Accidental Landlord Bleeding -$700/mo in Copperas Cove, TX (Fort Hood): VA Loan @

Accountant · Seattle, WA · Member since 2025 · 316 posts · 107 votes

1w

@Jeffrey Figueroa That’s a tough situation, especially since the original numbers depended on a property-tax exemption that disappeared once the home was no longer your homestead. It’s understandable why “wait another year or two” does not feel like a complete strategy when the property is costing you nearly $700 each month.

A helpful approach is to compare the total cost of each exit date rather than focusing only on the cash needed at closing. At $684 per month, holding for another 24 months would consume about $16,400 before maintenance, turnover, vacancy, or a major repair. Some of that is offset by principal paydown, but appreciation should be treated as a possible upside—not the plan. Ask your agent for written net sheets for three scenarios: selling now with the tenant, selling near the end of the lease, and selling once the property is vacant and ready for an owner-occupant. Run the later scenarios using flat or even slightly lower values so you can see the downside clearly.

Dropping the property manager could reduce the monthly loss, but only if managing from a distance is realistic for you. It does not fix the underlying gap between rent and carrying costs. The current lease at least provides predictable occupancy, although it also limits rent adjustments and makes a sale to an owner-occupant more difficult until the tenant moves.

The VA assumption is worth exploring because the small equity gap may make it easier for a qualified buyer to step in. However, a 5.99% rate may not be attractive enough by itself to create strong demand. It would be wise to speak directly with the servicer about qualification, timing, entitlement substitution, and release of liability, then find an agent who has actually closed VA assumptions around Fort Cavazos. A lease-option deserves more caution. It adds legal, financing, and tenant-buyer risk without materially improving the property's current economics.

A practical first step is to confirm the tax and escrow calculations, get a second rental opinion from another local manager, and obtain realistic net sheets from agents familiar with both investor sales and VA assumptions. If the likely cost of holding through 2027 is close to the amount required to sell now, taking a defined loss may be better than continuing to absorb monthly losses and operating risk. If holding is clearly less expensive, the lease gives you a defined runway to prepare for a vacant sale. Either way, your instinct to make the decision based on the numbers—not hope for appreciation—is the right approach.

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Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes

5d

It's unfortunate you're in this situation.

Thoughts on your options:

1) Sell Now
Bringing $30k to a closing will result in how much of an overall loss?

2) Sell when tenant vacates
If value stays at $280k, how much will you still have to bring to closing?

Also, how much will you need to spend after the tenant vacates, to put the house back in "pristine" condition to sell at highest price?

3) Lease-Option to Owner-Occupant
What are the chances a buyer will want to pay at least $286k and $2300/month?
Check the market with your agent to see if possible.

4) Lease-Option to Investor
What are the chances an investor will be able to find:
- A buyer willing to pay at least $286k and $2300/month, so they make money?
- A tenant willing to pay OVER $2300/month, so the investor can make the difference?
Check the market with your agent to see if possible.

Why can't you just find this buyer or tenant?

5) VA Assumption
Probably your best bet is to find an owner-occupant to assume your mortgage.

Hopefully, by doing so their property taxes will be lower.

The attraction would be your 5.99% interest rate vs today's going rates around 7% - otherwise, why wouldn't they shop for other houses?

NOTE: be sure you understand if an assumption will 100% release you of liability on the mortgage - you don't want the buyer to stop making payments and damaging your credit!

6) Short Sale
These were popular 2010-2014 and are starting to come back.

Your lender will have to accept and you will need to understand:

1) Negative impact on your credit
2) Income tax consequences on any forgiven debt amount

3) Repayment liability on any short sale amount.

One last thing - yes, you're losing almost $700 in cashflow, but how much of this is really a LOSS?
1) As you pointed out, $4k annually is reducing the balance of the mortgage

2) Assuming the other $4k annually is interest, how much of it are you writing off on your income taxes?

3) Same goes for property taxes and insurance.

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Minna Reid

Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 632 votes

5d

No investor is going to touch this anywhere near your numbers because they wont work for any investor, and an owner occupant can't buy this. I would wait the tenant out so you can sell to an owner occupant, which will minimize your out of pocket loss at close. If you don't have the funds to cover the loss, you may want to consider a short sale, but you really can't even do that until that tenant is out. The lender will also expect you to get close to market value, and no one will pay that and pick up your tenant with the property.

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Diana KhanPro Member

Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 403 posts · 162 votes

5d

Quote from @Jeffrey Figueroa:

Hey BP Community,

Looking for some candid feedback from seasoned Texas investors and anyone operating in the Fort Hood / Killeen / Copperas Cove market.

