentals create rowdy and sometimes unsafe conditions in otherwise quiet and safe neighborhoods.
2. Short term rental homes/units drive up the price of homes faster than primary residences and long term rentals.
Shifting from long to short in some locations is perfectly reasonable, however I highly recommend you check out your local city's ordnances discussing the requirements for short term rentals. Additionally, you are likely subject to the TPT tax, transaction privilege tax, or a similarly named license/tax. Ensure you work that into your expenses when underwriting.
Answering your questions:
Experience - Location is really your main driver here. If your location is good, then the place will rent for both long and short. If your property sucks, people won't rent it out as a STR either. Don't listen to your agent at all, go on rentometer, airDNA, and other websites to help you make an educated decision on how your property will rent. Your agent is NOT doing this for you and is only concerned about making their commission, no matter how many cookies they send you or white their teeth are.
Cash flow - you are not guaranteed cash flow. Yes, you might have some stellar months as a STR during the year, but you might have long stretches where the property is vacant. With your research that I mentioned above, make the choice where you feel the most confident with supporting evidence. It's not a one size fits all situation. Your property must be desirable - and that desire is different for different reasons when comparing STR vs LTR.
Tips - find a good property that lies inside of a good location and has a high demand for either STR or LTR. Again, research and underwriting your deal. Again, do not listen to your RE agent's opinion on the matter. They do not care.
Moving - Sure, find an affordable place that you like and start there. You will have the exact same questions wherever you go though. If you keep waiting, you will keep finding reasons to not do it.
Hey, either do it or don't do it. Stop with the "Should I...?" questions.
You don't know us. Call up a wholesaler, agent, or lender and see if your situation dictates whether you should or should not buy that property, fix it up, take out a HELOC, or invest in that syndication. Our opinions on these forums are just that, and many of us are wrong. Do it. Do ittttt.
Good Day,
I served four years in the US Navy and am approaching the end of my contract. As I transition to the civilian life I would like to utilize my VA home loan to start my real estate journey. Any tips?
Hey Will,
I'm a veteran, investor, and mortgage lender and I've used my VA loan multiple times to buy homes, refinance, and sell. It helped me quit my old job after I got out of the Marines and now I do lending full time. One of the ways in which I was able to do this was by using the VA loan to the maximum as a tool in my investing toolbelt. I'm gonna go over a few things that most folks don't know to better help you out.
1. If you plan on using your GI Bill, great! But you can't use that income to help you qualify for a VA loan - or any other loan type for that matter.
2. If you plan on getting a job, make sure you work 40 hours each week.
3. You can have 2 VA loans at the same time. Then, you can refinance both of those VA loans into conventional, keep them as rentals, do what's called a "1 time restoration," restore your VA entitlement, and repeat the process again. Totaling 4 homes that you acquired at zero down.
4. As soon as you get into a home, househack. Then, on your taxes, make sure that Schedule E is filled out for the room/unit that you rented. Putting this on your taxes will help you in the long run.
5. If you have any sort of injury you suffered from the military, GO TO THE DOCTOR and document it. Then, as you are processing out, claim all of those injuries. The goal is 10% or higher disability. If you have 10% or more of a disability, the VA funding fee is waived.
6. If you want to buy a multifamily (4 units or less) you can use the projected rental income on the other units to help you qualify. Ex. You make $3000/mo on your job and the rental income from the units is $1000/mo. You can use 75% of that $1000 toward your income to help you qualify ($750). $3000/mo + 75% of $1000/mo = $3750/mo.
7. Pay off your debts. Sell the Challenger you bought and get a beater.
8. Consider a VA Renovation Loan to finance the repairs into your loan.
9. Work with me because I'm a VA lender, investor myself, and a veteran that knows how to navigate this better than anyone on these forums.
@Erik Browning That's a wealth of information, thank you for sharing! Wondering how one does 2 VA loans at the same time, I don't know if that is possible in San Diego. @William Ladd Wondering how your RE journey is going, hope you took this advice :)
Will and I actually worked together after this post.
You can certainly do 2 VA loans at the same time in San Diego, it just depends on how much entitlement you have remaining. If you don't have any entitlement remaining, you still have options for a VA loan, though they are less attractive.
Beyond that, there are still other ways to get into another place for either low or no money down.
Everyone's situation is unique and it requires analysis on your actual numbers.
You can do what is called a 1-time restoration, though it does require you to refinance the current mortgage. I suspect you have a sick rate on it, so it might not make sense if it was double what you already have. For example going from a 3% to a 6.5%. If you have a 5.5% and going to a 6.5%, then maybe it's ok. It just depends on your situation. Everyone's is different.
If you're looking for a zero down loan program, then an FHA forgivable down payment assistance might be the way to go. The problem with FHA on your next one is the departing residence, it will likely require you to take a full PITIA loss monthly, thus affecting your DTI. I'm not sure what your income is, so it might support it.
