New Investor in Northern Virginia

[Jack N.]

I have a few strategies I've been thinking about but want to know what other people have done in Northern Virginia and what else is possible. 

Here are a few options below that I've been thinking about:

1. House hacking - Buy a $500k-$600k townhouse and rent a room out for $700-$900. This would be a great start for me and would help keep my DTI low and save for rentals down the road.

2. Buy short sale, Foreclosed, or REO - RealtyTrac constantly has homes that have 100k+ of equity when they foreclose, meaning that the bank only has to cover themselves on whatever the rest of the loan amount is. I assume buying a foreclosed house on the courthouse steps of Fairfax County is very competitive and is unlikely that I find a good deal. Does anyone have experience doing this in Fairfax County?

3. My SO is a Realtor and has a large farm of townhouses that she mails to regularly. I was thinking of sending a letter to those houses stating that we are investors and will buy their property if it is in need of upgrades etc. This market is super competitive and if it went on the market it wouldn't really work so I would have to persuade the homeowner to let me buy their place. We almost got a deal this way but another investor was already on top of it for a flip. I was thinking of using an FHA 203k loan to cover the repairs and if the deal made sense I could gain equity.

Are there any other strategies that work in Northern Virginia? Also, if there are any lenders that are experienced in FHA 203k Loans I would love to gain insight!

[Adrienne Green]

Hi @Jack N.! Your three options are all feasible here. Like Russell said, 203k loan would be tough to do in the current market. 

The first option of house hacking would likely be the easiest to get off the ground. You could do it with any type of housing, not just the townhouse situation you detailed. But I think it'd work fine in that scenario. Note that there are local ordinances limiting the number of unrelated people who can live in a house, usually to 4. Stay at 4 or under inhabitants and you should be fine.

Regarding your Choice 2, expect competition for those homes. As far as auctions on the courthouse steps, those are typically cash buys. So you'll need cash or a pre-existing line of credit from elsewhere.

Regarding your 3rd option, again expect competition, but that doesn't mean it's not worth doing. If she's already mailing this neighborhood, it can't hurt to include this in the marketing.