First Investment Property with my VA LOAN!

First Investment Property with my VA LOAN!

Real Estate Agent · Dallas, TX · Member since 2016 · 432 posts · 341 votes

Heads up - I cross-posted this from the success stories forum so if that's not allowed please delete this. I'm just looking for more of a response/feedback. Sorry!

 I've been on Biggerpockets for about 10 months now and I can finally announce that I've completed my first investment deal! A lot has changed in the past year (I've got my real estate license and have moved which caused my first purchase to be delayed) but it's all worked out for the best. I'll provide details below and I would love to hear what people think in terms of the "numbers"

Duplex in East Plano, TX

3/2 BA 1500sq ft each side

285k purchase (was OFF MARKET so I didn't end up in a bidding war, thankfully!!)

Turn key - although I put about 3,000 into some minor cosmetic updates - mainly replaced an old sliding door with french doors to the backyard

Purchased using my VA loan at 3.75%

One side is currently rented at 1400/mo until February and the house around the corner just rented for 1600 (3/2 1500 sq ft too).

Other side I'm living in with my own bathroom while two roommates upstairs are paying 600/mo + splitting utilities.

At closing I actually got a check back for roughly 1200 after earnest money was $2,000 so I got into the property for $800 plus my cosmetic fixing costs.

Current rent as we stand is 2400 and mortgage is 1796... I got over 50 emails on craigslist for the two rooms upstairs at 600/ea so I know that I could get a little more there - and the rent on the other side can definitely be increased over time. What I'm hoping to do or what my goal is, is to lease individual rooms on both sides to college students (it's close to a community college nearby and college as well) and maximize my return. I'm living with two people currently and when I move out I plan to rent out the master bedroom (with it's own personal bath) for even more than, lets say $650 (getting $600 now) for the two rooms upstairs that share a bathroom. Ultimately I know I can get at least $1800-2000 a side if I lease out the rooms individually or I can get $1600 a side if I just rent out the entire side. I would love to hear anyone's thoughts on renting out individual rooms versus the entire one side of a duplex.

In the end I'm currently taking home 2600/mo with an 1800 mortgage all while living free (I was paying 1100/mo for rent previously!) and when I moved out I'm looking to potentially take home $3200-$4000 a month. I've been awfully active on the forums here and have learned so much in the past 10 months. I'm hoping to continue to do this process with my VA loan and am excited for whats to come! Any feedback/comments are greatly appreciated!

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Zack KarpPro Member
Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
9y

Great numbers, great job!

See this reply in the discussion

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  • Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    9y
    Sounds like a good deal to me, just remember to account for maintenance, vacancy, capex etc. your profit isn't simply your rent minus your mortgage.
  • Zack KarpPro Member
    Lender · Schaumburg, IL · Member since 2015 · 833 posts · 774 votes
    9y

    Great numbers, great job!

  • Lexington, SC · Member since 2016 · 10 posts · 5 votes
    9y

    That's awesome, man! I just did my first deal myself this summer and am house-hacking a duplex as well, here in Columbia, SC. I'm curious — how long had you been in the military to take advantage of your VA loan? I went conventional financing with my duplex but am in the Army National Guard so I'd like to use a VA loan at some point. Are there restrictions with the loan regarding owner-occupancy?

  • Kerry BairdPro Member
    Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
    9y
    Way to go! There are hills and valleys, but it is a pleasant path...stay the course.
  • Investor · Norman, OK · Member since 2017 · 101 posts · 34 votes
    9y

    @Kenneth McKeown

    Great job on acquiring and managing that place.  If I could provide a suggestion from experience is to find a student that would like to take the lead in renting out the whole space on each side.  I had a student who rented our master bedroom, she was responsible for renting the whole place, and she got two of her friends to rent with her.  She lived in the bigger/nicer room for nearly free and had two of her friends living with her that made it very easy.  We never had an issue in this way.  We used to rent rooms individually and people were not staying long as they didnt get along with the others or respecting house rules.  I cannot recommend more than to have one person take the lead and the financial responsibility (even if you collect a little less).  

  • Rental Property Investor · Thousand Oaks, CA · Member since 2017 · 147 posts · 48 votes
    9y
    Congrats! Super inspiring!
  • Investor · Warsaw, IN · Member since 2012 · 61 posts · 36 votes
    9y

    @Kenneth McKeown congrats on your first investment! I did the exact same thing with my first investment. 1300 sq ft duplex (each side) with 0% down on a VA loan. I've had it for 5 years and have had only $1000 in repairs and the same tenants living in it since I moved out. Sounds like yours is well on its way to doing the same.

  • Real Estate Agent · Dallas, TX · Member since 2016 · 432 posts · 341 votes
    9y

    @Kirk Olson so what has happened since your initial investment five years ago? Would love to hear your story!

    @Jason Turo I actually have a tenant now that I've grown comfortable with just by living with her for the past month and that would be a great idea. I feel bad kicking the family out next door (woman and her fiance and 3 kids). Their lease ends in February and that's not really a great time to be leasing for college students so I haven't fully figured that one out yet.

    @Franklin McGuire I spent four years in the Marines from 2008-2012 and was moving around so much for college that I didn't have the income or ability to purchase a home. I'm 28 now so still young but not as young as I wish I was making my first investment property purchase. I'm hoping to get 3-4 in the next three years at the bare minimum. 

    @Caleb Heimsoth I made sure of that moving in that a majority of the big ticket items were taken care of (roof replaced a year ago, foundation has had no issues in it's entirety and the foundation was cleared by an engineer). One of the AC units will have to be replaced within the year probably but I'm hoping it quits working and is covered under my home warranty I was given, but other than that it's very minimal in terms of expenses.

  • Investor · Warsaw, IN · Member since 2012 · 61 posts · 36 votes
    9y

    @Kenneth McKeown The first year I took the $1100/mo I rented the other side for and stashed it away in it's own bank account and when I separated from the Army and moved to Indiana I had $13,000 in a bank account which was used to buy three single family homes.  They are not doing as well as the duplex but they are on 15 year notes and the area is HOT right now, so I'll be looking to sell one at the end of this month and the other two over the next year.  A year later I purchased a 4 unit building and currently I'm trying to beat a seller of an 8 plex and a separate seller of a single family and a 4 plex down to a reasonable price.

    Since your a veteran as well, you can see it below, but I'm working on building a resource for current and past service members to help them use their unique lifestyle and benefits to build wealth.  The first articles will be launching next Monday and it will mainly be focused on real estate but not exclusively.

  • Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    9y
    Originally posted by @Franklin McGuire:

    That's awesome, man! I just did my first deal myself this summer and am house-hacking a duplex as well, here in Columbia, SC. I'm curious — how long had you been in the military to take advantage of your VA loan? I went conventional financing with my duplex but am in the Army National Guard so I'd like to use a VA loan at some point. Are there restrictions with the loan regarding owner-occupancy?

     National guard is 6 years  https://www.valoans.com/articles/military-service-requirements

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