Man, that’s a lot of questions. I’ll answer one or two that I am familiar with.
I'm in a similar process right now, attempting to buy a duplex with a VA loan (Currently own a home in CA with a VA, so only have $288k remaining for new purchase).
For VA loans, you can do no money down up to ~$450k or so. In certain higher cost markets, this goes up to ~$529k. Anything above that, you will be putting money down. The down payment will be the difference in the purchase price and your available VA numbers. Not sure where you came up with the $700k number and I'd be interested if I'm mistaken.
Also, 2-3% is not realistic. Two years ago, I got 3.25%. Now, with a stellar credit score, I’m qualifying at 4.65%. Again, I could be mistaken, but I’ve shopped a lot of lenders recently and mid to high 4% is what you should be expecting at best.
As for what you should do, start researching. $25k will almost be what you are paying in closing costs on a VA loan at $500k+ with originations fees included. Talk to lenders, shop some rates and find a property or two in the area you are looking to find out what you are comfortable paying to have them run numbers on - this will give you your monthly payments fairly accurately.
That’s the end of my “advice”. For my personal experience in the recent months (currently in purchase negotiations on a duplex - process started cross country):
1.) I talked to lenders, found a price I was able to afford first.
2.) Looked at houses in the area I wanted to buy - over weeks/months to get a general understanding of what made sense
3.) Acquired a real estate agent. This took 4 attempts before someone worked for me.
4.) Run numbers before making an offer - Make sure they work for you. (I ran my numbers very conservatively to allow for my lack of experience in this)
That’s about all I did. I viewed about 10 properties in total. The one I’m trying to buy never hit the market as my agent knew the seller and put me in touch with her to get the ball rolling (lucky). But viewing the other listings gave me a good understanding that this one is the best deal I’ve seen. Hope some of that helps! Good luck.
There is a VA loan out there 1% down, 4 % interest, 5 points at closing. IF you have more questions about it tag me and I will answer.
No problem. I actually just got a 4.5% VA approval and a 4.65% conventional approval today. So maybe you could find something a little lower, but not much.
He was open to whatever I wanted. That’s why I communicated with 4 agents before picking him. He has a ton of experience in the area, a lot of connections (bringing me potential duplexes before they hit the market), and was extremely patient.
We started off looking at anything in my price range - up to $500k. We looked at a couple of distressed properties, but they were way too big of projects for me. After I settled on duplexes, we had already found the one I wanted, but if the deal didn’t work out, he was getting a good idea of what I wanted. Edit - He was willing to look at foreclosures; forgot to mention that.
Just find someone that rubs you the right way is my recommendation.
Feel free to hit me with any questions. Just remember, I’m not much more experienced than you are!
Regarding foreclosures and short sales:
One thing to take into account, for a VA loan, the house has to be in livable condition. No foot wide holes in the kitchen floor (one place I looked at), not gutted to studs, appliances in place, etc. Basically "move in ready". I'm sure there are workarounds for that, but trying to buy a foreclosure, in the condition they frequently end up in, is going to be tough with a VA loan.
They tend to be a bit stricter from what I understand, so some sellers might be less inclined to work with a VA buyer also. A similar offer from a conventional buyer and a VA buyer will be a little more inclined to go with conventional buyer (I've been told) just because there is a smaller chance the financing falls through due to inspection issues.
Get your approval with the VA first my man. That's what I did.