I recently posted a plan that I have for a simultaneous transition out of military service to acquire a quadraplex on a VA loan and live in one and rent the other three units out to tenants. I will spare all of the intricate details of the endeavour and get to the point. During my demographic and market analysis, I discovered that the market was almost frozen with sales of income properties. This is due to the location, in college station texas, where Texas A&M university, along with blinn college is located around. The actual appreciation and GRM/CAP rates of all of the investment properties in the area are very fair, and so are the conditions of the properties.
Nobody is selling. College station is projecting a larger student volume, and I have a colleague who works for BP and has gave me some inside information about a possible relocation of a regional corporate headquarters to the Houston area. These properties in college station are not booming, but are flooded with low vacancy and good rental income. Nobody wants to sell their income properties.
My original goal was to get a quad, and I certainly wont be purchasing until spring/summer of 2015. However, there are onlny a couple quads on the market at any given time, and typically are the less desirable ones. There are numerous very nice duplexs that are collecting median rents.
I ask my question in a general sense, because I know that a further financial analysis of a property will be the deciding factor on this, but has anyone ever used an FHA or VA loan and owner occupied a duplex and experienced a steady positive cashflow? I dont have much time at the moment, but I will post some numbers on here soon so we can analyze them. I will give as much details as possible. I am mainly curious if anyone is doing this or has had success with it. Thank you in advance.
Link to my plan and original post if you are interested.
Very well thought out plan. While I couldn't comment on the VA loan to purchase a 4plex, your comment about College Station not having any inventory is not true (have not looked at multi-families however). I currently own 3 properties and am looking to add a 4th soon. The most recent listings have a few potential properties that my partner is looking at this weekend. There are a lot of older properties with good locations that would be great long term holds IMO.
Just stay patient if your in no rush to buy something will come along. Have you looked at the quadplexes over on the street across from target and Outback Steakhouse, I think it's call Emanuel . I think there is an older quad for sale right now. Don't know the numbers on it though, and it could have sold since the last time I was in town.
@Rob Pasche - You are entirely right about inventory as far as SFH and some commercial. Im specifically looking for a quad though, which there arent too many. The duplexs have a decent selection as of now though. Just not anything I see worth hopping on as far as duplexes. The way I am seeing it, If i have the potential to cash flow a quad with nothing down and ammortized closing costs through a VA loan, I see it as somewhat of a waste to purchase a duplex on the same terms because of their would be more worrie with vacancies, cash flow, building equity. Do you understand where I am coming from on that? Sometimes I have a hard time explaining things. =/
@Lundin Matthews - I have a specific window that I need to purchase within, more than likely february-august 2015, which I think is plenty of time for something to come up. As much as I hate to, i might have to take something I dont necessarily like as much per say, a quad, compared to a slightly more nice duplex because of the cash flow and equity potential of a quad and my financing terms will be too good to waste on a property with less gross income potential.
But does anybody know if it feasible to purchase an owner occupied duplex and actually be able to cash flow it? Or will you spend some out of pocket? I ask both of you, because you both are much more familiar with the area than myself.
...or use your VA loan to build an owner occupied plex.
Kerry Baird, UR Home Investments | http://www.urhomeinvestments.com
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I appreciate the help and I understand how to use the tagging feature. I am currently deployed and the internet is very slow through satellite, and my browser does not support it. =/
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