All Forum Posts by: Sean Hudgins

Are you looking to house hack or just want a rental property? 

McLean is pretty close to DC so I'm thinking you may need to venture away from that area to get a better cash flowing property.

Garret,

My wife and I have always wanted to get into that business it seems like a good time and potentially a great cash flowing business. I see you have a lot of people in the family that can help run the day to day and really increase the value to your family which is great. 

I think I would personally try and reach out to other operators that could be partners and possibly help you secure the financing. I would probably not look in the immediate area as you will be their competition. You might also be able to find an operator that has recently sold their business or retired that may be willing to consult with you for a couple of years. They can bring the business knowledge that would mitigate a lot of the risk that a lender may see in a new operator. 

As already stated having an equity partner can really cost more in the long run but if you plan for your exit (or the partners exit) when you buy you can make sure you are in control and don't have regrets later down the line. 

Hi,

Im an agent in Virginia Beach and a Navy veteran. I have been curious about this method for a long time and have only seen it in theory and would love to hear from someone who has actually done it. 

The Theory is this:

(Quoted from VA.org: Those who apply for a VA mortgage with another veteran (a VA “joint loan”) may be permitted extra units for business purposes, which means your multi-unit property could have more than four units. Chapter Seven of the VA Lender’s Handbook clearly states:

“If a property is to be owned by two or more eligible Veterans, it may consist of four family units and one business unit, plus one additional unit for each Veteran participating in the ownership”.

That means if you and another veteran apply for a VA mortgage together you can build or buy a property with as many as “six family units (the basic four units plus one unit for each of the two Veterans), and one business unit.”)

My Take:

I interpret this as possibly a mixed use building with 6 residential units and one business unit like a restaurant or coffee shop down stairs. I do wonder if this could be accomplished with a 7 residential unit and using one unit as a short term rental though. 

Has anyone actually pulled this type of VA funding off? If you have please fill us all in I think this could be a huge opportunity for a lot of VA buyers that are looking to think outside the box.

Mike,

I think all your options are good. My question would be what is your goals from the investment? You are currently living for free which is huge. I would try to hold onto that if at all possible unless you could use your equity to buy a new house hack that also covered living expense. I like the idea of the detached unit personally because you essentially create your own multi family property... however depending on which city you're in that may not be an option. For example Chesapeake does not allow ADUs with kitchens and specifically states it cannot be rented (not the exact wording). 

I also have one of those under 3% mortgages and I personally would not want to lose that if possible, but it sounds like with a HELOC for the addition you would cashflow the HELOC so seems like a good deal to me.

Hey I’m an agent and investor in Virginia Beach, Chesapeake, and Norfolk. I love the area for investing. I would love to connect and will send you a PM. What kind of properties are you looking for? 

 This is a great strategy! This is what I did in Chesapeake, and continue to do. And a plus is that I think the Hampton Roads area has a bit of both types of markets. up on the peninsula there are more lateral cashflow markets and then you can get some great equity plays by in Virginia Beach.

 Damequia,

Im an agent in the area and would love to help, being an agent that serves a lot of military I have some tools for virtual showings as well. 

to answer your question about small multi family in the area it can be a bit tough in the area to find small multi fam. Most multi family is focused in the Norfolk area and as you have said down by the ocean front in Virginia Beach. There is almost no multifamily in Chesapeake except for western branch and south Norfolk areas. 

That being said they do come up every once in a while and you have to be quick to offer as most of the investors in the area are all over those properties. have you considered house hacking a single family home doing some rent by the room? 

On the other hand there is a lot of fixer uppers in the area that could be great options, and if you can combine some of that with some creative finance you might be able to get into a great deal.

 Im in the Virginia Beach market and I think it is really over looked. Especially when talking about the insurance issues. I feel that VB is one of the most protected markets on the east coast (in the south) from hurricanes. The market is definitely dominated by the military presence but I think that can be a great advantage to investors and is a very strong back stop for any down turns. I am hoping people start to realize what a gem Virginia Beach is and we get some more industries moving in, some changes in regulations to draw businesses into Virginia I think would really blow up the area.

There are a lot of people that run student rental businesses in most college towns. You could try and find some that are in that business and see if you can be a live in manager for one of their properties for a discounted rental rate. This will allow you to learn the rental management business which will be a huge tool in the tool belt down the road. 

Then when you have the 3 lending areas covered that Andrew mentioned, you could look to acquire a property on your own or if you have built a great rapport with the student rental landlord you could see if they would be open to partnering. I'm in the VB area if you want to connect, I don't own student rentals myself but I know a couple of people who do own some in Norfolk/VB.

There is an opportunity in that area currently 660k. its gutted but I think the right contractor they could make it what they want, and then see if their landlord will extend the lease 6 months to match up with their time line. They have a very tight location requirement, what is keeping them in that area exactly?