New Veteran Looking to House Hack—What Do You Wish You Knew Starting Out?

Question

Hey everyone,

I’m a veteran who’s looking to buy my first investment property and house hack using my VA loan. I’m still pretty new to real estate, so I’m trying to learn as much as I can before I jump into my first deal.

Other than using the VA loan, what advice would you give someone who’s just getting started? Is there anything you wish you knew before buying your first duplex, triplex, or fourplex?

I’m hoping to build long-term rental income, so I want to make smart decisions from the start instead of learning expensive lessons later. If there are any books, podcasts, YouTube channels, or just personal experiences that helped you, I’d really appreciate it.

I’m looking at properties around Las Vegas, but honestly any advice is welcome. Just looking to learn from people who’ve already been where I am.

Thanks everyone!

Eric Fernwood · Answer

Hello Sergio,

I am also in Las Vegas, and my comments are based on 17+ years of delivering more than 600 investment properties.

My main advice is simple: do not trust the numbers presented to you. Verify everything yourself. The property you think you are buying and the property you are actually buying can be very different. In 17+ years, I have never seen an investor sell a well-performing multi-family property. Every investor-owned property I have seen sold was losing money because of tenant problems, deferred maintenance, or both. Some examples:

• Area evaluation: When I evaluate multifamily properties, I ignore the financials provided by the listing agent and rebuild them from the ground up. I talk with tenants, maintenance workers, the mail carrier, and police officers who patrol the immediate area.
• Published unit rent inconsistencies: A listing agent once showed leases stating that all four tenants were paying $900 per month. Doing my own due diligence, I offered one tenant $50 to tell me what he was actually paying. He told me tenants could pay $900 by check or $500 in cash. At $900 per unit, the property was a good investment. At $500 per unit, it was a money pit.
• Maintenance cost validation: Another listing agent showed me (supposedly real) maintenance records indicating less than $2,000 in maintenance for the previous year. When I talked with the tenants, I learned there were significant (leaking) roof problems, electrical breakers that frequently tripped, and major plumbing issues. An older property will likely need all major systems replaced.
• Sewer: Many older properties have clay sewer pipes that may need to be replaced. For one multifamily property I evaluated, the sewer replacement estimate was $40,000. You need multiple specialized inspections to understand the property’s actual condition and potential repair costs.
• Tenant segment issues: Another major consideration is the tenant segment these properties attract. The average tenant stay was about nine months. Property damage and vandalism were common, evictions were frequent, and leases often meant very little. For example, a client purchased a 25-unit apartment property despite my warnings and now averages three evictions per month.
• Other’s experience: We have completed more than 90 1031 exchanges, many involving the replacement of multifamily properties. We just finished exchanging one multifamily property for six replacement properties. We are also replacing seven more Las Vegas multifamily properties through 1031 exchanges. The owner is tired of losing money and dealing with never-ending tenant problems.
• Location issues: Many multifamily properties are in higher-crime, distressed areas. Drive out to the 4-plexes on East Desert Inn Rd. Visit it yourself at different times and observe what is happening around the properties.

Area evaluation: When I evaluate multifamily properties, I ignore the financials provided by the listing agent and rebuild them from the ground up. I talk with tenants, maintenance workers, the mail carrier, and police officers who patrol the immediate area.

Published unit rent inconsistencies: A listing agent once showed leases stating that all four tenants were paying $900 per month. Doing my own due diligence, I offered one tenant $50 to tell me what he was actually paying. He told me tenants could pay $900 by check or $500 in cash. At $900 per unit, the property was a good investment. At $500 per unit, it was a money pit.

Maintenance cost validation: Another listing agent showed me (supposedly real) maintenance records indicating less than $2,000 in maintenance for the previous year. When I talked with the tenants, I learned there were significant (leaking) roof problems, electrical breakers that frequently tripped, and major plumbing issues. An older property will likely need all major systems replaced.

Sewer: Many older properties have clay sewer pipes that may need to be replaced. For one multifamily property I evaluated, the sewer replacement estimate was $40,000. You need multiple specialized inspections to understand the property’s actual condition and potential repair costs.

Tenant segment issues: Another major consideration is the tenant segment these properties attract. The average tenant stay was about nine months. Property damage and vandalism were common, evictions were frequent, and leases often meant very little. For example, a client purchased a 25-unit apartment property despite my warnings and now averages three evictions per month.

Other’s experience: We have completed more than 90 1031 exchanges, many involving the replacement of multifamily properties. We just finished exchanging one multifamily property for six replacement properties. We are also replacing seven more Las Vegas multifamily properties through 1031 exchanges. The owner is tired of losing money and dealing with never-ending tenant problems.

Location issues: Many multifamily properties are in higher-crime, distressed areas. Drive out to the 4-plexes on East Desert Inn Rd. Visit it yourself at different times and observe what is happening around the properties.

Summary

You may imagine buying a property, living in one unit, and renting the others so you can live for free. The reality may be very different. You could spend much of your time repairing units, losing money, dealing with tenant problems, and fixing the same damage again after the next tenant moves out.

Every claim, number, and assumption should be ruthlessly validated before you buy.

