All Forum Posts by: Jared Viernes

Jonathan Roper thank you! Cole Cherryholmes I would mess around on Hudhomestore.com. HUD homes are provided with a lot of extra information on the state of the property and which items are working and which need to be fixed — you can find these in the property page under the addendums. You can also set up a daily email to provide you the latest homes available using specific search requirements you define.

Cole Cherryholmes the owner occupant period is for 15 days, after that the home becomes open to investors. You can purchase a home using a VA, FHA, conventional, cash, etc. You are still allowed to conduct an inspection and can get out of he contract if something major comes up. You can also get out of the contract if for some reason your financing falls through. Putting in a bid on a home is actually super easy; after your bid is accepted the process becomes a little more painful. Definitely worth the effort to get a good deal though.

Let’s say you would be able to get 600 and 900 for them both. That’s 1500/ month. Your PI is $1050 property tax and insurance probably another 150-200/month, so that brings you to $1250, Property Management another $150, now we are at $1400. Then you need to account for CAPEX, maintenance and vacancy. That will definitely take you into a negative cash flow. At that price this is not a good deal. A bad deal at 0% down is still a bad deal.

Adam Clear two things you aren’t considering. 1) Time Value of Money: money today is worth more than money in the future. Therefore, the full gross value of the money in the future does not have he same present value. Without going too far into the math; if you assume the rate at which you demand growth in your own money is equal to the interest rate the bank is charging you then the value of he gross money you pay out to the bank into the future is exactly the same as the present value they are loaning you. 2) What is really important to investors is their cash on cash return. This is the beauty of purchasing leveraged. Let’s say you purchase a home that provides $150 per month cash flow for $100k and put 20% down. That means you make $1800 in cash flow for the year on $20k you put in. That’s a 9% return for the year. If you were to purchase outright for the full $100k that would provide you (using a 4.75% rate) about 417 more cash flow per month. This only gives you about a 6% return on your money. Now you also need to add in your changes in equity. Let’s assume an appreciation of 3%. Since you put down only 20k (1/5) of the cost of the full value your return on equity while leveraged is 15%. While if you did a full cash purchase your return on equity was only 3%. You also grow your equity through debt pay down each month. Gaining more value where if you purchased outright with cash you gain no equity at all through debt pay down. These are the reasons there is such a thing as good debt. Debt someone else pays for you. If you can use Other Peoples Money and have a cash flowing asset ALWAYS do so.

I am in KS and I used real estate express; finished in less than a week took the test immediately and had my license in less than a month after starting the course. If you do all the training you should be good to go on your test.

Michael Andre I would add to contact a realtor that specializes in VA loans. You can find one with the Military Relocation Professional (MRP) designation showing they have taken extra time to learn about the military and more importantly to you the VA loan. Better yet find an MRP certified realtor who is also an investor. A few things you need to understand about the loan most people don’t. There is actually a funding fee that is wrapping into the loan (unless you have VA disability) which increases the loan cost by about 2.5% (exact amount depends on how you earned the loan (active vs reserve) and how many times you have used it. The loan is not considered as strong as a conventional loan offer by listing agents and therefore their sellers. This is because the VA loan requires a VA appraisal which requires the home to meet the 3 Ss; safe, structurally sounds, and sanitary. This means no major fixer uppers. In fact, the actual lenders letter you use is a major part of your offer. If you use a VA loan with a large national lender with no local presence vs a well known local lender that is known in the local industry well; the first is much a much weaker offer than the second. I always suggest to my clients to get pre-qualified by both. You can ask up to 4% of closing costs, prepaids, and reserves be covered by the seller. This can literally make your loan 0% down. Know that these must be factored into the strength of your overall offer however. Best of luck to you!

Joel Mitchell unfortunately not everyone lives in a cash flow market and the VA loan has the requirements to meet the 3 Ss in order to meet VA appraisal standards. Those being: safe, structurally sound, and sanitary. Therefore, unless you find a fixer upper with only cosmetic problems you something that is a great deal probably won’t qualify. If you are currently renting and don’t see yourself moving from the area anytime soon it doesn’t make sense to rent when you can still build equity (especially at a lower cost than renting). My recommendation would be to buy something low end and build funds, meet people, and wait for a great deal. Also, it’s much more likely you will be able to find a SFH that will work as a rental when you move out. Calculate as if the the home will be a rental today; live in it a year or two then move out and rent it out after that. If it the numbers work today it’s unlikely rents will go down (in most markets). Even if you can’t refinance out of your original VA loan for your next purchase you’ll still likely have leftover benefits to work with (look into second tier benefits) or you could use another low money down option (FHA, USDA, Chenoa, HomeReady).

Chris may be right. Not sure what your purchase price is, but the FHA loan has the most liberal amount a buyer can ask for seller credits being up to 6% of the loan costs. So that means you will need to have a loan of at least $416,666.67 to get the entire credit, otherwise you have negotiated an impossibility.

Holy crap Schofield then Carson? How lucky are you? If you can get your condo to cash flow there is no reason not to keep it. You might want to talk to a realtor to see what the market value might be. If it has appreciated enough you might use the cash somewhere else with better cash flow. I doubt you’ll get cash flow near Carson either but since you’ll be getting BAH anyway you should definitely buy again with the intent to rent out or sell after you PCS again. Once again start talking to a realtor ahead of time to open your options up and start to get an idea of the market. I highly suggest you look for a realtor with the Military Relocation Professional (MRP) designation because they have taken extra courses to learn more about service members and more importantly the VA loan. Best of luck to you!

Manah Watkins just realized my last post didn’t take. Have you thought about trying to do a deal with your family? Definitely use them to run deals past. Rentometer works pretty well in Wichita and the Trulia crime map will help you to learn good from bad neighborhoods.