Approved for VA Loan Now what?

24 Replies

Just got a phone call today about an inquiry I had about using my VA Loan. I was approved, now what!? The obvious answer is find a home in my price range that fits my needs and a property that will resale or rent out well in a year.

Sounds simple and probably is but being the novice that I am right now I don't know how to sniff out deals in my area. Also I'm thinking long term, if I would come out better fixing up the property and renting it out after I move out or putting it on the market.  I know there are a lot of variables that go into these types of decisions so like with every question I have had in the last few days I'm running to BP!

Any and all insight is welcomed.

Congratulations @Brandon Proctor , my advice is to start learning your market.  Use Zillow and other lo9cal listing places and start finding out what sells for how much and where.  The key to finding a deal is being able to recognize a deal when you find it, also learn what to look out for.  Once you have familiarized yourself with the market start going to look at properties.  you can hook up with local investors there for help once you find some you are interested in.  You are a bit too far from me for me to help you with pricing.

Thanks @Jerry W.  I was a little nervous when they were running my credit which always happens even though I have pretty good credit.

I have been on Zillow day and night which drives my wife crazy a bit.  There are developing neighborhoods on the outskirts of Cheyenne and on the southern side of town (which some shy away from). I also look at what they say the estimated mortgage would be for the homes I look at. Which I'm sure shouldn't be too far off.....right?  I'm trying to find other investors in the area but I haven't come across many yet.

My husband is active duty Navy. We buy houses as personal properties and rent them out when we are transferred. Using our VA loan was how we got our foot in the door. From there we have grown and now buy all more "pure" rentals.

We buy in brand new areas, i.e. cities we don't know every time we are transferred. I look by buying in the "best school districts" I buy #2 typical. Than I look for the worst house in the best neighborhood with the best schools. I aim E5-E7 to O1-O2. I try to have $200 below BAH. My houses are no frills. You don't make extra for frill but you will pay more.

I buy cosmetic fixers uppers. Things like a scary looking but harmless crack. Needs a paint job bad landscaping etc but have great bones (newer roof, appliances, etc). We have done very well using transient military lifestyle as a bonus for investing.

@Elizabeth Colegrove I like your style. Definitely the top pay-grades that still rent and don't purchase. A lot of young O's also end up in apartment buildings/communities around some bases. Just food for thought.

I'm an O3 in the MA Army National Guard. I've been around a bit even though I always end up back in Mass... I've seen a lot of your posts and this one really puts all the others into perspective. I really understand your investing style now and I can relate to it much more now than before.

@Brandon Proctor  

i have an accepted offer closing january 2015 using va loan. took me long time to find.    cash flow much better on duplex,  3plex 4 plex but i am buying sfh. 

va homes have to pass va inspection.   i would research requirements.   has to be move in ready. 

i would look for home buying programs.   1st time home buyer.  military forgivable down payment assistance.   some states have some towns have some dont. 

be patient.  very tough one for me. 

i was considering using yellow letter to find deal mine came thru mls. 

one other mistake i made in past.   i had 2 other houses i sold.   i wish i would have more savings and been more frugal and kept both as rentals.   so be prepared to own this one for maybe 3 months while getting renter and still be able to buy one once you move.  tough part imo.  otherwise selling costs etc.  and you dont end up with much profit. 

Congratulations @Kirk R. I also wanted to purchase a duplex but I won't be able to in my market, plus I don't believe they would pass the VA inspection. What would those other programs help me in (maybe a silly question)?

I'm also trying to be patient but once I set my mind on something I normally jump in head first which isn't always the best approach.  

On those homes you sold did you not take the profits and but them back into other investments? 

Well I'm still fairly new but I can tell you the route I am looking to go. I am planning on using my VA loan to buy a house 0 down as well. However I am looking to buy a multifamily because with your VA loan (unless it has changed) you can buy up to a 4-unit house as long as it is owner occupied. So rent out 3 live in one is my plan to reduce my living expenses greatly and use the savings to help pay down the principle on the loan and invest back into growing and automating my wholesaling business to use that money to build my portfolio faster.

This is just the route I am looking to go and may not workout for you but it is an idea worth looking into. Also while wholesaling I am looking to grab any owner financed properties I can to add to my portfolio with little to no money out of pocket! I am actually looking to call back a lead tomorrow to try to work out a deal now for owner financing on a property that is already cashflowing. Good luck to you on your journey and I hope this helped.

If anyone see any flaws in my plan please let me know as I am definitely open to criticism. 

@Elizabeth Colegrove I love your strategy! it is the exact reason I wanted to get started investing here in Hampton Roads. The military always make for a good tenant as they get paid every month for sure and if one leaves there is guaranteed to be another to take their place. Real smart to price slightly below BAH as well because I know I always looked to have a little left over when I was looking at housing while I was active duty. 

