VA Loan Information and How to Get Started

7 Replies

Hello everyone. I'm new to REI and the BiggerPockets community and I was hoping to get some insight. I have been reading through the forums regularly and everyone here seems extremely helpful. The main question that I have is about the VA Loan that I used to purchase my first house at the beginning of this year. I didn't put any money down because I wanted to keep it for savings and possible investing. I am looking to purchase my first rental within the next 90 days. I'm willing to use my savings to get started but I'm trying to figure out what I should do (if anything) with my current home. The value of the home has grown quite a bit since I purchased. I'm considering trying to sell and maybe start house hacking. I live near Portland, OR and the properties here are fairly expensive. I'm also considering renting out my house but that won't generate any cash flow. My main goal right now is to start investing and I'm willing to be risky. Any help would be greatly appreciated.

@Steven Stutzman with a VA loan, you have to occupy the home for 1 year before you can move out and turn it into a rental property. At that time, you can use whatever money left in your entitlement to purchase another for 0 down.

VA loan also allows you to purchase up to a 4 unit property. So when your 1 year is up, look at doing a house hack and getting into a small multi with it.

I suppose you can sell it already, I don't know if it has any contingencies against that. However, there is a chance you would have to pay capital gains tax for buying and selling in the same year.

@Steven Stutzman I'm not sure what your living situation is, but why not house hack now? Rent a spare bedroom, build more equity and save more cash for the next investment. I bought my first house in 2001 using my VA loan. A 2005 cash-out refi was likely one of the biggest mistakes (learning experience) I've made.

Without knowing specifics, my gut still says to keep it. Rent rooms out, stockpile cash, and in a few months when your year of living there is up, move on to another and repeat. If the name of your game is long-term, then don't give up a house that was basically free to you. I've used my VA loans a couple times and one of my regrets was selling one of them vs. refinancing into a conventional loan. I'd be cautious about equating activity to advancing.

Maybe your best bet is to sell and buy something else with your VA loan, taking this year as a learning lesson. But if you can keep the underlying asset and still have learned the lessons then why sell?