All Forum Posts by: Malcolm Lawson

Hey Ken,

Welcome to BP.  Have you started speaking to lenders yet about getting a loan?  I know a lot of people will say "find the deal first" but I actually don't agree with this approach.  The interest rate you get from a lender will influence whether a property will cashflow or won't so you really need that number before you a properly evaluate a property.  It is never too early to start talking to lenders and shopping around for the best deal.

Do you currently own a home? In my opinion, the easiest way to get your first rental property is to move out of your home and turn it into a rental. The great thing about this is you get to keep your incredibly low-interest rate which is probably around 4% right now. If you were to purchase a property as a straight up investment property, lenders would probably charge you 7-8% interest. This difference in interest rates could be hundreds of dollars a month. This is how I got my rental property in Annapolis which I purchased for $0 with the VA Loan. That property gets $1,900 a month and my mortgage is only $1,350 a month.

The biggest challenge with this approach though is most lenders will require you to have a tenant in the home paying you to rent for a set period of time, I think 3 months before they will qualify you for another mortgage. So you would have to move out, rent it out and you would have to rent out an apartment or possibly live with a friend for a few months before you could qualify for another mortgage. This inconvenience is why not a lot of people go with this approach. This is what I did, rented a townhome for about a year while I shopped around and ultimately bought a short sale at a huge discount as my primary residence and for $0 again with the VA loan. Eventually, I will turn this place into a rental property as well.

Do you think this approach would work for you?

Where does she live and work?  MD does have a I think called "rural development loand" which is really popular here in Sothern Maryland and covers 100% of the cost of the home.  Fantastic deal!  If you are up in Montgomery County, you might have some areas near Fredrick that qualify for this loan program.

lol didn't realise it was the Maryland Forum.  I just reached out to someone I have worked with before who is located in Anne Arundel County to see if he covers Charles County.  I'll let you know 

This is Charles County in Maryland you are talking about, right?

He @Iggy Smith , generally the closer you get to DC the rougher the clientele gets.  There are sections just out of DC where you will straight up see prostitutes walking the streets.  Now there are plenty of investors who focus on these types of areas but if you are trying to find tenants that will cause you the least amount of headaches, I would not buy too close to DC.

 Now PG county is pretty big and kind of a weird shape so there are some nice spots in PG county.  Brandywine has some rural spots and is nice, even Upper Marlboro has some nice enough neighbourhoods.  I personally chose to move to Waldorf Maryland which nice mostly nice and just across the border in Charles County.  

What is your plan, are you looking for a primary residence you can eventually move out of and rent or are you looking for a straight-up rental property?  What is your budget? 

I would avoid buying anything in PG county unless you want section 8 tenants.  They have a law in that county saying you can not "discriminate" against potential tenants based on "source of income".  In other words, you can not deny someone because they are section 8.  I would suggest going a little further south into Charles County.  This would be Waldorf and La Plata.  Or you can go further east to Calvert County, like Chesapeake beach area.  This is a really nice area with good school zones as well. If you have any questions about MD, let me know.  I have lived her my entire life. 

Hey @Dantuna Pernell I am familiar with Lusby, I live in Waldorf MD and do most my business in Southern Maryland.  We can get together when your free and talk.  I almost purchased a rental in Lexington Park a few weeks ago but ended up coming in to low and losing the deal.  Homes are really cheap there and with the Navy base there you always have potential renters.  Waldorf and La Plata are also good if you are hoping to get renters from Andrews AFB.

Hey Dantuna,

I am a vet and now a MD Realtor. Yea, there are not too many multi units to invest in here in MD but you do see them occasionally. There are plenty of single families to invest in though. An option you might want to look into is purchasing a primary residence then moving out and turning it into a rental. With the VA loan, you have a maximum cap for your loan and this is determined by the county you are purchasing in. For example, Anne Arundel County MD is $500K. So what this means is you could purchase a home for $250K then move out and rent it then purchase a second home for $250K. The property just needs to be your primary residence at the time of purchase. Only real tricky part is your lender usually won't give you your second loan unless you have had a tenant paying you rent for at least 3 months.

The biggest advantage to going this route though is you can make these purchases with $0 down and get a great interest rate of probably around 4%.  A typical loan for an investment property is around 7% - 8%

What area in MD Maryland do you live in?

Bam! Just added it to my calendar!  See you all then! 

I am an 11 year Air Force vet and now a Maryland Realtor. I enjoy working with military and vets who take advantage of the VA loan to invest in real estate. Yes, you absolutely can buy investment properties using the VA Loan! The only caveat is it has to be your primary residence at the time of purchase.

There are three main ways to use the VA loan for an investment property

• Purchase a primary residence and turn it into a rental when you PCS or move out (this is what I did)
• Purchase multi-unit (up to 4 units) as long as you live in one of the units
• Live in flip. Buy an ugly house and renovate it while living in it to build equity.

If you would like help purchasing a home or have questions about using the VA loan please feel free to reach out to me or comment below.

If you are Military or a vet living in Maryland I also encourage you to also join my Facebook group "PCS'ing to Maryland" https://www.facebook.com/groups/PCSingtoMaryland/