It's best to speak with a lender and have them look at your scenario. Run a soft credit report and not a hard credit report; the soft report will not affect your credit and we can still analyze your scenario and properly advise. There are a lot of moving parts.
If you want to reach out to me to take a look feel free, but I understand I'm some random lender guy on the internet, so no worries if not. Best of luck to you.
Good afternoon all! My name is Benjamin Latta-Singer I started using bigger pockets about two years ago but never did much with it. After many life changes in the last two years my husband and I have decided we are ready to embark on the journey of buying our first home. We would love as much advise as possible in all areas of buying a first home. I am an active duty Marine so we do have access to the VA loan. We would like to buy this home with the intent to keep the for 3 years at least. Depending on where our life goes in the next three years will decide if we need to move or use our home as a rental property thereafter. We don't know yet at this moment if in our market that is even possible, so worst case we could always just sell the home. If we have the ability in the next 3 years we would like to try and purchase a second home to flip and build our wealth. It would be great to get some advice and ideas from a bunch of different people to see if anyone has started out this way or has any advice, dos, or dont's. Thank you in advance for any help.
I should really make a video series and post it for folks with this question.
If your goal is to maximize your VA loan, the first thing to do is understand how your entitlement works. I've posted about it before in past threads, so if you are interested, maybe search my old posts. TLDR, it's like a 5 gallon paint bucket filled with money. You can use part or all of that bucket for a house. Any left over can be used to buy another house.
There are caveats to this of course. You can spend beyond your bucket of money and still do zero down, though there are tradeoffs. If you've used up your bucket, you can refill your bucket, but there is a trade off. Everything here is a trade off and if you're interested in long term planning, it's best to ensure you fully understand how it all works before jumping in. If you do not have the time to do that and just want to get into a home, that's ok too.
It's a lot of what-if scenarios, so I apologize for the brevity. But I suggest reading up on how your entitlement works at the onset, then start making a plan.
Hit me up if you'd like to have a call. Or not. Best of luck to you both and welcome :)
Good Day,
I served four years in the US Navy and am approaching the end of my contract. As I transition to the civilian life I would like to utilize my VA home loan to start my real estate journey. Any tips?
Hey Will,
I'm a veteran, investor, and mortgage lender and I've used my VA loan multiple times to buy homes, refinance, and sell. It helped me quit my old job after I got out of the Marines and now I do lending full time. One of the ways in which I was able to do this was by using the VA loan to the maximum as a tool in my investing toolbelt. I'm gonna go over a few things that most folks don't know to better help you out.
1. If you plan on using your GI Bill, great! But you can't use that income to help you qualify for a VA loan - or any other loan type for that matter.
2. If you plan on getting a job, make sure you work 40 hours each week.
3. You can have 2 VA loans at the same time. Then, you can refinance both of those VA loans into conventional, keep them as rentals, do what's called a "1 time restoration," restore your VA entitlement, and repeat the process again. Totaling 4 homes that you acquired at zero down.
4. As soon as you get into a home, househack. Then, on your taxes, make sure that Schedule E is filled out for the room/unit that you rented. Putting this on your taxes will help you in the long run.
5. If you have any sort of injury you suffered from the military, GO TO THE DOCTOR and document it. Then, as you are processing out, claim all of those injuries. The goal is 10% or higher disability. If you have 10% or more of a disability, the VA funding fee is waived.
6. If you want to buy a multifamily (4 units or less) you can use the projected rental income on the other units to help you qualify. Ex. You make $3000/mo on your job and the rental income from the units is $1000/mo. You can use 75% of that $1000 toward your income to help you qualify ($750). $3000/mo + 75% of $1000/mo = $3750/mo.
7. Pay off your debts. Sell the Challenger you bought and get a beater.
8. Consider a VA Renovation Loan to finance the repairs into your loan.
9. Work with me because I'm a VA lender, investor myself, and a veteran that knows how to navigate this better than anyone on these forums.
@Erik Browning That's a wealth of information, thank you for sharing! Wondering how one does 2 VA loans at the same time, I don't know if that is possible in San Diego. @William Ladd Wondering how your RE journey is going, hope you took this advice :)
Will and I actually worked together after this post.
You can certainly do 2 VA loans at the same time in San Diego, it just depends on how much entitlement you have remaining. If you don't have any entitlement remaining, you still have options for a VA loan, though they are less attractive.
Beyond that, there are still other ways to get into another place for either low or no money down.
Everyone's situation is unique and it requires analysis on your actual numbers.
Thanks for the interest in this loan product. We are happy to provide you contact information for the credits unions that offer this product. This is not a Freddie/Frannie product. This is a portfolio loan offered by local credit unions where you can buy up to 5 pure investment properties with as little as 5% down if you qualify, which you do have to qualify still with DTI, credit, reserve requirements, etc.
