All Forum Posts by: Sean Bozigian

Hey BP,

I'm working with an investor right now on a VA loan assumption here in the Phoenix metro area and wanted to share some insight because these deals are one of the best ways I'm seeing people win in today's higher rate climate. Over the past year, I've helped several investors purchase homes with assumable loans carrying rates between 2.5 and 4.5 percent. Since many of these homes were bought during 2020 to 2022, there are plenty of opportunities with lower equity positions AND low rates, allowing investors to come in with little cash to close (often under 10%), while locking in a significantly lower payment vs. traditional investment loans.

A few things to know:

• Non veterans CAN assume a VA loan, but the seller has to agree to leave that portion of their VA entitlement tied up with the loan. There are various reasons why a seller may be willing to do this.

• It usually takes longer than a normal close. Sixty to ninety days is common.

• You will need cash to cover the equity gap between the loan balance and the purchase price. Secondary financing is possible for primary residence purchases in many scenarios, but that’s a different topic.

• This process is fully above board and handled directly through the loan servicer. It’s a clean transfer of the mortgage, not to be confused with subject-to or other popular creative financing strategies out there.

• Servicers can be a headache to deal with, but there are companies that already have relationships with them and can facilitate the entire process for a small fee. This has been a huge help for all parties involved in the transactions I have completed.

Whether you’re in my market or not, I’m happy to talk through the details. If nothing else, the more this strategy becomes known, the more it helps veterans better market their homes.

Cheers,

Sean

Since you mentioned already having a primary and needing 20% down for the next purchase, would you consider converting your current primary into a rental and buying a new primary residence? That would be the most straightforward approach and allow you to pick up another property with less down, but I totally understand if it’s not feasible for your current situation.

I’ve helped a few investors over the past year with assumable mortgages. In each case, they’ve been able to bring significantly less than 20% to closing and assume rates well below the current market. Plus, these assumptions are much more straightforward and above board than sub2 or other creative financing options. Happy to discuss more if you’re interested!

Welcome and congrats on getting started!

@Jarrod Ochsenbein congrats on the solid first month! What's worked best when it comes to finding tenants?

Hey Mike, 

There are plenty of options for house hacking in the Phoenix area, from small multi-family, to homes with ADUs, to rent by the room setups. It ultimately comes down to your budget and desired level of privacy in your living situation. Happy to chat more!

Sean

Hey Jackson - welcome and congrats on jumping in and making some moves! 

@Sagar Mukala The days of finding deals that meet the 1% rule here are behind us (for now at least). You'll have much better luck in other areas of the country if that is your primary focus. 

The Phoenix area is viewed more as a long-term appreciation play for many - your statistic on population growth being one of the many contributing factors. 

Hey Rod - as others have noted, this generally comes down to personal preference. You're going to get more bang for your buck if you stay in a Phoenix zip code, but if that isn't a major factor for you, I'd recommend a further look at Grayhawk. There are numerous subdivisions (some gated some not) offering a wide array of styles and sizes.  

Glad to hear things continue to move in the right direction for you, Ashley!

@Austin Bull not exactly. In the Phoenix area, we saw a peak in prices last May, followed by a period of declining prices through the end of the year. A lot of factors contributed to this (mortgage rate shock, ibuyers pulling out of the market, affordability concerns) to name a few. For the first time in a couple of years, buyer demand was down significantly while we saw an increase in supply. This meant that the buyers who WERE in the market had much more negotiating power.

Since January, this has reversed course and we have seen prices appreciate month over month to this point. Much of this is due to historically low inventory levels. I hope this helps clarify a bit! Happy to have a more detailed conversation about the market and specific strategies at any point.