Property Overview:

Type: Single-Family Residence (4 Bed / 2 Bath, 1,827 sq ft) in Copperas Cove, TX

Purchased: July 2024

Financing: VA Loan originally ~$294k @ 5.99% fixed (30-year)

Current Balance: ~$286,000

Current Rent: $1,800/month (Leased through March/April 2027)

The Monthly Cash Flow Reality:

Gross Rent: $1,800

Property Management (10%): -$180

Net Rent Received: $1,620

Mortgage (P&I + Hazard): -$1,850

Property Taxes: -$454

Net Cash Flow: -$684/month (out of pocket)

The Tax Shock:

We originally purchased under the expectation of a 100% disabled veteran property tax exemption (Texas Tax Code § 11.131). When we relocated for work in March, we learned the hard way that § 11.131 is strictly a homestead exemption. On a rental property, it resets to § 11.22, which only knocks off a flat $12,000 from the assessed value, leaving us with a $454/mo tax bill that completely inverted our cash flow.

Our Agent’s Recommendation:

We spoke to an agent about selling. Her advice was:

Selling with an active tenant is tough because primary-residence buyers (VA/FHA) can't occupy within 60 days.

With comps around $265k–$280k, after 6% agent commissions, seller concessions, and closing costs, we'd have to bring $20k–$30k+ cash to the closing table.

She recommended "waiting 1–2 years."

The Problem:

Waiting 2 years burns over $16,400 in out-of-pocket cash bleed, while only paying down roughly $8,200 in principal. In Copperas Cove, where inventory is heavy and appreciation isn't guaranteed, we feel like waiting is just a slower, guaranteed way to lose capital.

Questions for the Forum:

VA Loan Assumption: How active is the market for VA assumptions around Fort Cavazos right now? At 5.99%, would an inbound service member be willing to assume this loan with an Entitlement Substitution, given there is virtually no equity gap to bridge?

Lease-Option: Has anyone successfully run a lease-option/sandwich lease in Copperas Cove to cover the negative spread until the market moves?

Hold vs. Cut Losses: If you were in our shoes, would you fire the PM, ride out the lease until spring 2027, and sell vacant—or write the check at closing now to stop the bleed?

Appreciate any insights or creative ideas you can share!

@Jeffrey Figueroa, I’ve worked with property owners in situations where the monthly loss made everyone want to move quickly, but I would slow down just enough to make sure the exit does not create a new problem.

Before choosing between selling, a VA assumption, or a lease option, I would put the current lease, loan documents, title information, and the servicer's written assumption requirements side by side. I would want to know exactly what you can do while the tenant is still under lease, whether an assumption fully releases you from the loan, and what obligations you would still have after any transfer. I also would not add a lease-option on top of the current situation until the existing lease and financing documents have been reviewed together.

I’d be glad to stay connected, @Jeffrey Figueroa. You already understand the numbers. At this point, I think the bigger question is which exit actually gets you out cleanly without trading a known monthly loss for a harder legal problem later.

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Ryan ThomsonBusiness Member

Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes

2d

I've done a few assumptions on VA loans in military markets and this situation actually has a path worth looking at before you decide to bring $25k to a closing table.

If that loan is a VA loan at a rate under 4.5%, the assumption angle changes the math completely. A buyer assumes your existing loan balance, whatever it is, and takes over the payment at your original rate. At Fort Hood especially, there's real demand for low-rate assumptions because a lot of buyers there are VA-eligible anyway.

The equity gap is the question. If you owe $240k and the home is worth $270k, a buyer needs to cover that $30k gap in cash or a second lien. That's a better position than you bringing $25k to sell. You'd walk away with nothing but you'd also stop the $700/mo bleed, which at 12 months is $8,400 you'd save versus waiting to save up for a traditional sale.

The tenant complicates it a little. VA buyers need owner-occupancy, so the assumption would need to close after the lease ends or if the tenant agrees to vacate early. Worth checking when that lease is up.

The other option people in your position miss: a non-VA buyer can assume a VA loan too, which opens the pool significantly. Your VA entitlement stays tied up until the loan is paid off (unless another vet assumes it and substitutes entitlement), but that's a future-loan consideration, not a now problem.

If you want to run the actual assumption numbers on that loan, DM me the balance and rate and I can tell you whether it's worth pursuing.

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Accidental Landlord Bleeding -$700/mo in Copperas Cove, TX (Fort Hood): VA Loan @

Accidental Landlord Bleeding -$700/mo in Copperas Cove, TX (Fort Hood): VA Loan @

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