The VA Loan Home turned into a STR via AirBnB

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The VA Loan Home turned into a STR via AirBnB

William M.
Rental Property Investor · Alpine, TX · Member since 2018 · 26 posts · 30 votes

Investment Info:

Single-family residence buy & hold investment in Bossier City.

Purchase price: $157,000
Cash invested: $8,000

I bought this house using the VA loan, required minimal follow on investment (just added a back patio and new A/C) currently AirBnBing it with an average gross of $2000/mo.

What made you interested in investing in this type of deal?

First Property

How did you find this deal and how did you negotiate it?

318 Real Estate (Shane Cheatham)

How did you finance this deal?

VA Loan

How did you add value to the deal?

Back Patio, Front Yard Landscaping

What was the outcome?

Currently listed on AirBnB and HomeAway/VRBO and produces an average of $250/mo in cashflow.

Lessons learned? Challenges?

Learned how to build up an AirBnB reputation, advantages and disadvantages of STR over LTR, challenges relate to property management of a STR are currently non-existent in the area and will transition to a LTR once I leave the area.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Shane Cheatham with 318 Real Estate, knows the Bossier/Shreveport area extremely well and is motivated to provide you with the right house for you!

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  • Brian Harker
    Member since 2019 · 20 posts · 12 votes
    6y

    @William McAdams Lenoir

    Hi, sounds like you made a great deal! I have a friend who wants to use his VA loan eligibility to buy an STR property, but he's concerned that he'll get in trouble he can't convince lenders or the VA that it is legitimately his private residence. Did you find any trouble using a VA loan for this investment, or was it pretty straightforward?

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  • William M.
    OP
    Rental Property Investor · Alpine, TX · Member since 2018 · 26 posts · 30 votes
    6y

    @Brian Harker Hey man! I actually bought the house in order to live there as my primary residence. After I failed to garner some roommates, I looked into Airbnb as a means to cut down on some expenses. There's nothing in the VA loan stipulations that prohibits renting you home out to roommates or doing STR as long as the residence is your primary residence for one year. But don't take my word for it! I suggest that your friend research the VA loan stipulations to make sure he is not breaking any of the rules: https://benefits.va.gov/homeloans/lenders.asp

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  • Brian Harker
    Member since 2019 · 20 posts · 12 votes
    6y

    @William McAdams Lenoir

    Awesome, thank you. I’ll pass that along!

    0Reply
  • Diamon Higgins
    Member since 2020 · 4 posts · 0 votes
    6y

    Hi William! Just had a couple of questions regarding your OP. I just wanted to make sure that you have to have lived in the property a year before putting it on Airbnb or did you list it shortly after moving in because you knew you would be living there for at least year? Also wanted to know if you where still thriving with your STR or if the VA has interjected in any way? I'm currently looking at condos in the Annapolis, MD area that I would like to be solely for STR at some point and just want to make sure it is indeed allowed using my VA loan. I saw on the military benefits site (https://militarybenefits.info/renting-va-home-loan/) that it's not allowed but I'm not sure if they are saying it's not permitted at all, or if it can be done after the year of primary residence and I can't seem to find an official article stating the actual guidelines so I'm unsure. Thanks in advance for your help!

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  • Brian Chupek
    Real Estate Agent · Annapolis, MD · Member since 2019 · 5 posts · 0 votes
    6y

    @Diamon Higgins what part of Annapolis are you looking at? Theres some new rules on STR's that may apply depending on where you are.

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  • Diamon Higgins
    Member since 2020 · 4 posts · 0 votes
    6y

    @Brian Chupek Minutes to USNA. So the guidelines are location specific? Do you know where I can go to read these guidelines? 

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  • Brian Chupek
    Real Estate Agent · Annapolis, MD · Member since 2019 · 5 posts · 0 votes
    6y

    @Diamon Higgins O-26-19 is the legislation. The below link should have what you need. It applies to wards 1-8 in Annapolis.

    I have a one page flyer from the mayors office thats a little cleaner to read I could forward to you via email if thats helpful.

    https://annapolismd.legistar.com/LegislationDetail.aspx?ID=3972977&GUID=83B49798-DA88-46A3-847B-59ADF9F302A5&Options=ID%7CText%7C&Search=rental

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  • William M.
    OP
    Rental Property Investor · Alpine, TX · Member since 2018 · 26 posts · 30 votes
    6y

    @Diamon Higgins @Brian Chupek Thanks for that info! 


    Diamon, to answer your question, I had lived in the house for 2 years before I started doing Airbnb full time. I did have Airbnb set up (part time) as a "Shared Space" house, so I was actually renting out the rooms to travelers while I was living in the same house. The VA never complained or gave me a warning and neither did my lender. The laws in Louisiana, that I researched at the time, did not have stipulations about STRs and it best fit under a "roommate" situation - where the living expenses are split versus rental income. It really wasn't until 2 years after I purchased the property that I started to make money off of the house as a full-time STR. Beforehand I was happy if it paid for my utilities.


    Brian, Thanks for the region specific info, you're right that it is all local laws dependent. My next STR project is in an area that charges 7% rental income tax for STRs (VRBO/AirBnB).

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