All Forum Posts by: Christopher Lane

Welcome! Happy to meet you, please feel free to connect with me! My two cents is listen to as many podcasts as possible!

I drive an hour each way to work and can knock out a podcast a day. What a wealth of information!

Hey there Andrew, first of all TYFYS. I am a Crayon Eater myself and I am also possibly relocating to the Sac area within the next year so this post hits home. So, my two cents rests on a few questions first - Do you already have a VA home loan on a residence? Did you know that the VA loan can cover up to 4 units? Is your family open to living in a 4 unit for a year or so?

The current VA loan limits for Sacramento County are $552,000, $706,650, $854,200, $1,061,550 for a 1-4 unit, respectively. Meaning that you can find a 4 unit up to $1.06mil and rent the 3 out and live in the fourth. from my calculations you won't be cash flowing but, you could probably live free with the mortgage being covered by the other 3 rents. Not only do you get the rents, but you keep the equity. Generally speaking the closing costs will be rolled over into the mortgage meaning nothing out of pocket. That's how mine was anyway.

BP calls this house hacking, It's a great idea, and when the year is up (VA funding is based on the fact that its your primary residence for 1 year) and you've made some improvements in the house, you can ReFi out of the VA loan to a conventional using the equity in the home and rinse and repeat basically.

Feel free to connect with me if you have any other questions or if i didn't answer this the right way.  

-Chris

@Ben Zimmerman i've got a following question, since you seem to be the subject matter expert, I figured I would get your input as well. Like every good Marine, I have a TSP. I'm curious about pulling it all out and converting it to a self-directed IRA, or self-directed something so that way I can use it to purchase my first rental property. Do you have any idea how I would go about doing that?

@Ben Zimmerman Thank you so much for being able to help me understand these benefits a lot better. You definitely were able to speak to these more eloquently than I could. Thank you very much.

@Alexander Felice I guess I should’ve added a little bit more context. But I do appreciate the response. When I say 4% interest on credit cards I was thinking it from a cash advance point of view for a down payment.

Per the servicemembers civil relief act any lines of credit that I had before entering the military, including credit cards, are capped at 6% interest by law. granted, not a lot of people use this.

I will agree with you that the VA loan has been somewhat of a trap for me. I can refinance out of it anytime I want and use it on a four unit place and house hack though.

Personally, I am just a working stiff looking for creative ideas about how to use some of these benefits to my advantage.

@Taylor L. Thank you, are there certain things I should avoid? I have never used Hard money before and I am pretty curious about it.

Here’s a strategy that I haven’t seen many (if anyone) talk about and I’m curious to see how the BP family would do it.

Below are the benefits (I know of) that I can use:

Please let me know if I’m missing anything.

4% interest on credit cards

No annual fee on AMEX charge cards

USAA and NavyFed banking

VA home loan

6% max interest on any other lines of credit (home depot, etc.)

10% Military discount from Home Depot and Lowe’s

How would you use these programs to benefit your REI journey?

I’m looking into purchasing my first property in Pennsylvania. I would like to try hard money but I’m not sure where to start. Anyone have any tips?

Hey Team, I did it. I put an offer on a place. The SFH originally hit the market for $74,900. it was listed for X months and got lowered to $60k. I waited about a month and put an offer of $47k on it. Did I offer right? there are no other offers on it. I had my realtor look at it (I'm currently out of the country) She said it was a great looking rental, room for upgrades but the rent is currently getting $1100/mo and I don't know that it would really need to be upgraded since I wouldn't be able to get that much more in rent if I did.

I have to put 20% down if the offer gets accepted. How easy would it be to get that back so I can get another rental property? I understand the concept of cash flow and appreciation, I understand BRRRR strategy and things like that; what I don't truly understand is how to refi quickly to get capital to reinvest. The ARV, based on comps and comparison is priced right at between $60k and $75k.

Management is going to cost me 10%/mo and tenant pays all utilities.  Currently rented and will be asking the tenant to sign a new one (hopefully two) year lease upon closing.  The home will have a clear CO from the city and that will help my mortgage rate since it will be generating income from day 1.  The tenant is nice and respectful from what my realtor says and has historically paid on time.

The house is being sold As Is - is that bad or not necessarily bad but I should look for some things, or not a problem at all?  

I saw pictures of the house, relatively new water heater, new electrical panel, good foundation, the roof is ok, but I see it needing repairs down the road maybe 5-10 years.  

Is this too good to be true, or am I missing something? I would be netting about $600/mo cash flow.

Wow Don, Thanks for the incredibly helpful post!