Is this a good idea how to start or no?

9 Replies

Greetings everyone! My name is Ian and I am a veteran. I just got out of the Navy June of 2019. 

I am planning to buy a house using the VA loan. I was thinking on living in it while renovating it at the same time. I know that you need to live in it for a year before you can sell it. Im thinking about after renovating it, i will refinance it using other loan, then selling it. That way i can sell it without waiting for a year and i can use another va loan. I know that typically, theres a 400k limit that you can use on VA loan. I have decent savings right now but id rather put 0 percent down thats why i want to use VA loan. I am tired of working 15 hours a day so i really want to start flipping houses. I know you technically cant flip houses using VA loan but if you know any loopholes in the beginning, please let me know.

Here are my problems, I am currently renting in an apartment and my lease is till February 2020. And i do not have a 2 yr employment history because i just got out of the navy. Other than these two i think im set to get a loan. I have decent savings, no debt, and good credit score. Any advice?

I'm just learning about flipping houses (in the education mode) so I don't have experience with rules and regulations. However, I checked with my husband who served six years in the United States Air Force and he says that you are considered a government employee while in the military, and that employment is certainly verifiable! Also, if you find out there are too many restrictions with the VA loan, why not team up with an investor for your first flip? If you have great credit, that would be a win-win. Establishing a relationship with a great investor seems like a positive step to take. Any way, that's my two cents. Good luck! :)

@Ian don't try to game the game with the VA loan, mortgage fraud is no joke, and misusing the benefit is a surefire way to make the restrictions worse for veterans.

That being said, why not buy a duplex/triplex with the VA loan, do some work to it (or buy with the VA renovation loan) out the other units so you get to live for free, and then sell if in a year.

The VA won't approve a property that needs enough work to be a solid flip regardless...the VA renovation loan might, but similar occupancy rules apply.

Morning Shipmate,

I've done a version of this twice. I consider both of them a success although my goals were different then yours and I was just getting started and had no expectations. I've learned that VA loans are very cool if you meet the requirements and can get a house UNDER CONTRACT/CLOSED. Find an agent who has used them and understands their intricacies. VA appraisers will look at a house differently then standard appraisers, and as a result the deal will be harder to close.

My first house was a foreclosure in a very nice Arizona golf neighborhood. My wife and I purchased at the bottom of the crash roundabout 2012. This house went VA because the bank allowed us to finance this way and the property was in perfect condition. We offered 220 to their 245 and they took the deal. The comps in the neighborhood were all in the low 300s. We lived in the house for about 3 years as I finished my degree at the UofA and the property values continued to rise. The money we made was from appreciation as there was nothing I could really do to add value to the house. Also, we didn't pay tax because we lived in the house for at least two years.

We took the profits from house One and put money down on house Two. This house was also a foreclosure. It wasn't beat up or missing anything so it was good for a VA but It needed a lot of little touches to make it more presentable and turn key ready. We lived in this house for the next two years as I made all the improvements. Sold this house in 2017ish and moved on to a rental. We tried to find a 3rd property but things have changed enough that it just didn't work. Back to the drawing board.

The VA is difficult to use in the fast paced flipping game. However, I see it as a great way to live in a fixer upper for a few years and make a chunk of change when you are ready to move on. Talk with your agent and explain what you want because this really requires the "right" property. Talk with your tax professional so you make the most on the back end. If you have any more questions, shoot me a message and we'll find a way to go through all the particulars.


Dave Barton

If you're going to live in it, you might consider the FHA loan. If you can get as little as 3.5% as a down payment that might be more workable for you. (Obviously the 0% down is more attractive, I'm just not as familiar with the rules & regs behind it)

@Ian Jayne Pallasigui The VA will be more strict on the condition of the property (must be livable and move-in ready). This will make it difficult to force appreciation with renovations. Make sure you are not gambling on appreciation... any slight downturn in the market will likely put you underwater.

I agree with David on picking up a multi-family (up to 4-plex with VA loan) will be the best way to use your VA loan.

If you were in your lease before you got out of the military and are looking to break the lease in order to buy a house... Check your lease for a military clause addendum and check your state laws. I’ve seen some clauses where retiring or getting out of the military carries the same lease termination benefits as a deployment or PCS.

Best of luck!

Lot's of great information about the live in flip. It is certainly a great way to start building your wealth. I would look through the forums that are discussing live in flips. Wishing you all the best! 

@David Pere you are exactly right. It is important to follow the VA rules. Only prior service and current service members can get a VA home loan. And it is a great way to buy your first property. I used it in order to buy a triplex fixed up two units because the occupant in the last unit wouldn't let me fit their unit up. So now I am looking at other things I can do not that I have moved out of it. Rules state you only have to live in it for a year.i am also now out of service and would have more properties if I did not go threw a nasty divorce. But sometimes you do what you have to in order to make things better in the future. So I. Some ways I am starting over a little. Glad to say I got all assets in the divorce though. So it's just a matter of rebuilding the capital to invest again.

always ask how you can use things like the VA home loan to your advantage. They are saying that they will be rolling out a new VA home loan that you can use in order to rehab a property. I am currently looking for more information on it.