What Would You Do in this Situation?
Member since 2019 · 9 posts · 2 votes
I thought this may be an obvious, but interesting and useful topic to start. I have my own scenario that I am curious to see what you all would consider doing should you have found yourself in my shoes.
25 years old
Low income, labor for a GC
Veteran, access to VA loan
~$40K saved
720 credit score
Carry little to no debt (occasionally carry a 2-300 balance on my cc, that's it)
Can't think of other details to include, but this might serve as a good starting point.
Appreciate responses, and look forward to the discussions ahead.
@Vincent Gurko I think you’re in a good position to do some house hacking in a multi-unit. If you plan on doing the work yourself, which financially makes the most sense and practically since you have experience with your day job, you’ll be able to find something that needs upgrading, but is livable at the time of purchase.
Using a low down payment VA loan and saving your cash for the renovation is what I would do in your situation. Then refi once your done to get a lower payment and maybe pull some of that cash back out.
I have done this myself with a triplex in Philadelphia and a low-down, FHA loan. I live in one of the units, rent the other one out, and renovate the third. So I still get help with the mortgage even while I'm renovating. If you can find a Quad, you'll be in an even better position to have one unit vacant while you renovate.
Let me know if you want to look for your first house hack in Philly. I can help.
I would get into Real Estates. :)
Hop on over to the Military Investing forum and start reading through all the threads. I am also pretty sure there are a couple VA RE investors who put out some great content... can't remember the name of the blog though... I am sure some quick Google work will bring it up.
Where do you live ?
In the Philadelphia area
Originally posted by @Jon Reed:
I would get into Real Estates. :)
Hop on over to the Military Investing forum and start reading through all the threads. I am also pretty sure there are a couple VA RE investors who put out some great content... can't remember the name of the blog though... I am sure some quick Google work will bring it up.
Thank you for the advice, heading over there now :D
If I was in your shoes -
I would house hack using a VA loan, whether it is a small multifamily or a 3 or 4 bedroom house where you rent out the rooms. If you get something that needs some fixing up, you have the funds for some rehab work. This way you get experience buying a house, learning how financing a house works, experience rehabbing a house, and experience finding tenants and managing a property. If you enjoy the process, continue investing in real estate. If you don't enjoy the process, at least you now have some equity in a property with tenants helping to pay down your mortgage.
@Vincent Gurko I think you’re in a good position to do some house hacking in a multi-unit. If you plan on doing the work yourself, which financially makes the most sense and practically since you have experience with your day job, you’ll be able to find something that needs upgrading, but is livable at the time of purchase.
Using a low down payment VA loan and saving your cash for the renovation is what I would do in your situation. Then refi once your done to get a lower payment and maybe pull some of that cash back out.
I have done this myself with a triplex in Philadelphia and a low-down, FHA loan. I live in one of the units, rent the other one out, and renovate the third. So I still get help with the mortgage even while I'm renovating. If you can find a Quad, you'll be in an even better position to have one unit vacant while you renovate.
Let me know if you want to look for your first house hack in Philly. I can help.
@Vincent Gurko I'm a vet myself, Philly area native and am in a similar situation except I purchased my first property for cash that I'm currently rehabbing to BRRRR for short-term rental. My question would be why are you working for a GC doing what I'm assuming is grunt work for $15-$20/hr when you have access to a VA loan and 40k saved? Do your own grunt work on your own property that you buy with virtually no money down and earn a much higher hourly $ rate via the equity you create in your own property. Either keep the GC grunt job while doing your own rehab outside of work or get the loan, use all the leverage the VA can give you then use the 40k savings to live off of while you rehab your property. You have the world at your feet thanks to the hard work you've put in to save that 40k and through your service. Take advantage of it brother!
You’re in a great position! Depending on your family situation, but if you are single or if you can get your spouse on board I would look at house hacking. House hacking is just using loans designed for purchasing a primary residence in order to buy investment properties. This means you will need to live in it.
I would highly recommend using your VA and looking for a four-Plex. Four is the highest number of units that qualifies for this type of loan, but you can also look at 2 and 3-unit houses.
If you’re handy find one that is a bit of a fixer upper to get a better deal and use the 40k to fix it. Live in one unit and rent out the other three, if they need fixing then you can work on the one you’re living in and slowly work your way through each unit.
Once you've lived in it for the necessary amount of time required by the loan and you've saved up you can move on to another one. At that point you could REFI and use your VA again. You could pretty quickly build up a good portfolio.
, Tyler
@Vincent Gurko I'm a vet myself, Philly area native and am in a similar situation except I purchased my first property for cash that I'm currently rehabbing to BRRRR for short-term rental. My question would be why are you working for a GC doing what I'm assuming is grunt work for $15-$20/hr when you have access to a VA loan and 40k saved? Do your own grunt work on your own property that you buy with virtually no money down and earn a much higher hourly $ rate via the equity you create in your own property. Either keep the GC grunt job while doing your own rehab outside of work or get the loan, use all the leverage the VA can give you then use the 40k savings to live off of while you rehab your property. You have the world at your feet thanks to the hard work you've put in to save that 40k and through your service. Take advantage of it brother!
