first time house hack (va loan) (repairs)

4 Replies

Hello again Bigger Pockets

I would appreciate advice from the experts and tax gurus on my situation as I am new and possibly about to buy my first property.

I am under contract (VA loan) for a tri-level that has an in-law apartment. If I close at the current price I should have about $50k of equity. I am plan on initially house hacking with a long term lease on the in-law suite to cover about half of the mortgage and eventually transition to short term leases of the suite which should cover all or most of the mortgage.

There are several issues with the property. The house needs some roofing repairs and will need to be replaced within the next several years. There are also several other repairs the VA may require to be fixed before we close. I figure the cost to do all the repairs to be less than $10k.

2 questions

1) If the seller will not pay for repairs would you escrow the money to pay for these or would you walk away?

2) If I do close on the property would it be a better tax advantage to replace the roofing over the rental section in stages (half 1 year, half the next)?

Josh

I definitely appreciate any advice on these questions or my situation in general.

@Joshua Briscoe Congrats on putting together your first deal. And welcome to BP!

I haven't done VA loans in years (I was a mortgage banker), but my guess is that the VA would require those items to be fixed. If all the costs are $10k, and you are getting the property $50k under market value, then yes I would still think that is a great deal.

Then your second question is about replacing half of the roof. I would just do it all at once, versus getting something to come out two different times. My assumption is, it would be slightly cheaper to get it all done at once, versus having it be two separate jobs. Then from a tax perspective, and an accountant can chime to to correct me if I am wrong, but you would depreciate it over 27.5 years whether you do it all at once, or spread it out over two years, so it wouldn't make much of a difference. 

Thanks @Andrew Kerr for the advice and information.  Unfortunately, I just heard from my agent who told me that this property is not zoned correctly for me to do a long term or short term lease. 

This doesn't seem to make sense as I see other properties within the same type of zoning doing Airbnb.  If anyone has any advice on this I would appreciate it.   I am calling the zoning office in the next few minutes to get to the bottom of this.

Thanks @Andrew Kerr for the advice and information.  Unfortunately, I just heard from my agent who told me that this property is not zoned correctly for me to do a long term or short term lease. 

This doesn't seem to make sense as I see other properties within the same type of zoning doing Airbnb.  If anyone has any advice on this I would appreciate it.   I am calling the zoning office in the next f

So this deal fell through due to the zoning issues, but I am under contract for another property a single family house in Easley, SC (va loan with the buyer paying closing costs and any repairs).  My wife and I are planning to live in this house for several years while we save and invest and then refinance and rent it out.

My plan is to buy my first investment property here in the next few months. 

Thank you to @Andrew Kerr and the multiple people who gave me advice through my email, but didn't post directly to this thread.  I appreciate all the help and encouragement thus far.