Hello BiggerPoeckets, my name is Luis Castellanos from Chicago, IL and I'm new to BP. In 2014, while transitioning from the military, I decided it was a great idea (without any knowledge and/or experience in real estate) to use VA loan benefits to purchase a multi-family property, which I house hacked (live in one unit, collect rent on the other two units). Fast-forward to today, it has proven to be the best decision I've made in my life. The neighborhood where I bought has become one of the trendiest in the city, and I've built a healthy equity on my property. I would like to ask fellow BP members for ideas on how to approach my next move. Some of the things I've thought about are:
- 1)Sell my current property, collect the equity, use VA loan benefits to purchase another similar deal, and use the equity to finance more deals.
- 2)Cash-out refinance and use the money to finance another deal and keep current property.
- 3)Take out a HELOC to finance my next deal and keep current property.
I’m leaning towards number one, however, I open to other ideas. Thank you all in advance, I love BP and I appreciate everyone’s help.
@Luis Castellannos #2 all day. Get out of the VA loan and into a Conventional loan so that you can use your VA benefit to purchase the next one. Of course this is only assuming the numbers work with the rental income vs expenses.
Best of luck and TYFYS!
Zack Karp thank you, that's a great idea and will definitely look into it.
Alina Trigub thank you, growing my portfolio is the my number one priority, you're totally right.
Michael Dang thank you, great to see you have applied this strategy successfully. VA loans are great, and that's why I've been trying to find a way to close my current and finance my next deal with a VA loan again. Zack Karp gave me a great idea on how to do just that. Thank you all once again.
Hi Luis, welcome to BP and thank you for your service! As echoed above, refinancing into conventional is likely your best bet. Depending on your plan moving forward, you might not even cash-out refinancing and rather just rate/term refi. Well done on making the move in 2014 and setting yourself up here!
Michael Facchini, thank you for your advise. I totally agree, I actually took advantage of VA rate reduction program in 2016 and currently have an ridiculously low interest rate, which I would really like to keep. However, the reason I wanted to take advantage of the cash-out refi and into a conventional loan is, to have extra cash in hand in the case a good deal pops up in my radar, and if possible utilize the VA loan on another deal.
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