What is the next step?

Question

Hi all,

I haven’t posted in a while since I’ve been dealing with my new home. I just purchased a 2bd 2br condo in Kansas City with a VA home loan. I put 0% down. I’m looking to turning this into a rental eventually. The condo is a pretty decent condo, even though there could be a few upgrades here and there. I was curious of what you’d do if you were me right now. I appreciate the guidance in advance. I’m still new to all this and my goal is to eventually move out of this condo, rent it out, and get a new house and rinse and repeat for a bit.

Alex Olson · Answer

I would rent or sell that condo and buy a duplex in a class A or B location in KC. Best way to scale and build wealth is to 1031 exchange and I can help show you examples here in KC.

Jason Wray · Answer

Nicholas,

The one piece of advice I would give is refinance the Condo before you start renting it out.  This is going to do two things to help you in the future to free up your VA entitlement so you can buy another home 100%.  It will also allow you to pull some cash out if you have the equity and for tax purposes.

You can have two VA loans at the same time but having two means that the second home may not qualify for 100%.  Best thing to do is avoid the higher DTI debt to income, claim one as investment and use the rents to offset the new purchase.  There are a lot more details that go into two VA loans and the downside but transitioning into a conventional loan on the  investment refinance will save you a lot of frustartion down the road.