Thank you for the reply.
These are exactly my intentions. I am currently living in a House Hack, participating in my free time. I think I will hold off until I am finished here, and get my expected pay out from this before I jump in on my own then.
I am not familiar with how the VA loans work outside of them needing to be your primary residence, and under livable conditions upon purchase. At least, this is what I have been told. I need to educate myself on the in's and out's of the VA loan options I think. I would much rather purchase a multi-unit property if the finances line up - a duplex or triplex preferred but most I have come across seem to be far from where I am working which becomes an issue.
You're in a great position! Depending on your family situation, but if you are single or if you can get your spouse on board I would look at house hacking. House hacking is just using loans designed for purchasing a primary residence in order to buy investment properties, which means you will need to live in it. I would highly recommend using your VA and looking for a four-Plex, which is the highest number of units that qualifies for this type of loan. If you're handy find one that is a bit of a fixer upper for a better deal and use the 40k to fix it. Live in one unit and rent out the other three, if they need fixing then you can work on the one you're living in and slowly work your way through each unit. Once you've lived in it for the necessary amount of time required by the loan and you've saved up you can move on to another one. At that point you could REFI and use your VA again. You could pretty quickly build up a good portfolio.
, Tyler
Thank you for the reply!
So as I wrote my previous response, you answered my question as to what type of houses can be purchased with the VA loan. A quadplex sounds ideal - I will start my search. Thank you.
@Vincent Gurko I think you’re in a good position to do some house hacking in a multi-unit. If you plan on doing the work yourself, which financially makes the most sense and practically since you have experience with your day job, you’ll be able to find something that needs upgrading, but is livable at the time of purchase.
Using a low down payment VA loan and saving your cash for the renovation is what I would do in your situation. Then refi once your done to get a lower payment and maybe pull some of that cash back out.
I have done this myself with a triplex in Philadelphia and a low-down, FHA loan. I live in one of the units, rent the other one out, and renovate the third. So I still get help with the mortgage even while I'm renovating. If you can find a Quad, you'll be in an even better position to have one unit vacant while you renovate.
Let me know if you want to look for your first house hack in Philly. I can help.
Appreciate your response Kevin. I am very interested in speaking more about your own multi-unit property you are doing this with - I think I need to iron out a few details before I jump in, but this is sounding like the route I want to go.
I am looking primarily in Philadelphia suburb areas, not exactly in the city - I don't think I could swing living off my savings and using it to rehab at the same time, so I need to maintain at least part time work to cover my bills.
That’s great! Wasn’t sure what GC was when I first wrote, but after reading further I’m assuming general contractor. So, you definitely know how to fix up houses, you should find a fixer upper and build some sweat equity into it!
The VA is like any other loan designed for purchasing your primary residence. So you can buy SFH all the way up to a quad Plex. Except you aren't required to provide a down payment and the APR may be a bit better. I don't know all the ins and outs of it though and I would highly recommend Finding a really good mortgage broker who isn't going to charge you a bunch of crazy fees. Ask around and maybe try to find one that is a vet or gives good deals to vets.
Good luck and good work,
, Tyler
You're in a great position! Depending on your family situation, but if you are single or if you can get your spouse on board I would look at house hacking. House hacking is just using loans designed for purchasing a primary residence in order to buy investment properties, which means you will need to live in it. I would highly recommend using your VA and looking for a four-Plex, which is the highest number of units that qualifies for this type of loan. If you're handy find one that is a bit of a fixer upper for a better deal and use the 40k to fix it. Live in one unit and rent out the other three, if they need fixing then you can work on the one you're living in and slowly work your way through each unit. Once you've lived in it for the necessary amount of time required by the loan and you've saved up you can move on to another one. At that point you could REFI and use your VA again. You could pretty quickly build up a good portfolio.
, Tyler
Thank you for the reply!
So as I wrote my previous response, you answered my question as to what type of houses can be purchased with the VA loan. A quadplex sounds ideal - I will start my search. Thank you.
Hi Vincent,
A house hack quad using an FHA loan was my first investment here in Philadelphia and it was an amazing one. I can't recommend it highly enough and, if you can use a VA loan instead of FHA, all the better. Let me know if you want to grab coffee one day soon and chat. Happy to help you navigate this a bit.
Troy
Buy a duplex with your va loan..........househack it by placing a renter on the other side..........
@Vincent Gurko - I don't think I am going to give you any ground breaking advice that you haven't received from the other wise people in this thread.
House hacking with the VA loan should 100% be your first step. From there, you can get into other types of REI if you so desire. Great that you're a GC, you'll likely be able to save at first in doing your own work and adding value.