How We Purchased a Multi-family Home using a VA Loan | TRIPLEX | AGENTS & LENDING | HOW TO & TIPS
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- Опубліковано 29 жов 2022
- Did you know that as a military member you can purchase a multifamily home (up to 4 units) using a VA loan with zero down payment? This is exactly what we did and in this video we share our experience working with our lender and agent to get the deal closed on our triplex.
Here are some quick facts for using a VA loan to purchase a multifamily property:
🔥To get a multifamily VA loan, you must occupy one of the units. You can then rent out the others to long term tenants, run a short term rental, etc. to help pay down the mortgage.
🔥 There is zero down payment! As a trade off, you will pay a funding fee which is 2.3% of the amount borrowed the first time you use your VA entitlements. The funding fee will be wrapped into the loan so you pay it over time.
🔥As of 2020, there is NO LIMIT on the amount you can borrow with a VA loan if you have your full entitlement. The lender will take 75% of the projected rental income into account when approving your loan amount.
Taking advantage of the VA loan in this way has the potential to set your generational wealth building foundation on hyper-speed!
** the content in this video is not financial advice - we are not making any recommendations on what to do with your money and the content only serves to share our own experience **
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Thank you guys so so much. I'm actually getting out of the Airforce at the end of July. I'm really excited to get this opportunity and use my VA to build Wealth for me and my family and also build my real estate portfolio. I can't say thank you enough for sharing your experience with us. Thank you for your service as well. God bless you and your family.
Thanks fantastic, we are so glad that you are finding our content valuable. Yes it’s good to have that conversation with the lender now because you are still in - you are very “bankable” and can qualify for the deal to compete in this market.
Hey gang, thank you guys for this. Your story is informative and suspenseful!
Glad you enjoyed it!
Thanks for all the transparency and full disclosure of your experience. *Let's get this* 🍞! 🙌🏿😁😁😁✅️
We love the energy and support 😊 Thank you!
Thank you for your service. Great job getting a multi-unit. Outstanding way to begin building your wealth with real estate. I believe this to be a great use of the VA loan benefit.
Much appreciated - thank you for your support. It really changed our life trajectory and is an amazing tool to jump start anyone’s generational wealth building journey.
Good stuff man!! Keep it up!
We appreciate the support thank you very much!
You guys did a good job! Looking forward to seeing more videos from you. Me and my wife are getting stationed 1st time in February, and we have pretty similar plans :)
Keep us updated! We would love to hear your story. The VA loan can really take your family to the next level if you use it to acquire real estate with little to no down. Good luck!
Yo great video and keep up the great work on UA-cam
Appreciate it so much and thanks for the feedback!
Can’t wait to see how you guys financed your first multi family! Please upload soon
Yes we need to do a numbers breakdown soon! A quick answer is by using the owner occupied VA loan you can put as little as 0% down! And just have to cover closing costs if that!
@@the_mojomindset I am a vet that is able to apply the 0% but Im curious on what percentage for a downpayment puts you in an advantage for the long term. Also, which calculator did you use in order to find the cash on cash return/ cap rate, and debt to income ratio? Thanks for any information!
Your best resource will be a lender familiar with the VA loan that was worked with previous homebuyers that also qualified for owner occupied and used the rental income from the other multifamily units (75%). We used the rental calculators from biggerpockets.com. They have all the info you need to run the #s,
Thanks for posting, I am working on my multi family deal.
Congratulations it’s going to be a great step forward to building your real estate portfolio! Where is it located?
Great job
Y'all are so inspiring! Thanks for sharing your journey. Hoping to do something similar but with a physician loan which has some similarities to the VA loan
We are very appreciative of those kind and thoughtful words! Yeah it’s a great tool to add to your strategy - we do not know too much about the physician loan but use it to your advantage.
Hello! Loved the video and gave me a guideline to understand my next step forward, I have been 1 year in the Air Force and looking to use my VA loan on my next PCS. Question, did you use your rental income to qualify for the mortgage or did you use only your own income?
We are so happy that you found it helpful towards your journey to use the VA loan! So when we worked with our lender, we were able to use up to 75% of the projected rental income from the units that we did not intend to occupy to qualify.
I appreciate this video. I’m a Marine Vet in Los Angeles currently looking to use my VA loan for a multi-family property
Of course! Even though your in an expensive area it all comes down to if the numbers make sense to acquire a small multifamily property and rent out the other units to help offset and even cover your monthly expenses
Same Walter. Make sure to look up realtor with VA experience. Got as far as getting into escrow for duplex. ( had to use other people’s income/renters ) because mine alone wasn’t favorable to the lender I was using. Look up underwriting, debt to income ratio, credit score needed. 620, 680 , 700+. Good luck.
