New To Investing (Military)
Hi guys I just recently started getting into real estate and have been doing my own research. I'm in the military and just wanted some guidance if I should use a VA loan to get my first property or should I try to find a lender. Any help is welcome!
@Julian Demacabalin VA is the way to go. With zero down payment requirements and lowest interest rates out there. Plus, you can use your VA Guarantee again and again. Just need to either refinance the property into a conventional note or sell the property. I have personally used my VA Guarantee several times and counting. But I recommend you find a good VA lender in NC. They will be able to work with the regional VA office to get your Certificate of Eligibility (COE). But that is easy to do to. But VA approved lenders can help with that and confirm rates and amounts you qualify for. Hope this helps.
Hi Julian,
First, thank you for your service. Second, congrats on getting in the mindset of owning real estate and leveraging your military career to do so. One of the greatest stories I heard was a soldier who was going to retire at the age of 38 with 10 rental properties completely paid off by consistently buying houses where he was stationed and put them on 15 year mortgages. With his pension and 10 rental checks, he didn't need to work again. Although you might not stay in the military for a full 20 years, leverage those benefits the best you can for as long as you can. Real Estate will do the rest.
Yes, use your VA loan and ideally use it on a multifamily property (1-4 units). After a while you can refinance out of your VA loan and then use it again. I would repeat that as many times you can. Next few years, will be difficult for many as the economy goes into a recession, but you'll have a stable job, access to great loans and in markets with heavy rental needs (areas around bases).
Good luck.
Albert
Hi Julian,
I completely agree with Ben. The VA loan really is the best way to go. At zero money down, you can't beat it. If you decide to buy a single-family residence, you can house hack to build up wealth while your equity grows. An even better choice would be to buy a multi-family unit such as a duplex, tri-plex or four-plex. Live in one and rent out the others, and the best part is with the VA loan, you'll be buying with no money down.
I'm in agreement also that a VA loan is the best choice. I've been long out of the military and have a VA loan on my primary now. I don't know your family status, but if you can get a small multifamily property with you VA loan and house hack the other units could be financially advantageous.
The VA Loan is through a lender. Same place, different type of loan. If your lifestyle allows it, buying up to four units is the way to go. Live in one, rent the others out. This will accelerate your learning and growth.
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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VA loan is a great way to get your first property. I'd shoot for a fourplex
Hi Julian, using the VA loan should be the best way to get started in Real Estate. One of the easiest strategies to get started in today's market would be to invest in turnkey properties in a mid west state and stay passive in your journey. Feel free to reach out if you want to discuss.
Quote from @Julian Demacabalin:
Hi guys I just recently started getting into real estate and have been doing my own research. I'm in the military and just wanted some guidance if I should use a VA loan to get my first property or should I try to find a lender. Any help is welcome!
Hey Julian,
Agreed, VA is definitely the way to go if you are getting started and want to get in to a primary residence.
Are you in the Camp Lejuene area? That's where I am at, and I have some decent knowledge of the area. There is also a really good real estate investor meetup in the area once a month.
Quote from @Brian Rogan:
Quote from @Julian Demacabalin:
Hi guys I just recently started getting into real estate and have been doing my own research. I'm in the military and just wanted some guidance if I should use a VA loan to get my first property or should I try to find a lender. Any help is welcome!
Hey Julian,
Agreed, VA is definitely the way to go if you are getting started and want to get in to a primary residence.
Are you in the Camp Lejuene area? That's where I am at, and I have some decent knowledge of the area. There is also a really good real estate investor meetup in the area once a month.
Hey Brian Im actually stationed in the North Carolina area. And I have been doing my research on the VA loan and I'm now looking for property deals in the area.