We tend to appeal to the lower officers who are married and therefore want a house. Or the higher level enlisted who like our school districts and agaim like the house. We also buy in what are considered "****** little towns" where people don't want to have permanent roots. So this helps a lot with making their more "demand" than supply. we find staying in the "lower" ranks keeps it affordable for all. Know your base because most navy base require yu to be married or above and e5 or e6 to live off!

Originally posted by @Gary Alford :

Well I'm still fairly new but I can tell you the route I am looking to go. I am planning on using my VA loan to buy a house 0 down as well. However I am looking to buy a multifamily because with your VA loan (unless it has changed) you can buy up to a 4-unit house as long as it is owner occupied. So rent out 3 live in one is my plan to reduce my living expenses greatly and use the savings to help pay down the principle on the loan and invest back into growing and automating my wholesaling business to use that money to build my portfolio faster.

This is just the route I am looking to go and may not workout for you but it is an idea worth looking into. Also while wholesaling I am looking to grab any owner financed properties I can to add to my portfolio with little to no money out of pocket! I am actually looking to call back a lead tomorrow to try to work out a deal now for owner financing on a property that is already cashflowing. Good luck to you on your journey and I hope this helped.

If anyone see any flaws in my plan please let me know as I am definitely open to criticism. 

@Elizabeth Colegrove I love your strategy! it is the exact reason I wanted to get started investing here in Hampton Roads. The military always make for a good tenant as they get paid every month for sure and if one leaves there is guaranteed to be another to take their place. Real smart to price slightly below BAH as well because I know I always looked to have a little left over when I was looking at housing while I was active duty. 

That was my plan to purchase a MFR and live for free but I don't think its going to workout so I'm geared to purchasing a single family home. I was looking into wholesaling once I used my VA loan for my primary residence so I can use those funds to purchase more.

What exactly are owner finance properties (besides the obvious)?  What are the pros in finding these type of properties?

Originally posted by @Elizabeth Colegrove:

We tend to appeal to the lower officers who are married and therefore want a house. Or the higher level enlisted who like our school districts and agaim like the house. We also buy in what are considered "****** little towns" where people don't want to have permanent roots. So this helps a lot with making their more "demand" than supply. we find staying in the "lower" ranks keeps it affordable for all. Know your base because most navy base require yu to be married or above and e5 or e6 to live off!

 A little off subject but thats kinda crappy that you have to be E-5 or higher to live off base for the navy.  In the Air Force all you need is 2 years of service or E-4.

Good luck @Brandon Proctor . By no means am I an experienced investor, but I did just use my first VA loan last year. I think others have made some great comments, such as needing to meet requirements. It was hard for me to find a solid multifamily that had a unit open for me to move into, so I found a nice SFR for my wife and I. Not to state the obvious but the realtor made all the difference. If it's a not a good fit I would find someone who can better represent your needs. Also I love USAA, but they did take slightly longer to close than other lenders, just FYI.

@Brandon Proctor  talk to bankerS.   how i found mine was a mortgage broker.   he wasn't able to do my loan.  he referred me to another banker.   and oh by the way there is a il veteran program.  broker was not going to tell me about cause he couldn't offer it. 

other 2 i sold i made a little money but after paying 6-7% realtor commissions closing costs taxes etc etc etc.   never as much as i had hoped for.  one is in a really hot market would have been getting appreciation and good rent. 

here is the brain teaser.   you buy a house on va loan. you live in it. then you are restationed to (insert base here).   bankers will not count rental income on first house til after filing on your taxes fora while.   how do you buy another house and keep your first one? 

Originally posted by @Stephen Collins :

Good luck @Brandon Proctor . By no means am I an experienced investor, but I did just use my first VA loan last year. I think others have made some great comments, such as needing to meet requirements. It was hard for me to find a solid multifamily that had a unit open for me to move into, so I found a nice SFR for my wife and I. Not to state the obvious but the realtor made all the difference. If it's a not a good fit I would find someone who can better represent your needs. Also I love USAA, but they did take slightly longer to close than other lenders, just FYI.

There are also some nice SFR in my area too (wish there were more MFR). I probably won't try to purchase until I have a better grasp on the entire process and find the right property of course. It is nice feeling as if I'm finally getting the ball rolling though.

There is a real estate agent here in town who works with investors so I'm hoping he can help me out quite a bit.  

Well really it is a property that the owner owns free and clear and has no mortgage. So now they can hold the note themselves. For the seller it gives them a stream of cash flow and they do not have to worry about fixing toilets and such which I would believe is a big plus. sellers also can more than likely get more for the house than if they were looking to get the entire purchase price upfront. 

