Building a Quadplex with a VA Loan?

Question

Is it possible to build a quadplex with a VA home loan? If so, what would be an estimated cost? Would this be a good investment?

Andrew Postell · Answer

@Tobias Cooper to answer your question, yes, it is possible to structure a new build with a VA loan.  It REALLY rare to have a lender who can do this though.  The lender would need the have a "one time close construction loan" and then be willing to fund it after completion with a VA loan.  Anytime you use this type of a loan you will be required to have a down payment though....even though VA doesn't require one.  The construction piece of it would.

So if you are wanting to take full advantage of the no downpayment of a VA loan then buying a pre-built property would be the way to go rather than just building it.  Hope this makes sense how I am describing it.

Feel free to tag me with any other questions.  Thanks!

Jaysen Medhurst · Answer

@Tobias Cooper, cost will all depend on where you are. That said, it most certainly is not a good idea. It's very difficult to make the numbers work on a new construction 4-plex. This is why you only really see SFH and large complexes being built.

Also, this is not a project for a newbie. Besides the financing, which will be very difficult to get if you have no construction / development experience, the permits, red tape, etc. is not for the faint of heart.

Tobias Cooper · Answer

@Jaysen Medhurst Thanks. I really appreciate the feedback. I’m wondering if investing in a complex that’s already built would be a better decision.