Acquiring a second property strategy in Minneapolis
Good morning all,
So I bought my first property (4br 2bt) for 285 last November using the VA loan and its value has gone up since then and I am currently house hacking it. (Renting out the other 3 rooms).
My question is on how I should acquire my next property while holding on to this one?
I kinda wanna live here for 2 years to get the capital gains tax exemption and sell it around that 5 year mark. The issue is finding a loan I could use while keeping this property. Possibly heloc or cash out refinance if I can get one to get some down-payment money. Or refinance out of the VA loan to conventional and use the VA loan 0 down to get another. (I can only do this once though). I would love to hear any thoughts or opinions you have. Thanks!
Most Popular Reply
@Matthew S. Congrats on your progress so far. A few thoughts I have based on your post. #1 I don't think you can live in a property for 2 years, move out and sell it 3 years later, and still get a capital gains exception. @John Woodrich can answer this but I think your plan will need to be altered on this point. #2 Loan planning is important. As a Vet you have a tool others don't have (TYFYS). The problem is a loan officer did not share with you guidelines that affect your future loans and because of that, you chose to use your VA loan on an SFR instead of waiting to use it on an MF. Long story short because I can't get into all the guidelines at the movement but you either cost yourself money or you increased your minimum down payments by using the VA loan first. If you do decide to sell this property do not use your VA loan first, if it's an MF you should start with an FHA loan, then transition into a VA on the next property. If it's an SF as this one you should go conventional 3% down, then FHA if MF, and then VA if MF. If all SF then I would need more info to calculate the best plan. Reach out if you ever want to grab a coffee or zoom and talk investing.