If you are set on buying downtown be sure to review your HOA policy prior to buying. A lot of HOAs downtown don't allow short term rentals ie. Airbnb, so make sure your numbers work when you buy for a full time renter to replace you after you move out as you mentioned wanting to do. San Diego also just passed a law to remove short term renters all together that goes into affect June 2019, but there is still time for that law to get revoked. Happy to help get you in touch with an agent, PMs etc if you need. Good luck!
The VA loan was designed for permanent residents to stay in that home for at least 2 years. Moving out after one year will not keep in line with those regulations. Now if you get a set of orders and have to move so you rent thats another story.
Also, you can only have one VA loan open at a time. You can refinance to a conventional mortgage and get another VA loan at a new property.
I hope that helps
@Shamar Seaforth good on you for begining your Real Estate journey. Like @Liz Boer said, short term rentals is a great way to house hack your mortgage. Definitely utilize this benefit while you can. Your goal should be to pay off 10-20% of your mortgage if you can, then refiniance into a conventional loan. This way you will get your FULL VA loan benefit back.
Contrary to what @Brian Mcmenamin said, you actually can have more than one VA loan out. However, you are limited to the ammount you have left to use. For example. I am stationed in Norfolk and I buy a $200k home before I PCS to Sandiego. If my limit is $649,750, I am only given $449,750 towards my next purchase. I will have to pay 10% on what ever the difference is from the purchase price. Does that make sense?
So it will benefit you to do as much house hacking as you can to reduce your loan. That way your numbers will work when you refinance, or if you chose not to refinance, you can recoup as much of your benifit back as possible. (Since you are starting out in a higher market.)
Hope that was helpful. You also may want to look into the HELOC method in hacking your mortgage down in a quick ammount of time.
@Mike Foster You are right. I did not properly explain myself. You cannot have more than one VA Loan open in the same duty station at once. You can buy one at your current duty station then PCS and use your VA loan again.
@Shamar Seaforth Here is a good article that gets into the specifics about halfway down the page.
Originally posted by @Shamar Seaforth :
@Mike Foster just to clarify i can use the VA loan for a house say $200K. Pay 30% of the mortgage down($60K). Cash out refinance into a conventional loan lets say the equity rose to $500k so since thereis $140k left that gets deducted from the $500k leaving me with $360k for anything else such as another property. All while closing out the first mortgage allowing my va loan to be tapped again??
Why pay 30% down if you're using a VA loan? IMO it defeats the purpose...just use conventional at that point. There's also a fee that is included in your loan with using VA. Our home was $195k and we ended up financing $200k due to the fee. Again, it seems pointless to use a VA loan if you're not going to capitalize on the 0% down. Either use VA and benefit from the no money down or use conventional if you're trying to get more equity/cash flow. In our situation, we ended up getting orders to Europe so we kept our property/VA loan and rented it out. It cash flows every month and it works.
Also, be careful about banking so much on the appreciation, that's some crazy growth you just mentioned!
@Shamar Seaforth , if the goal here is a airbnb or vrbo, you may be out of luck for san diego.
I'm thinking it will be difficult for you to buy and have it cash flow otherwise. Even with a va loan. Maybe that's why he wants to put 30% down?
Maybe. But then shouldn't he just do a conventional loan? No VA fee then.
Lots of misconceptions on this thread. You don’t have to stay owner occupied for 2 years, that would be impossible for military - as anyone in the military will tell you. You have to INTEND to occupy and it has to make sense that you can (orders to the area, for example) and if you deploy, or PCS, or anything else for that matter, you can rent it out.
Second - you can have two VA loans at a time, depending on how big those loans are. San Diego has a limit of 649,750. If you bought a place for 325k, you would have about half of your eligibility left for another VA purchase. There are some caveats, but there are ways to work it.
If you have any questions, I'm a Marine veteran with 15 years Lending experience in San Diego. I also run a VA home loans academy called Veterans One Academy dot org. If I can help in any way, just reach out!
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