All Forum Posts by: Sean Hudgins

 That's great then you really don't have much to worry about. For the most part, lenders' occupancy requirement is between 6 months and a year. After that, you are pretty much good to start looking at the next house. 

A CPA is a must for your situation. As you start to expand to different states, the tax situation gets a little more complicated than you might want to deal with on Turbo Tax. 

I would seek out the advice of a lawyer on the LLC formation, but personally, I don't put too much weight on the LLCs until you have several properties. Until you get a couple of properties, often the LLC may just complicate things more than it helps protect you. Get some great insurance and leave the Missouri property as it is in the LLC. But a lawyer is going to better inform you on the LLC issues and how to make sure you don't end up doing something wrong in the operation of that LLC because, after all, the LLC does no good if it won't be upheld in court.

I would see no issue with getting a third home since you have the entitlement. That being said, every lender has their own requirements, so I wouldn't be surprised if some lenders have arbitrary rules like that, but to my knowledge, that is not a VA requirement.

how long have you lived at this property? 

@Reynaldo Ramirez I love rentals in this area, and using an upgrade in your primary to add a rental to your portfolio is a great strategy! Personally, if it has a big yard, I would require the tenants to take care of the lawn maintenance. Most renters who are looking for a big yard don't mind the maintenance. Also, consider allowing pets if you have a big yard, as that renter pool is eager for the yard, and there are a lot fewer options out there for them. I did all of the things I just described with my own property here in Chesapeake. It was my first home and turned into a fantastic rental as we upgraded.

I would also consider when you upgrade to find something that could use some work; we bought a fixer-upper and have added well over 100k in equity because of it. 

I would learn the skills to manage the property yourself while you are local, but @Shawn Griffon has a good point about keeping that cost in mind. I am less of a fan of self-management of long-term rentals when you are out of state.

I would contact your lender and ask about the process. 

But one way to do this may be to do the division, get everything in place, and be prepared to pay off the loan as soon as you sell the first parcel. This would probably avoid any heartache that the lender may have. (not legal advice). So, looking at your case, I would subdivide the 3 acres with the house and sell that and pay off the loan, then do the double wide.

I would be very interested in hearing about the process as you figure it out. 

I'm also interested in hearing about your thought process on building a park on the remaining 12 acres. 

 Definitely!

The VA has an entitlement amount based on your location. This can be found Here on the VA.gov site. 

So, depending on where you live, you can get another home based on the entitlement you have left. Also, if you move from a less expensive to a more expensive market, you may have more entitlement than you would have thought.

As far as the occupancy requirement, the VA and most lenders understand that life changes. So, for example, if you are living in a 2-bedroom home but you just had your third child, you can write a letter to the lender and request permission to waive the occupancy requirement in order to find a home that better suits your family's needs. Also, the occupancy requirement is pretty much disregarded if you have a PCS change of duty station to another location. It sounds like you are changing duty stations and will be geo-batching and leaving the family at the current home for a year. If that's the case, you should have no issue getting another home through a VA loan with 0 down. If you are out of entitlement, you can use the link above to see how much the VA will guarantee, and you may have to bring a down payment or go a different route, but with that said, there are a lot of 0-5% conventional products out there nowadays. I would reach out to your lender and describe your situation and see what they advise.

I hope that answered your question.

You should be able to use an attorney or title company in your state. VA assumptions are pretty standard so they should have no problem processing the paperwork for you.

Firstly, congratulations on a great deal. That hard work has paid off if you can sell it for 450-500k. With the insurance issues in FL, although a fantastically appreciating market, this deal may be a better bet for taking the cash and deploying elsewhere. Realistically, when you move, you will want property management if you live out of state, so you will be pretty far into the red every month. How long have you lived at this property doing the flip? Can you stretch it out to get the 2-year primary residence tax exclusion? 

I would keep the first rental if it's cash-flowing, liquidate the second home, and use that money to invest in the area you are moving to. Or have a healthy chunk of change for the transition to civilian life. I recently made the transition from dual active income to self-employed, and those extra savings have made that process a lot less stressful and opened up a lot of options for me.

I know someone else mentioned house hacking, but it sounds like your family is not going to be down with that strategy... My family is the same way, so I get it.

The next suggestion I go for is a live-in flip. Use your VA loan to get a primary residence that needs some love, find something that requires primarily cosmetic work, get your hands dirty, and make it a gem. The beauty of this is you have a couple of great exit strategies when you're done.

1. Live in it for two years and sell at the end of the two years, freeing up more of your VA eligibility to buy the next one. You also avoid the capital gains tax by living in it for two years. Now you have cash to put down on a rental property conventional loan, and you can go and grab the next live-in flip with the VA loan.

2. after six months to a year, move to the next property, where you can use the remaining balance on your VA eligibility to acquire and rent out the first property. Then rinse and repeat the process until you are out of VA eligibility and refi the first property into a conventional mortgage.

The key here is that you need to add that sweat equity to the properties, providing a cushion for market fluctuations and increasing the rental potential for each home. I will echo the others. You should just get started; don't get into analysis paralysis trying to find the perfect strategy.

The only downside here is that you will be doing a lot of moving, so make sure the family is on board, or else after the second move, you may be spending all your profits on a marriage counselor... just kidding.

@Brandon Durant , how you phrase this question sounds like you are buying a personal residence, and you said it was your first home. All of that tells me that you should absolutely NOT waive inspections. 

A builder is not a home inspector; they have different eyes for different things. 

What others have said is correct: sellers hate the idea of being nickel and dimed for minor repairs or pressured into repairing things to get their home sold. However, you should not remove your protections as a buyer, especially not in today's market. 

Another option for you is to do an inspection for info only... ***DISCLAIMER: I am not a lawyer and do not do RE transactions in RI, so take this with a healthy grain of salt... What I have done for clients in Virginia is make an offer with an inspection "for info only." There is some debate as to what that means and how that is written in the contract, but usually, I still submit a full inspection contingency, and the understanding is that no minor repairs will be requested. However, It does still mean that my client can pull out without losing their EMD, and if there is a major repair needed, I can still request that repair or some compensation to the buyer for the repair. This is a way to ease the seller's fear of being nickel and dimed on repairs.