Starting out with little to no money, which method is recommended

[Keaton Hill]

Hello, My name is Keaton 

I am currently in Japan looking to move back to Oklahoma in September, Upon arrival I am looking to purchase my first single family or multi family house that will start my investing journey. I will have $10,000 in savings with being straight out of the military I will be unemployed therefore it is difficult to get a home loan, even from the VA. I will have to rent for a few months until able to get a job for the time being, (or are there banks that will approve a home loan without current employment?). If possible I would like to stay away from renting and preferably would like to purchase a single family house or multi family while I am currently still in Japan and while I am employed unfortunately the VA denied my request, is there any guidance on that or am I stuck on renting and waiting for employment once I return?

For the start of my investing I plan on buying homes then renting them until I earn enough money to conduct he BRRRR method.

when purchasing a property can you utilize a conventional home loan or do you have to purchase as an investment property? or once you live in the property and decide to move and rent that property out does the loan change from a conventional loan to an investment or does the loan and the rates stay the same? ( if I am way off track please let me know because this has been confusing me for months? 

Thank you for your time.

[Bryan Vukelich]

Aloha @Keaton Hill

First, regarding your question about the type of loan to purchase a property.  If you plan to live in the property and can qualify, you would get a conventional loan which offers the best terms.  If at any time you decided to vacate and rent out the property, nothing changes about your current loan.  Just know for tax purposes, if a home is your primary residence for 2 out of 5 years, you qualify for a $250k tax exemption as an individual.  But once you rent out the property, you can also do a 1031 exchange and roll the funds into a new investment property if you want to avoid paying capital gains at the time you sell the property. 

And $10k is a great start.  I am unfamiliar with the market in Oklahoma, but if you need additional funds, maybe consider partnering with a family or friend.  Or post on BP looking for investors.  My belief is that if you find a truly good investment opportunity, you can find the money to make the deal happen.  And you don't need any money to get a deal done and get equity in it.  One example: I was once contacted by a BP member who had an off-marketing multi-family opportunity where purchase price was $5M.  The deal was quite attractive and he wanted a 20-30% equity stake in the investment for being the "deal finder" and initially would not be investing any of his own money into the deal.  

Another way is to use hard money. Some just simply look at the financials of the deal and don't look at your credit score or assets. I've personally used hard money to close a deal very quickly and I've had clients also use them and it has worked out well. And also, as Alex mentioned, there is the DSCR loan that would offer better terms than hard money.

Wish you well on your real estate journey - happy to answer any other questions you have - I am here to serve you.