All Forum Posts by: Greg R.

Hey Cody,

First off, thanks for your service. You have one of the most (if not the most) powerful tools available in investing, your VA loan. My first deal was a duplex in San Diego w/ my VA loan. It cost me nothing to get into that place and it's been absolutely amazing. Over the years I've leveraged it for a ton of money (cash out) to buy other investments and am still cash flowing very strongly with a significant amount of equity.

Feel free to DM me, I am also a vet and have been in this game for about 12 years. Have had some amazing highs, and also some lows - learned a lot of lessons. 

Greg

There are a lot of different ways you can be successful and make money in REI. You're doing the right thing by asking questions and researching. I would personally stay out of "big" metro areas at the moment - prices are sky high and good multi-family deals are going to be scarce. With multi-family, make sure you consider the employment & crime rates in the area along with the quality of tenants you'll have. There will likely be a pretty dramatic swing in terms of areas with high quality tenants = lower cash flow... areas with poor quality tenants = higher cash flow. You'll need to determine what you have the appetite for.

my .02 is that this is a very volatile situation. I'm hoping that this conflict comes to an end sooner rather than later. Further, I REALLY hope that the US doesn't get roped into a war w/ Russia. If we do, there is a good chance that this escalates into nuclear war. If that happens, thinking about real estate investments is going to be the last thing on anyone's mind. 

Even if this conflict dies down and doesn't directly impact the US, we're on a very bad trajectory with inflation. I honestly don't know how "regular" people are going to make it. I'm referring to "regular" people as non-investors who generally live check to check. The cost of living is increasing at an exponentially higher rate than pay. It's the regular people that keep us in business by renting our homes both long-term and vacation rentals (for us cash flow investors.) 

What if it costs so much to buy food and other necessities that people can't afford their rent? Or at least not afford the rates that we're seeing in the market today? What if fewer people are able to go on vacation and occupy STRs? What if homelessness and unemployment skyrockets?  What if contractors, PMs, material companies, everyone else has to jack up their rates to keep up w/ inflation & energy costs? What happens to all the people who over extended and bought in the last year or 2 at inflated prices? 

Obviously a very grim outlook, but if you look at the trajectory over the last couple years... doesn't seem like some "way out there" scenario we might find ourselves in. 

I certainly don't have the answers, but it's something to think about. 
 

Quote from @Nick Belsky:

@Greg R.

210 Days per the VA Guidelines.

Cheers!

 Appreciate the info Nick. 

Quote from @Amir Guerami:

Greg-

Thank you for your service and sacrifices. There is not wait time from going from a VA cashout to a conventional loan. The 6 month that you are referring to is going from VA loan to an IRRRL. Please remember that the VA loan can only be used to buy a principal residence. I think you have to be very careful in how you apply for each loan in terms of occupancy (principal vs. investment).

 Thanks for the time Amir. 

I agree with @Jonathan R McLaughlin, I'm not too concerned with the actual score, I'm looking into the details. How many open accounts, what are current monthly commitments? To me that is more important that their gross income being 3x of the rent or their score being a certain #. Let's say rent is $1,500 and they make 5k. If they also have $800 in car payments, $500 in credit card payments, $200 in medical debt, $350 in student loans, etc. You get the point... on paper their gross income would exceed 3x the rent, but they are up to their neck with debt and will probably have a hard time scraping by. 

 Also, what were the defaulted accounts? Were they medical bills, credit cards, etc.? I don't think it's uncommon for renters to have poor credit, if they had good credit & good income, they would probably be in the market to purchase. Whenever we see things that concern us, we ask for an explanation. Maybe someone made a mistake a co-signed on a car for their kid and wasn't able to cover the payment when their kid defaulted. 

Prior evictions are a big red flag, that's probably someone you want to avoid. 

Also, I want to see reliable work history. If I see someone at the same job for 5+ years, that's pretty good. However, if someone has had 3-5 jobs over the last 5 years, that can be a little scary. Why are they moving around so much? Is it by choice because they getting better jobs, or are they getting fired?

Hi @Eileen L., thanks for your time and response. I considered that, but since my appraisal came in about 10-15% low, there wouldn't be much to pull out since I would need to maintain "x" amount of equity. With the VA, I'm able to pull out 100% of my equity which makes this deal enticing. I was considering taking the VA cash out, then refinancing into a conventional loan to free up the VA.

Since the appraisal came in low, I would be able to pull out 100% and still have a fair amount of equity to refi into a conventional. 

So I'm trying to figure out the time requirement... how fast I can refi into a conventional loan after I close the VA loan.

For this particular property rent is $3,400 per month, so I think we spent around $1,700 on a Samsung fridge home depot. However, in a different unit that rents for about $1,400, I think we went to a used appliance shop that warrantied their products and purchased a used fridge in good condition for about $700-800. 

I agree with @Nathan Gesner Not really practical for renters to purchase their own appliances and drag them around from rental to rental. I actually have a new tenant moving in a unit in a couple of weeks that wants to bring their own fridge. No big deal for me, I happen to have another unit that needs a fridge, so it's going to work out great.  

Anyone else out there that can answer this question? How soon after closing a VA refi can I refi into a conventional loan to free up my VA entitlement.