On the buyer side the deal can be as sweet as your negotiating skills allows it to be and if they are motivated then it could get pretty sweet. You might be able to get it with zero down and only come out of pocket with closing cost. You also can most likely get a lower interest rate. I have read of people getting as little as 1%. I myself am planning on trying to get it for 1.5%. 

This is how I see it from everything I have read and learned. Hopefully someone else who has actually done deals like this will chime in and clear up anything I may have wrong or not be seeing.

I do not know if you have started listening to the podcast yet but if not I would highly suggest doing so. It is so much information there that anyone no matter how long they been investing can benefit from.

Originally posted by @Kirk R. :

@Brandon Proctor talk to bankerS.   how i found mine was a mortgage broker.   he wasn't able to do my loan.  he referred me to another banker.   and oh by the way there is a il veteran program.  broker was not going to tell me about cause he couldn't offer it. 

other 2 i sold i made a little money but after paying 6-7% realtor commissions closing costs taxes etc etc etc.   never as much as i had hoped for.  one is in a really hot market would have been getting appreciation and good rent. 

here is the brain teaser.   you buy a house on va loan. you live in it. then you are restationed to (insert base here).   bankers will not count rental income on first house til after filing on your taxes fora while.   how do you buy another house and keep your first one? 

The guy that I spoke to today from VA said they also can offer mortgage rates (if i'm not mistaken) or go with another institution like Wells Fargo.

And to answer your brain teaser.....I don't know. Would I still be trying to use a VA loan?

Originally posted by @Gary Alford :

Well really it is a property that the owner owns free and clear and has no mortgage. So now they can hold the note themselves. For the seller it gives them a stream of cash flow and they do not have to worry about fixing toilets and such which I would believe is a big plus. sellers also can more than likely get more for the house than if they were looking to get the entire purchase price upfront. 

On the buyer side the deal can be as sweet as your negotiating skills allows it to be and if they are motivated then it could get pretty sweet. You might be able to get it with zero down and only come out of pocket with closing cost. You also can most likely get a lower interest rate. I have read of people getting as little as 1%. I myself am planning on trying to get it for 1.5%. 

This is how I see it from everything I have read and learned. Hopefully someone else who has actually done deals like this will chime in and clear up anything I may have wrong or not be seeing.

I do not know if you have started listening to the podcast yet but if not I would highly suggest doing so. It is so much information there that anyone no matter how long they been investing can benefit from.

 Ok I understand now for the most part, so the owner still owns the home but is financing it for the buyer to eventually purchase correct?  Seems like that could be a win win for both they buyer and seller.  How does one find these owners, where should I look?

I have been all over the podcast, I try to listen to one a day.

@brandon 

@Brandon Proctor  congrats on the loan approval. You just need to do the following: 

- know your goal for the purchase

- know your  buying criteria to reach that goal 

- know if your market supports that goal 

- if so, then speak to agent about your buying criteria 

- make offers

- get under contract

- do due diligence 

- buy 

- implement mgmt plan 

Originally posted by @Joe Fairless :

@Brandon Proctor my pleasure. And, FYI, if you haven't already I'd check out the 0% down VA loan - my dad is getting that one. I had no idea those things existed until he told me about them.

 Definitely that's also what I'm doing 0% down and going to occupy for the year so I can make it an investment property down the road. 

@Brandon Proctor  in your situation, I would find a duplex, tri, or 4plex that is priced right to allow you to live in one unit, and rent the others out to cover the mortgage, and ideally put money in your pocket.

Google down payment assistance that may be available in your area. In my local area buyers can get up to 15k for a down payment in exchange for signing an agreement to live in the property for a certain amount of time.

Ask your mortgage broker about any other special offers available to you, that might provide financial assistance, or reduced interest rates, or any other benefit. I am learning about a 203k loan which provides money for rehab costs, if needed

Good luck with the purchase, hope to hear more about it in the future

Brandon L., Real Estate Agent in VA (#0225225026) and NV (#181107)

@Brandon Proctor  congrats on the approval. I'd recommend that while you're looking around Zillow at night, be actively practicing your real estate math. I did that every week for about 3 months when I was first starting and it definitely paid off. 

Just find a few properties, run the numbers in excel or on the BP Investment Calculator and you'll eventually be able to smell a good deal very quickly. Best of luck!

Thanks @Tyler Flagg  ! It was awesome when they told me over the phone, felt like my journey was finally starting.  I am definitely on BP and Zillow all the time now trying to soak it all in.

I'm still trying to understand how to analyze properties and how to figure out how to actually know if I'm getting a deal or not. I know about looking up comps in the area and also finding ARV (which I don't know how to find) by calculating repair cost. I want to wholesale as well to help me with building capital for buy and holds.

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