Army Veteran looking for financing options for investment properties
Member since 2022 · 15 posts · 3 votes
Hello everyone,
I am looking to buy my first investment property this year and looking to focus primarily on HUD voucher holders.
I am inquiring about different financing options that may be out there that I am unaware of. I already am using my VA home loan on my primary but was curious if there was any loan options for veterans specifically for investment properties. If not, what are some ways I could fund the start of my investment journey as I only have about $30k in liquid funds.
Any help would be greatly appreciated.
Thank You,
Nelson
Welcome to BP!
I’m active duty Air Force.
There’s a few options you have to fund your next project:
1. VA loan. If you have a qualifying event like, moving, divorce, growing family, etc., you can use your VA loan again. Yes, this would require you to move into the new home as your primary residence. This also depends on your remaining entitlement.
I have active three VA loans right now, and two of them are rentals but were once primary residences.
@Steven Santon can clarify anything I missed.
2. Secondary (vacation) Home. With these loans, you can purchase a home putting 10% down. Many lenders will require the home to be at least 50 miles from your primary residence. Then, you can run it as a short-term rental or long-term. If you go the short-term route, check out the book at Avery Carl: Short Term Rental Long Term Wealth.
3. DSCR loan. With a DSCR loan, you can find one that funds up to 85% LTV. Sometimes higher, but this is what might be considered typical. If you have a lower price point for a home, you can purchase a local property that might not need a lot of work and rent it out.
4. Joint venture. You can partner with another investor to purchase properties. Say, you find someone or a small group that also has $30K, this allows you more options and flexibility.
Right now, I'm forming a JV this month and preparing the paperwork with lawyers now.
There are many other options as well, but I wanted to list those that are most common. I wish you all the best.
Let me know if I can help further. I’m available available to chat.
Welcome to BP!
I’m active duty Air Force.
There’s a few options you have to fund your next project:
1. VA loan. If you have a qualifying event like, moving, divorce, growing family, etc., you can use your VA loan again. Yes, this would require you to move into the new home as your primary residence. This also depends on your remaining entitlement.
I have active three VA loans right now, and two of them are rentals but were once primary residences.
@Steven Santon can clarify anything I missed.
2. Secondary (vacation) Home. With these loans, you can purchase a home putting 10% down. Many lenders will require the home to be at least 50 miles from your primary residence. Then, you can run it as a short-term rental or long-term. If you go the short-term route, check out the book at Avery Carl: Short Term Rental Long Term Wealth.
3. DSCR loan. With a DSCR loan, you can find one that funds up to 85% LTV. Sometimes higher, but this is what might be considered typical. If you have a lower price point for a home, you can purchase a local property that might not need a lot of work and rent it out.
4. Joint venture. You can partner with another investor to purchase properties. Say, you find someone or a small group that also has $30K, this allows you more options and flexibility.
Right now, I'm forming a JV this month and preparing the paperwork with lawyers now.
There are many other options as well, but I wanted to list those that are most common. I wish you all the best.
Let me know if I can help further. I’m available available to chat.
Do not just focus on HUD, you should have an understanding of every strategy in real estate and use the knowledge like a tool box. You can use your VA loan for up to what the entitlement threshold allows you to.
Hello everyone,
I am looking to buy my first investment property this year and looking to focus primarily on HUD voucher holders.
I am inquiring about different financing options that may be out there that I am unaware of. I already am using my VA home loan on my primary but was curious if there was any loan options for veterans specifically for investment properties. If not, what are some ways I could fund the start of my investment journey as I only have about $30k in liquid funds.
Any help would be greatly appreciated.
Thank You,
Nelson
Good morning Nelson, love your enthusiasm about acquiring an investment property.
I'm an Army Veteran of 9x years, a RE investor, and a lender!
@Hamp Lee III provided some great insight and some potential solutions for you in this forum.
A majority of investment property's require you to put 20% down on the property (you can technically put 15% but would owe mortgage insurance). With the information you have provided you are searching for a $150,000 investment property if you can put down $30,000...
A couple of ways you can acquire more capital quickly...
1) Take out a HELOC against your primary property, use some of the funds to provide further funding for a downpayment
2) (if you have money in your TSP) you can borrow against that and set up a repayment plan to replace the funds you borrowed against at a low interest rate... I did this for one of my investment properties and it worked out well
3) Joint Venture / Syndication... just like Hamp alluded to, create an investment opportunity for other investments and raise capital that way
4) Move out of your current residence (The one you purchased with your VA Loan) and purchase another SFH or Multi-family property!
There are no special investment programs for veterans.. however, if you purchase a multi - family property with your VA loan and live in one of the units, you are allowed to do that! ... Depending on what state you live in, you may be entitled to special assistance programs well as an eligible veteran. Remember, if you have a 10% VA Disability rating, then you dont pay that VA FUNDING FEE.