Hey @Julian Demacabalin the VA loan is a great tool to have but depending on your situation it might not be the best move for an investment in NC. So I am not military but I invest in a military market in NC and I deal with the VA loan all the time as an agent in New Jersey. Are you active duty? If so the main issue I see with using the VA loan to invest while your active duty is your entitlement when you move. Depending on where you are in NC there is a good chance when you get orders you will be moving to a more expensive area. I would Rather see you use your VA loan when you move to an area where the down payment is going to be a bigger issue. Ill use the average duplex in the area of NC I invest in and the average duplex In the areas of New Jersey I invest in as an example. you can buy a duplex in Onslow county NC for around $125,000 so your down payment using a FHA loan would be $4,375 and lets say $5,000 in closing costs total $9,375. In My New Jersey market you can get a duplex for around $600,000 your down payment using an FHA loan would be $21,000 and closing costs would be around $13,000 total $34,000. I know you wont be able to predict where you will be getting orders to next but if you do head into a more expensive appreciation based market I think that would be a better area to us your VA loan in. There are a few other reasons I would argue using the FHA loan in certain situations over the VA loan but they are much easier to explain over the phone. So I am more then happy to connect and trouble shoot a couple scenarios.
I'm not sure what you current situation is, but if you are a single guy I would start lining up some potential buddies that want to get out of the barracks and would like to rent a room (make sure they are reliable / someone you wouldn't mind living with etc...).
After that, I would start looking for a decent house that has enough bedrooms (and at least a couple bathrooms) to support the roomate situation. Whether its J-ville, Holly Ridge, etc... focus on finding a place in a good neighborhood. Also, I would run the #s ahead of time (treat it as if you will move out in a year or 2) and see if it cash flows once you buy the next one (and depending where it is... it could potentially be a long-term, short-term, mid-term... pay attention to HOA rules if they exist when determining asset class). Your roomates will really help offset the mortgage payment and give you the opportunity to save your $.
What you use to buy the property is less important. VA is great, but you can also use a low down payment conventional loan (they go as low as 3% for 1st time home buyers if you can qualify.... there is also a 5% down option). FHA is good too... but you end up paying some pretty hefty Mortgage Insurance Premiums (regular Mortgage Insurance for a conventional loan is generally lower). VA is the lowest cost loan because the funding fee takes the place of mortgage insurance and it gets rolled in to the ammortized principle payment (instead of paying up front). You will also see better rates with VA.
Use roomates if you can! That is a force multiplier, and it allows you to buy this asset and offset that monthly cost so you can save for the next one. And there are plenty of guys trying to get away from base who are more than willing to pay... it's a win-win.
Quote from @Brian Rogan:
I'm not sure what you current situation is, but if you are a single guy I would start lining up some potential buddies that want to get out of the barracks and would like to rent a room (make sure they are reliable / someone you wouldn't mind living with etc...).
After that, I would start looking for a decent house that has enough bedrooms (and at least a couple bathrooms) to support the roomate situation. Whether its J-ville, Holly Ridge, etc... focus on finding a place in a good neighborhood. Also, I would run the #s ahead of time (treat it as if you will move out in a year or 2) and see if it cash flows once you buy the next one (and depending where it is... it could potentially be a long-term, short-term, mid-term... pay attention to HOA rules if they exist when determining asset class). Your roomates will really help offset the mortgage payment and give you the opportunity to save your $.
What you use to buy the property is less important. VA is great, but you can also use a low down payment conventional loan (they go as low as 3% for 1st time home buyers if you can qualify.... there is also a 5% down option). FHA is good too... but you end up paying some pretty hefty Mortgage Insurance Premiums (regular Mortgage Insurance for a conventional loan is generally lower). VA is the lowest cost loan because the funding fee takes the place of mortgage insurance and it gets rolled in to the ammortized principle payment (instead of paying up front). You will also see better rates with VA.
Use roomates if you can! That is a force multiplier, and it allows you to buy this asset and offset that monthly cost so you can save for the next one. And there are plenty of guys trying to get away from base who are more than willing to pay... it's a win-win.
Thank you Brian, This was very helpful! I will definitely be looking for a deal where I can go in on with some buddies.