All Forum Posts by: Aaron T.

@Aaron T.

It was certainly on my paperwork that I signed when I used my VA Loan to buy my duplex. Also, look at almost any website that mentions they do VA Loans and it is on there. Have there been some people that are veterans that have "had the intent" to move in to the place using their VA Loan and then something "unexpectedly came up" and they ended up not moving in and they somehow "forgot" to tell their VA Loan lender but they somehow told "remembered to rent out the property within a year"?

Yes there are sleazy, underhanded people that have done that. Have some of these crooks gotten away with it? Sure. I say don't do it.  

Here's a couple of examples of what I've seen happens. First of all the VA Loan people tend to send stuff in the mail to you every few weeks during that first year. Usually not anything you need to "respond to" but courtesy notices and Thank You's, etc. ...

But wait, there's more....

Your name is on a "list" and you will receive mail every few weeks from other lenders that know you have a VA Loan and they are immediately telling you that you can refi out of the VA Loan you just got....that's what happened to me. Once that year is "up" those letters continue coming in the mail. I get them literally every month from different lenders.

I had a conversation with someone a while back who did exactly what people have "implied" about using the VA Loan but not in the way they are supposed to....Here's what happened to her.....

She got the VA Loan.....and suddenly at the last minute decided not to occupy the property....and subsequently decided to rent it out to a relative who she trusted......You know the rest of the story...........Relative and her got into an argument a few months after the "relative" started renting from her......relative decides she isn't going to pay rent until things get settled......THe veteran can't keep floating that mortgage payment,...and the "tenant" knows this.....threatens to tell the VA Lender about the fraud, etc....After all....those "courtesy" notices are being sent to the property to the OWNER with her name and it has the Loan Number, the amount, etc...it was all bad.

Someone else I had a conversation with did the same thing...only he rented to a tenant that he screened.....tenant sees all the VA stuff from the lender and from other banks coming in the mail and tells owner about it.....owner says ignore it. Tenant gets curious and decides to "accidentally" open up one of the pieces of mail.....reads it.....then decides to ask the owner for a break on the rent he's paying since he now knows the mortgage payment....Owner "Balks" tenant says OK.....and next thing you know, all kinds of stuff starts happening related to identity theft on the owner.....and he gets a series of phone calls from the VA Loan people asking questions......

Kharma is Kharma......if you know someone that is thinking about doing something shifty with their VA Loan....tell them not to do it.

 Interestingly,....his "tenant",

Good question @Canesha Edwards and thanks for your input @Aaron T!

As you suggested, I looked into Act 22 and I found this great article on on the subject published by Nomad Capitalist:

PUERTO RICO TAX INCENTIVES: THE ULTIMATE GUIDE TO ACT 20 AND ACT 22

It seems pretty clear that I will not currently qualify for either of these tax incentives but it could be something to work towards some years down the road.

Your comments about investors rather than locals being the sellers also makes a lot of sense. My plan is to use the BRRRR strategy and a linchpin of that strategy is to buy properties at (or below) 70% ARV. This means that I will have to put in a lot of work networking with the local brokers while I am on the island!

@Aaron T.

Hello Aaron,

I’m curious as to what you mean by some of the numbers don’t work out? Can you give an example?

Also, are you in the short-term rental space in PR?

@Aaron T.    The OP mentioned he has a relative that is a veteran. By nature of that relative being a veteran and not on active duty anymore, his relative won't be getting "orders" to leave within that year,....therefore....the relative needs to be in the property for at least one year. 

@Heyward Lovett

The loan is for active duty and veterans. Maybe I'm wrong, but it sounds like you aren't.

Your family member that is a veteran can use it, but they have to owner occupy the unit for at least 12 months. So if the veteran is in New York they can use it to buy a SFR, duplex, triplex or 4 plex,.....live in it for a year.......The way a number of people have done it is, use the va loan and buy a duplex,.....that way you get a tenant to help pay for the mortgage.....then after at least TWO years hopefully the duplex has appreciated in value by at least 25%. If it has, the lender will let you refi out of that mortgage and use the VA entitlement again.....this time for (most likely) a higher amount because now the veteran has 2 years of "landlording" experience so they will let the veteran count 75% of the Gross Income in addition to their regular W-2 Income and then they buy a triplex or 4 plex.....owner occupy the unit again for 12 months, etc.

You will not raise your homes value by adding a lien against it for solar panels. If anything you will lower the value of the house. If you ever want to sell the solar company will either require your buyer to qualify for that debt and payment as well as the house payment or for you to pay it in full. (Up to them and their contract which one.)

I’m not sure how any attempts to refinance or cash out would go. As the original mortgage going away would then put the solar loan in first position, ahead of the refi loan. 

But long story short, no, won’t add value, may reduce it. I can’t think of one investor or flipper ever that said they were going to add solar to add value and make more money on a property.