Lastly, don't limit yourself to just the HUD Voucher Program tenants (although a good program and an underutilized one by investors)! Get with a great realtor to assist you in your search!
Let me know if you have any more questions!
-Steve
Welcome to BP!
I’m active duty Air Force.
There’s a few options you have to fund your next project:
1. VA loan. If you have a qualifying event like, moving, divorce, growing family, etc., you can use your VA loan again. Yes, this would require you to move into the new home as your primary residence. This also depends on your remaining entitlement.
I have active three VA loans right now, and two of them are rentals but were once primary residences.
@Steven Santon can clarify anything I missed.
2. Secondary (vacation) Home. With these loans, you can purchase a home putting 10% down. Many lenders will require the home to be at least 50 miles from your primary residence. Then, you can run it as a short-term rental or long-term. If you go the short-term route, check out the book at Avery Carl: Short Term Rental Long Term Wealth.
3. DSCR loan. With a DSCR loan, you can find one that funds up to 85% LTV. Sometimes higher, but this is what might be considered typical. If you have a lower price point for a home, you can purchase a local property that might not need a lot of work and rent it out.
4. Joint venture. You can partner with another investor to purchase properties. Say, you find someone or a small group that also has $30K, this allows you more options and flexibility.
Right now, I'm forming a JV this month and preparing the paperwork with lawyers now.
There are many other options as well, but I wanted to list those that are most common. I wish you all the best.
Let me know if I can help further. I’m available available to chat.
Thank you for the info! I appreciate it.
Hello everyone,
I am looking to buy my first investment property this year and looking to focus primarily on HUD voucher holders.
I am inquiring about different financing options that may be out there that I am unaware of. I already am using my VA home loan on my primary but was curious if there was any loan options for veterans specifically for investment properties. If not, what are some ways I could fund the start of my investment journey as I only have about $30k in liquid funds.
Any help would be greatly appreciated.
Thank You,
Nelson
Good morning Nelson, love your enthusiasm about acquiring an investment property.
I'm an Army Veteran of 9x years, a RE investor, and a lender!
@Hamp Lee III provided some great insight and some potential solutions for you in this forum.
A majority of investment property's require you to put 20% down on the property (you can technically put 15% but would owe mortgage insurance). With the information you have provided you are searching for a $150,000 investment property if you can put down $30,000...
A couple of ways you can acquire more capital quickly...
1) Take out a HELOC against your primary property, use some of the funds to provide further funding for a downpayment
2) (if you have money in your TSP) you can borrow against that and set up a repayment plan to replace the funds you borrowed against at a low interest rate... I did this for one of my investment properties and it worked out well
3) Joint Venture / Syndication... just like Hamp alluded to, create an investment opportunity for other investments and raise capital that way
4) Move out of your current residence (The one you purchased with your VA Loan) and purchase another SFH or Multi-family property!
There are no special investment programs for veterans.. however, if you purchase a multi - family property with your VA loan and live in one of the units, you are allowed to do that! ... Depending on what state you live in, you may be entitled to special assistance programs well as an eligible veteran. Remember, if you have a 10% VA Disability rating, then you dont pay that VA FUNDING FEE.
Lastly, don't limit yourself to just the HUD Voucher Program tenants (although a good program and an underutilized one by investors)! Get with a great realtor to assist you in your search!
Let me know if you have any more questions!
-Steve
Thank you, Steve for the great insight. From everything I have read and all the podcasts I have heard, you hear to focus on one thing. So I figured my "one thing" would be to help homeless Veterans find good homes through the HUD-VASH program. But I will keep what you said in mind and keep my options open as well. Thanks again!
Another option if you are up for doing a rehab is to start a BRRRR with a hard money loan on a distressed property. If it's your first rehab you will need 15% down of the purchase price and it can provide funds for the purchase and rehab.
Another option if you are up for doing a rehab is to start a BRRRR with a hard money loan on a distressed property. If it's your first rehab you will need 15% down of the purchase price and it can provide funds for the purchase and rehab.
Thanks for your response. How would I go about finding more information on that type of loan?
I'm also a Veteran and I've done point 1 in Hamp's post, using my VA to purchase a home to move into and rent the previous one out and also point 1 in Steven's post, either taking a 2nd out on your primary or cash out refi to purchase an investment and both have worked out nicely for my and my situation at the time. There are some creative financing solutions out there that I hear of and have read about but haven't done myself. Hard money lenders is one and was mentioned by Ash. I used to know a hard money lender but never used him, those loans typically hold a higher interest rate though. You can try to see if the seller is willing to do seller financing and again those will usually hold a higher interest rate and can be difficult if you're dealing with your average homeowner as most people would opt not to do that.