There are different credit union options that would be best to connect with based on where you are investing and your situation, so that is why it's important to connect with our team to guide you on the right path on where to apply so you are not wasting your time and having multiple unnecessary credit pulls. Just send your RTR rep a message and we'll get you on the right track.
This is an excellent loan option that will allow investors to scale quickly and maximize tax benefits!!
Can you please send me the product matrix?
Here's a fun example
Pro's:
It's great to have BP as a trustworthy partner to give clients a level of trust that they will be taken care of. BP cosigns our ability to operate and vets us both on the phone and online prior to featuring us. If we do a bad job, then it looks like BP also does a bad job. Neither party wants that.
I've helped out a handful of people that found me on the platform and heard a variety of unique and exciting stories from real investors that need some help with their situation. Whether it's a refinance on a balloon payment coming due or as simple as an active duty military person wanting to house hack their first home. Really rewarding when I can help them meet their goals.
The cost of the service is pricey, however it can pay itself off if you are helping folks consistently.
Most of the clients that come in are not qualified or don't actually want financing, however there are some folks that are indeed serious.
Con's:
Incorrect phone numbers and email addresses
Delusional keyboard warriors threatening to start being an investor. These folks are imagineers that have a real estate empire in their own heads.
Many folks that fill out the "Find a Lender" form just want to talk to someone for educational purposes and are not interested in actually purchasing a property. Instead of reading one of the many books and podcasts BP publishes on the foundational elements associated with REI, they would prefer that I take 1-2 hours out of my day on the phone to explain everything. I'm a complete stranger. Although I'm happy to talk about REI (it changed my own life), the purpose of the platform is to facilitate financing, not to be a full time educator. This happens so frequently that changed my lender page description's first line to read, "SERIOUS INQUIRIES ONLY."
Dopamine hits. In the age of same day delivery and on-demand streaming, filling out a form gives newer folks a hit of dopamine and makes them feel like they are doing something positive in their lives. How do I know this? Well, I've done it myself and so have you, if you're being honest. "Learn to code and create a coding portfolio to get a $100k job in just 18 weeks!" Regrettably, I've filled out that form many years ago and ultimately decided that's not what I want to do with my life just 30 seconds after filling it out. When folks fill out the find a lender form that have not put in the simple research into what it takes to buy a house or investment property, the euphoria quickly fades and they go back to work and forget they ever filled it out.
New client inquiries from the "Find a Lender" platform keep coming in the middle of the night when I'm sleeping and cannot reach out immediately. I've set up a Zapier zap to text my phone whenever I get a new client message because folks are very impulsive (see above about wanting education and dopamine hits). The impulse and question they have quickly subsides once they get off of the BP platform and they go back to their late night cocktail, TV show, or go to bed and forget they even filled out the form. Again, many folks are just looking to talk to someone about HOW TO START investing in real estate instead of having a basic foundation of what is feasible - and they want the money right now. Often times, folks have little to zero income, little to zero capital, and want me to sell them the dream of purchasing real estate with no money and no job. I'll leave the dream selling to David Greene and Tom Cruz.
Fake leads. I've sent support a number of bots or fake leads with false information.
Our job as lenders is to provide education for clients for THEIR SPECIFIC scenario, not to educate the population as a guru on why they should get into real estate investing. Folks will need to decide on their own if REI is right for them and have a basic understanding of how it works - it is very personal to them. I am not a guru or a podcast host, just a resource to help you carry out your plan
I am an agent an did their find an agent program too. I would agree with most of what you are saying. I feel the program needs more of a "certification" process for the leads. It took so much of my time to verify these leads. It is like paying to do what BP should have done. I will not make that mistake again.
The fix is simple. Have BP make them run, and pay for, their credit report. If they're not serious, they won't pay. If they are serious, they will pay.
The barrier to entry is high, and it's getting higher. You'll have more fluff than ever before, if you're not expecting that I would switch jobs.
I get tons of folks asking how to get in, if I want to lend to this, join that, etc. all garbage I never reply to. And I'm not even a lender like you. So I cannot imagine what you're going through.
As for BP's utility, it's a business. I can't blame them for monetizing this egregiously as they push the narrative of investing. It's all in sync.
We have the ability to filter what we are offering. Despite being able to lend on a variety of loan products, I filter it down to just one to reduce the amount of fluff like you mentioned. If I casted a broad net, like I did in the beginning, then you get a lot off emotional form fillers. I also put the disclaimer on there, which I think pushes some of the not serious folks away. It's not a bombardment of bad clients because I've actually helped out a handful of folks the few months I've been featured. This post is more of a call to action to BP to help people, especially newbies, in a better way.