All Forum Posts by: Kirk Olson

Ryan Jackson is mostly right one change is that you couldn't do 4 100k properties. You're first VA loan you can do at any price I believe, below the max, but on your second, if you haven't used up your entire eligibility, the loan amount must be over $144k. I found this out the long way when I put too much down on my current primary residence and immediately had to refinance so the loan was over $144k. The lender covered all the additional costs since they didn't catch it and claimed to specialize in VA loans.

I used my first VA loan to purchase a duplex two years ago only paying for closing costs. I lived in one side for a year and managed the other side until I left the Army and moved. I used my VA loan again to purchase my current home still keeping the duplex which cash flows nicely and has an interest rate of 2.75%. If you can find a property that you will live in for a year whether it's a duplex, triplex, quad, or SFH and after analysis you determine that it would cash flow as an investment property there is no reason you should not use a VA loan. Just know that if/when you move and want to use more of your eligibility the VA may ask why you are moving and various other questions. I had to send them a letter via my lender of how my new civilian job was like my job in the military.

I just went through the same decision process that you are going through.  I left the Army in February for the corporate world.  I worked with a company to transition into a new job so part of my search was dependent on what jobs were available and where.  From that I took the jobs that I liked and narrowed it down by proximity to good real estate markets and things I liked to do, fishing, hunting, etc.  This landed me in Northeast Indiana somewhere I had never been before moving here.  We live 1 hour from Fort Wayne, where I'm in the process of buy 3 rental properties, 2 hours from Indianapolis, which has lots of opportunities, 2 hours from Chicago, and 3 hours from parts of Ohio.  I'm happy with where I chose to land because of all the opportunities within a short distance.  If one market dries up there is bound to be plenty that I can switch to and be able to go see for myself. 

I will say that I turned down a job that I would have enjoyed more, South of Kansas City, to move here. If I was more experienced or able to invest long distance I would go back and take that job because 40 hours a week is a lot of time to spend at an "OK" job instead of an awesome one.  But, I don't plan on working in 10 years or less and I believe living here will help me reach that quicker than in the other location.

Mine is not as exciting as most but I'll share for encouragement for others looking to start.

Right before the new year I closed my first property, a duplex 3 bd 2 ba on each side. My goal was to move in and find a tenant for the other side to pay nearly all my expenses on it. I started putting ads on craigslist and other sites on Jan 3rd and found great tenants on Feb 19. They currently pay $1100 and my monthly payments are $1147, mission accomplished.

My goal for the rest of the year is to just save the rental income for a down payment on my next property. I will be moving sometime in early 2014 and intend to do the same thing, buy a 2-4 unit live in one and rent the rest.

Thanks all, Jon Holdman that's a great plan and will be what I do from now on.

Thanks David Manin, I did tell the second applicant that I had someone already accepted but they had not given me the date and that I would try to contact them before I could say the property was "available" . I mainly just want to know if by accepting this second applicant and essentially taking the property from the previous if I'm breaking any laws or anything. I haven't seen anything about it in Kansas law. To me the property isn't theres until they sign the lease anyway so it's still up to me to give it to whoever I wan't. It feels kind of like making a deal with a hand shake and not putting it on paper and then having the other party(me) back out. I don't like doing business this way but like I said I've already learned my mistake and won't make it again.

This past weekend I informed a family that they were accepted according to my criteria, and that all we needed to do now was collect the security deposit, first months rent, and sign the lease then they could move in. Well my screw up I didn't ask them when they planned on moving in prior to all of this, I know I'm still learning and have realized my BIG mistake.

The question is I have another interested party who wants to move in tomorrow or the next day. Assuming they pass my criteria/checks I would prefer that since my rental has been vacant for a month. I have emailed and called the accepted party telling them they were accepted and the next steps and they have not gotten back to me in the last three days letting me know when they intend to do this. Am I able to screen another possible tenant and accept them and have them move in even though I already accepted someone else?

My thinking is exactly in line with Brian Hoyt. Even if my mortgage is the same as my rent I will never get any of my rent back. However, at some point in the future I will or can cash in my house for some of what I've been paying, after taking out all the things Jon mentioned. So as long as the equity I can recover is larger than the difference between rent and my PITI I'm better off.

For instance the apartment I'm moving out of rent is $995, money I'll never see again, the house I've bought mortgage is $1147. The portion going to actual principal is only $250 but 1147-250 = 897. So I'm saving $100 a month, luckily it's a duplex though so I'm saving much more than that.

All of that just to fancy up what Steven said:

Welcome Justin, I'm in the same shoes you are, maybe just a few steps ahead. I'm 26, stationed in the middle of Kansas, and as of the 27th an owner of a duplex using VA loan. As required with the VA loan I'll be living in one side, but renting out the other for just slightly over my PITI. Once I PCS it will cash flow nicely. There is a wealth of resources here which helped me take the plunge and just as Thom H. said experience is the best teacher, I've already learned a lot on the acquisition side in the past couple months.

Stephanie that's exactly where the duplex is, and yes Darcy is getting a quote for me today on the soil. Do you know how long it took them to do that project? I'm hoping to beable to close and move in either right before the first of the year or right after, I know it's a short time line but we're working with it.

Did you find your tenant yourself or did you go through one of the PMs? I'm planning on doing everything myself for this year to get my feet wet. I'll be leaving in about a year or so too then I'll turn it over to a PM, I've had a friend use Mathis Lueker to manage his SFH when he moved said good things.

Hi Everyone. My name's Kirk Olson, I'm currently stationed at Fort Riley, KS and living in Manhattan, KS, originally from Iowa. I'm interested in small multifamily properties: duplex, triplex, and quads, which I can buy and hold for cash flow. I've been referencing this site for some time because I'm currently in the process of purchasing my first duplex. I will live in one side and rent out the other side for just slightly above my PITI, by slightly I'm talking only $10. When I move I plan to hold on to the property and rent out both sides.
Here is the full deal:

The duplex has been bank owned since the developer went bankrupt last year, no one has lived in it yet. Each side is 3br/2ba 1300 sq ft with a single car garage and porch.

Purchase price: $154,500 purchased with a VA loan so no money down just closing costs and a 2.95% APR.

Rent: $1150 per side PITI is $1140. Every duplex that has been purchased from this development is fully rented and rents between $1100 and $1200.

Only thing wrong with the duplex is that it has poor drainage around the foundation and for the past couple years water has flowed through holes, that were constructed, in the foundation. The bank will be filling the holes with concrete before I take possession. No damage has happened to the foundation yet so it has not produced a problem yet, however I am going to get it fixed which the bank does not want to take care of. Does anyone have an idea of how much it might cost to either add some dirt or re-landscape the area. I'm not looking for an exact quote or anything just wondering if it is in the hundreds of dollars or thousands of dollars.

What are your thoughts on this deal as well?