How to invest in real estate with no or low money down

2 Replies

I am currently reading the "investing in real estate with no or low money down" book. so far its a good book. It's awesome to see a strategy in there that i am currently trying out. I thought about using my VA Loan to purchase the home i live in and then posted a forum asking could i use it to invest. i received great support and feed back. i then bought the book and seen it in there.

@Ronald Harris

VA Loans are probably the safest way to invest with no money down that I can think of.

There are a few caveats that I know of though, nothing major but:

1. You must occupy the property for at least a year after purchase. VA will make you sign stating that you will occupy for a min of a year during the loan process.

2. Once you leave the property and rent it out, those funds are still tied up and go against your VA benefit. Once the benefit is exhausted you'll have to use traditional financing.

3. On the bright side, if you sell traditionally the VA loan will be paid off and you will have those funds available in your VA benefit pool once again.

4. One must first qualify and actually have a VA benefit, it's not really open for everyone. Only military and their dependents I believe.

5. I doubt you will be buying any fixer uppers due to the stringent VA inspectors. This limits your pool to Pretty Houses that are habitable.... IF this is what your going after then great!

6. If you must occupy the home for a year...  that means you can only buy 1 per year.

7. If you buy a new house every year, that means you have you move all of your belongings every year...  If your down with that, then great!

One major PRO is that even though the property is 100% financed, you still will not have to pay for PMI. This is a major win to help the property cashflow better.

Second PRO is I think you are pretty much guaranteed the loan if you have not exhausted your benefit amount.

Third PRO is your only out of pocket would be closing costs...  unless you negotiate for the seller to pay those...  With low out of pocket expenses you can get some really nice cash on cash returns.

Hope this helps...


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