Jaren Lerner · Answer

Unfortunately, Las Vegas is very challenging to house hack unless you're willing to buy a SFH and rent out the additional rooms, but then you need to deal with having room mates. There's basically no duplexes, so your options are a 4plex (generally in bad areas and mostly 1/1 or 2/1 units) or buy a SFH with adu/casita, though the cost will be much higher and the numbers likely won't be great.

Drew Sygit · Answer

You won't know everything you need until you've done it several times!

There will always be some, "trial by fire" - hopefully you won't make those mistakes again:)

Thoughts:

1) Know how to screen applicants and inherited tenants

2) Find a federal & state compliant rental application now - or do your research on the multitude of screening companies to pick one now.

3) Find a federal, state & locally compliant lease.
- Google search and find at least 3 you can copy & paste to create your own. This will FORCE you to learn all the lease clauses!
- THen have an experienced real estate attorney review & approve.
- I still download leases when I come across them to peruse and see if anything worth "borrowing" for our lease.

4) Research the local eviction process, download & understand whatever notice of nonpayment your local area uses. - Be prepared to send as soon as a tenant is late.

5) Understand you MUST train tenants or by default, they train you!- NEVER pick up rent, too dangerous and bad precedent.

6) Figure out NOW where & how you will advertise vacancies.

7) How will you respond to inquiries and schedule showings?

8) Start looking for a local handyman now. Ask local real estate offices.- Make sure they at least have liability insurance.

Wale Lawal · Answer

@Sergio Chavez

VA loan is a wonderful financial instrument. However, your greatest strength will be in choosing the right property to invest in rather than in securing the right funding. The main thing to learn is how to conduct deal analysis, maintain a sufficient cash cushion, and never overlook tenant screening - this will prevent you from very costly mistakes.

Good luck!

Aaron Zimmerman · Answer

Vetting inherited residents. You need to know who's living there and what their situations are

Also any deferred maintenance items are important to know so you have enough cash

Stephen DeThample · Answer

Parking is my #1 issue when helping clients find a place. You always want extra parking spots.

Ray Williams · Answer

Congrats on getting started, and thank you for your service. I underwrite these for a living, and one thing that hasn't come up in this thread yet is how VA actually treats a multi unit purchase like this, worth understanding before you start writing offers. VA will finance a 2 to 4 unit property with zero down as long as you occupy one unit, and unlike FHA, VA does not run a self sufficiency test on 3 and 4 unit properties. FHA requires the net rental income from the other units to cover a big chunk of the mortgage payment before it will even approve a 3 or 4 unit purchase, and that test knocks a lot of properties out of contention. VA skips it entirely, so a property FHA would reject on paper can still work with a VA loan. You can also count a portion of the other units' rental income toward your qualifying income, usually seventy five percent of the lease income or the market rent from an appraiser's comparable rent schedule if units are vacant, which can support a bigger purchase price than your W2 alone would. On the funding fee, first time use is the cheapest tier at 2.15 percent financed into the loan, and it is waived entirely if you carry any VA compensable disability rating, worth confirming with the VA before you close if that applies to you. Full entitlement also means there is no real loan limit tied to a specific dollar cap in most counties anymore, so a pricier triplex or fourplex is still doable at zero down if the rest of the numbers work. Good luck with the search in Vegas. Truth of the matter, as a Veteran myself, you have literally the best loan out there for starting your journey. Zero down, no PMI, finance 2-4 units, rates lower than anything else. Don't overthink it, just do it.

Andrew Carter · Answer

Learn as much as you can atleast 6 months before purchase. Figure out what your ideal situation look like, play it out in your head and on paper. Take advantage of the free advice you have in the forums. Ask many questions to prepare as much as possible.

Decide whether you want to pay any of the mortgage or only depend on tenants to pay, that should help to determine the amount of doors you seek.

Stay on top of the numbers, they need to work for your intentions and needs.

Take advantage of the free VA money. Great way to start.

If you are living with loved ones, make sure they are good with house hacking and having others living on the property.

Tenants are not always great, no matter how much you vet them. Understand what living with others could look like, i.e. are on a floor below a tenant with children running across the floor constantly...are you going to allow pets? if one tenant has a pet, they all will atleast want to know they have the option to have a pet...

Just some things to think about, in addition to all the other advice from others.

Ashish Acharya · Answer

Thank you for your service, and a VA loan house hack is a great way to start building this out.

On the multiunit side, only the units you rent out get depreciation and expense deductions, the unit you occupy doesn't qualify, so get that split documented from day one based on square footage or unit count, that's what protects your depreciation basis down the line. VA loans also come with an occupancy requirement, usually 12 months, before you can move out and rent the unit you lived in too, worth confirming that timeline before treating the whole property as a straight rental for tax purposes.

Since Nevada has no state income tax, that's already working in your favor on whatever rental income this generates. Get a cost segregation study done once you close too, duplexes, triplexes, and fourplexes usually have enough separable components across multiple units to make it worthwhile even on a first property.

Happy to connect!

New Veteran Looking to House Hack—What Do You Wish You Knew Starting Out?

New Veteran Looking to House Hack—What Do You Wish You Knew Starting Out?

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