Military Vet investors 100% disability benifits

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
1y
Quote from @Brandon Stelling:

Is there anyone who can help me understand how to leverage real estate investing being a military vet with 100% VA disability benifits?


Not really any different than anything else. You have VA loan eligibility, you have (I assume) a service-connected disability check every month which you would use as your income. If that payment is low, then you will probably need to aim for a duplex/triplex/quadplex you can get into with your VA loan and go from there. With the caveat that you have to pay off your VA loan (or use less than your total eligibility) to be able to use it again moving into another property.

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
    1y
    Quote from @Brandon Stelling:

    Is there anyone who can help me understand how to leverage real estate investing being a military vet with 100% VA disability benifits?


    Not really any different than anything else. You have VA loan eligibility, you have (I assume) a service-connected disability check every month which you would use as your income. If that payment is low, then you will probably need to aim for a duplex/triplex/quadplex you can get into with your VA loan and go from there. With the caveat that you have to pay off your VA loan (or use less than your total eligibility) to be able to use it again moving into another property.

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    Skyline Properties
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  • Joe Scaparra
    Investor · Austin, TX · Member since 2013 · 680 posts · 1k+ votes
    1y

    @Brandon Stelling, thank you for your service. Before you think about investment real estate regardless of being a VET or 100% VA disability you still must consider and evaluate your RICE!

    R Resevres: Needed for downpayment and Emergency Reserve. Have enough that after you buy the property you still have 6 months of expenses in reserves that you can use for daily living. Yes I know about the VA loan (no down payment) and VA disability payments, more on that later.

    I  Income:  The amount of property you can buy will be dependent on your Debt to Income ratio.  Keep your payment at no more than 35% of your income and minimize your credit card and auto debt.  If you have none of that, you could fudge higher on housing debt.

    C Credit. Even though you have a VA loan, you still WANT good credit. Review your score and take necessary step to improve it if you are at 650 or below.

    E Equity, how much of the home will you own on day one.  That would be your downpayment and or market value the day you buy.  The more the better.  More equity means lower downpayment.  

    Now back to your VA Disability question. Yes you are in a GREAT position to buy property but still need to keep improving your RICE. The fact that you have a TAX-FREE income is crazy good. On top of that if you are able to work.....most can, you are in great shape to buy a property.

    Now here is some advice many will disagree with me on but I firmly committed to this: Most people that use a VA loan shouldn't. It is a BAD loan for most people. Why? What may seem like a benefit (NO MONEY DOWN) is actually a curse!! A VA loan is marketed to people who are broke and CAN"T put any money down because they have none to put down. These are people who have little to no RICE. No reserves, Income may be good, credit on the low side and NO Equity in the home. Don't be that person. VA you can avoid the PMI which is good but putting down money will help you keep your payments lower. I am a retired USAF 20 year career and I have never used my VA loan eligibility, because it is a bad loan. It could entice you to buy when you are not financially ready to buy.

    The other nice benefit of 100% VA disability is that you pay NO PROPERTY TAX on your primary residence. SO that will result in a lower monthly payment. If you house hack a single family residence by renting out a room or two then you would have no property tax but if you buy a duplex you might have to pro-rate the property tax. Either way you are in great shape to be a property OWNER!!!! Cheers.

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  • Brandon Stelling
    OP
    Member since 2022 · 13 posts · 4 votes
    1y

    @Joe Scaparra thank you for your service! 

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  • Brandon Stelling
    OP
    Member since 2022 · 13 posts · 4 votes
    1y

    @Joe Scaparra, for the good advice! I will be sure to increase my rice in the future! I also agree with you about what I know of the VA loan. That is why I'm trying to learn more about why some people say it is "such a great loan"

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
    1y

    @Brandon Stelling As a military veteran with 100% VA disability benefits, you can leverage VA home loans to purchase properties with no down payment, no PMI, and favorable terms, including multi-family properties for house hacking.

    Additionally, many states offer property tax exemptions, significantly reducing expenses. Your tax-free VA disability income helps you qualify for loans and lowers your taxable income. Use depreciation on rental properties to reduce taxes further, and consider 1031 exchanges to defer capital gains taxes. Combine these benefits with GI Bill-funded real estate education to expand your knowledge.

    This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

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    • Brandon Stelling
      OP
      Member since 2022 · 13 posts · 4 votes
      1y

      @Ashish Acharya Thankyou for all that information. I am interested in using the GI bill to expand my real estate knowledge. What educational real estate avenues are GI Bill friendly? Or what courses do you recommend?

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  • Erika Albert
    Real Estate Broker · Austin, TX · Member since 2022 · 30 posts · 24 votes
    1y

    Texas A & M has the Texas Real Estate Research Center so I'd imagine they would have some good courses.

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