All Forum Posts by: Account Closed

Hoping to use a VA loan to purchase a Condo in Summer 2020 in ~700k range with 10% down in The San Fernando Valley.

I am hearing that as competitive as the market is, a VA loan might not be considered. In the price range, do you think it would be feasible? I have good earnest money. Would I need to be proactive and make offers over list?

Not sure if this market will be conducive or not- I have heard that SFR in Porter Ranch area have been accepting almost exclusively cash offers...

Sorry to borrow your expertise, but I wanted to clarify your statement on acceptable loan terms. Are you suggesting that even conventional loans are not easily accepted? What is your experience with VA loan acceptance with 10% down?

Bump. 

Good morning everyone!

Two years ago I purchased a home on a VA loan with 0 down.

Recently, IRRRL'd my primary residence (single family home) to reduce rate from 4.5% to 2.25% with the intention to transition this property to a rental property when I purchase another property in ~9 months. Appraisal was $375k, current loan is for $360k as I wanted a $0 out of pocket refinance.

Previously, my plan was to save up 20% for a conventional loan for a new property ($700k). However, I am hesitant because my goal refinance out of the VA loan (current home, 375k) into a conventional loan once I had 20% equity in ~5 years may require me to increase the interest rate significantly above 2.25% (depending on the market in 5 years...hard to predict but almost certainly will be higher).

Another option would be to be to put $60k into the current residence to reach 20% equity, in order to refinance my VA loan into a conventional loan which would likely have a similar interest rate of at least <3%.

This also allows me to use the VA loan for the next purchase- as there is no cap on the current VA loan, my goal would one of the following:

1.) Purchase a duplex, rent one unit and house hack. In this case, I do not wish to purchase a duplex that needs work as I would need immediate renters and would want a turn-key duplex. However, most units I am finding are in an area that I desire are ~$1.2 million. To fit my time frame, my down payment will be ~7%.

2.) Purchase a house that needs renovation, move in, renovate while living in the house, IRRRLrefinance with increased valuation, save until I can pay off 20%. In order to save for renovation costs, downpayment likely ~3-5% (unsure if offer is will go through with little earnest money). Likely purchase price 800k-1M- will require higher payments but can be doable even without house hacking.

The third option I am considering, as previously listed is to purchase a property for ~700K on a conventional loan, refinance VA loan in 5-6 years into conventional(once 20% equity has been reached), and then use the VA loan for the next purchase.

Thoughts?

TIA!

Received and understood.  Can you give me any tangible examples of what I can do within real estate with my money or time as an alternative?  Outside of purchasing a property which is not achievable for me at this time?

Currently looking for opportunities outside of my career field and with a smaller financial commitments that can be accomplished through time and effort primarily.

Thanks!

@Lee Ripima

Thank you for your feedback! Can you tell me approximately what it costs to access MLS? Also, why would MLS access be required? I found my last property on Zillow and although it may not be the most up-to-date, it is not "required," is it? I have seen that brokers can be negotiated down to as low as 0.5-1% fee.

Depending on the house price, I think it may be worth a pretty good amount of sweat equity to save ~$10k. Even if it takes 100 hours to complete the paperwork/transaction, $100/hr is not a bad ROI. Obviously, there is a lot I do not know and even after getting my license there will be a lot to learn, but after completing a lot of education, I do not see it outside of my capabilities. Why cannot I act as the agent and do the leg work to find the property and then pay a broker their due for their services?

Good morning everyone!

Two years ago I purchased a home on a VA loan with 0 down.

Recently, IRRRL'd my primary residence (single family home) to reduce rate from 4.5% to 2.25% with the intention to transition this property to a rental property when I purchase another property in ~9 months. Appraisal was $375k, current loan is for $360k as I wanted a $0 out of pocket refinance.

Previously, my plan was to save up 20% for a conventional loan for a new property ($700k). However, I am hesitant because my goal refinance out of the VA loan (current home, 375k) into a conventional loan once I had 20% equity in ~5 years may require me to increase the interest rate significantly above 2.25% (depending on the market in 5 years...hard to predict but almost certainly will be higher).

Another option would be to be to put $60k into the current residence to reach 20% equity, in order to refinance my VA loan into a conventional loan which would likely have a similar interest rate of at least <3%.

This also allows me to use the VA loan for the next purchase- as there is no cap on the current VA loan, my goal would one of the following:

1.) Purchase a duplex, rent one unit and house hack.  In this case, I do not wish to purchase a duplex that needs work as I would need immediate renters and would want a turn-key duplex. However, most units I am finding are in an area that I desire are ~$1.2 million.  To fit my time frame, my down payment will be ~7%.

2.) Purchase a house that needs renovation, move in, renovate while living in the house, IRRRL refinance with increased valuation, save until I can pay off 20%. In order to save for renovation costs, downpayment likely ~3-5% (unsure if offer is will go through with little earnest money). Likely purchase price 800k-1M- will require higher payments but can be doable even without house hacking.

The third option I am considering, as previously listed is to purchase a property for ~700K on a conventional loan, refinance VA loan in 5-6 years into conventional(once 20% equity has been reached), and then use the VA loan for the next purchase.

Thoughts?

TIA!

Thank you for your feedback- but can I ask for clarification?  I have no issue with paying a broker- however if I am willing to do the leg work in finding a property, why should I pay an agent 2.5-3%? (My experience is that in Socal buyer and seller have to split realtor fees unless negotiated otherwise.).  I have read articles on this site that have stated that if a relationship is established with a broker, a fee of 0.5% can be negotiated when acting as an agent.  See below:

https://www.biggerpockets.com/...

As for the training and ethics as a Realtor, despite my limited experience, I do not feel that it would be a limiting factor.  I am a professional myself and operate constantly in direct patient care and maintain my training through continuous CE and deal with ethics on a daily basis.  Are the ethics of a realtor really that extensive?  Sorry to be skeptical, but it seems to me it would not be "overwhelming" and I have the opportunity to save $$$ on commission...

My concern is not so much in the initial time investment for the prereqs- I do not mind classes and especially this online CE should be pretty flexible.  I found the pre-reqs on The CE Shop for less than $100.  

My primary job is as a dentist, currently I have one weekday off per week- currently there is no way for me to utilize this time effectively.  In about 9 months, I plan to buy a new residence and rent out my current property. 

While I do not anticipate selling real estate even on a part time basis, I will hopefully be making several property purchases over the next 5-10 years with the possibility of selling some of these as needed.  For the benefit of buying and/or selling properties with a broker fee between 0.5-1% of purchase/sale price in order to save 2-2.5%, I forsee less hesitation in making any necessary transactions.

With this intention in mind, are individuals vehemently opposed to licensure?  If so, why?  My initial investment will be small, less than $400 and ~80 hours of my time.  For just one purchase, I could save upwards of $10k in realtor fees with greater flexibility in future sales and/or purchases.

Jon thank you very much for your feedback!

I thought that it was a split, however, may be dependent on the location.

Price range is 650k-750k.  Seems like it could be worthwhile.  If I assume 2.5% maybe 17.5k, then assume broker with 50% take- 8.5k, 1.5k for license +80 hours- $6,000 for 80 hours.  Likely, I would lean on a broker to help me with paperwork- my current job takes up 100% of my time from 6-5, so that may be an issue.

Waiting time is concerning at 4-6 months, are there any limitations on how quickly you can complete a class?  I can carve out a few weekends and I think I could accomplish all the classes.  Any recommendations for the third class?  Also, who did you use?  Were you satisfied?

Thanks,

Mitch