Rental Property Investor · Austin, TX · Member since 2017 · 20 posts · 4 votes
Im planning on buying my first property this year but dont know if its more beneficial to use my VA benefits or just go conventional especially since im thinking about using the BRRRR method. Any advice would be amazing thank you!!!
Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Jesthen Baez Good for you for getting started. Dig deeper on the VA loan as I believe you have to live in the asset for 1 year prior to moving on to your next loan/home. That said, you could do a 2-4 unit and live in 1 unit and rehab the rest... then reposition after a year. If you can do something like that, that would be an amazing start. To get a conventional investment loan, you will need more to put down and larger reserves. Depending on the scope of the rehab, I would consider doing a fix-flip loan then refi into a conventional loan. You can read more in this article here.
Real Estate Agent · Dallas, TX · Member since 2016 · 432 posts · 341 votes
6y
@Account Closed numbers can still work from occupying a property. A VA loan 0% down will far outweigh a 3.5% FHA and a 3-5% conventional offer. Your rate will be better than those two mentioned and you'll have no PMI with little to no invested. Also - VA loans, or just owner occupied loans in general, are a quick way for someone to immediately start building equity. If buying a house truly cost 20-25% down - home ownership % would be dismal.
@Account Closed numbers can still work from occupying a property. A VA loan 0% down will far outweigh a 3.5% FHA and a 3-5% conventional offer. Your rate will be better than those two mentioned and you'll have no PMI with little to no invested. Also - VA loans, or just owner occupied loans in general, are a quick way for someone to immediately start building equity. If buying a house truly cost 20-25% down - home ownership % would be dismal.
You must be a VA Loan specialist. I'm not disagreeing however my word of caution is that it's not always that simple. If one has access to it then use it. But don't forget to run the numbers. You will using more debt which will equal more debt service. Also the zero equity will disrupt the BRRR strategy unless you can somehow force equity onto the property and refi. However when acquiring a VA loan they have much higher standards for the types of properties you can purchase with it. This means that if it's in serious need of repair, which would be an opportunity for a flipper you may not even be able to get approved for the loan. E.g. the deck needs to be repaired.