Great points thank you!
Great video. I’m looking to buy in 2024, I was wondering if you can explain more on how you ran your numbers or at least where to start. Thank you for the video.
Yeah if you want to DM us on Instagram with your email, il send you our unlisted YT video on how we run the #’s. I’d also highly recommend the YT channel “one rental at a time” and Michael Zuber is a phenomenal resource with tons of free getting started content. We hope that helps!
Hello I am a U.S. Army veteran and a full time Realtor located in North Jersey. If you need help using your VA loan to secure a multi family investment property in Bergen County, Essex County, Hudson County or Passaic County I got you covered!
Do you have another social media platform? Instagram perhaps??
Hello! I am currently deployed and plan on starting my process once I get back home. I also live in Metairie and work at Belle Chasse NASJRB so you’re video is much appreciated!! I just have a couple questions. If possible, i would know more about your realtor, how did you do your spreadsheet, what area in New Orleans was the most reasonable for buying property, what bank did you get your loan from and how much did it all cost you (realtor, closing costs, inspections, etc.) to get your property? Sorry i asked so many questions, my whole purpose for taking this deployment was to get my VA loan and get myself property , so I need all the help I can get. Thank you !
Dwaynietta thank you so much for reaching out! Sure for specifics on getting you connected we can definitely do a quick intro email. If you want to be more private feel free to DM us your email on IG @the.mojo.mindset and we can arrange that easily. Our realtor Sandy has been in the local area for over 20 years and helped us navigate the process. In the beginning we used a bigger pockets rental analysis spreadsheet to run our numbers and it wasn’t anything too fancy - it’s quite straightforward with helpful hints to guide you along. The areas we focused on were in zip codes 70113, 70114 and 70115. Affordability in those areas varied on the property and how much we could get it rented for - which we relied on our realtor Sandy to verify our assumptions. We recommend using a local bank - we used Eustis Mortgage Corp and had no issues. All in our down payment was just shy of 20k! Hopefully that answered your initial questions, looking forward to connecting with you via email and we’ll be looking for that DM to keep your info private. If you would like to see any more real estate specific content that could be helpful please let us know!
I’m a Veteran living in Texas and I plan on buying a multi family home as well. However I have no idea how I would be able to afford that coming out of the military being the sole provider of my household (wife has disability and unable to provide income)
Love to hear that! So when you bring a multifamily property to the lender and the can take 75% of the rental income to help offset your DTI you can get a better idea of how much you can afford.
Which lender did you go through? If you don’t mind me asking. Also did they need proof of collecting past rental income to approve your future projected rental income to boost your pre approval?
We ended up going through a local lender from Eustis Mortgage. For the proof of rent, the appraiser included comparable rentals in their report and that’s the numbers the lenders will refer to
Maybe I missed it but did you have to pay 2% closing costs or were you able to wrap that into the loan?
Yea we had to pay closing costs. We wrapped the VA funding fee into the loan
I thought you could only borrow how much you can afford based on your monthly payments? Like if I make 4k a month gross, does that mean I can get a multiplex that has a mortgage payment of 6k a month?
It depends on your debt to income ratio once the lender takes 75% of the projected rental income into account. For example, let’s say you make 4k a month gross - and you look at a duplex. If one side of the duplex bring in 1k in rent - the lender can use 750 and then your total income is now $4,750. Again, rough numbers but typically lenders try to have a range that your debt to income ratio cannot exceed 30-40%.
I live in the Northern VA area and there are no multifamily homes for sale. Nothing is available, I have to live in this area because of my job.
Unfortunately that area does not lend well to multifamily properties. Do you see yourself living there for the next 5+ years? If the numbers do not make sense no sense in forcing a deal.
How did the multi-family home workout for you guys?
3 years later we are still househacking it! It does come with learning and growing pains running a short term rental in 1 unit and medium term rental in the other and then living in the 3rd.
Just a thought, but wouldn't being your own realtor eliminate a lot of financial loss? It sounds like you two are doing a lot of the work and the buyers realtor is just cashing in on your time and energy. Please correct me if I am wrong.
It’s a valid point. Early on especially it being our first few transactions we still relied on a realtor to process the paperwork & transaction… something to consider in the future for sure would be one of us getting our license. Just depends on your goals
I'm in Massachusetts looking to buy in 2024 but don't know where to start.
If you’re interested in learning more, drop your email in IG or X direct messages and ill send you over our free getting started guide with resources that we used in the beginning!
When using a VA loan, if you want to move units, can you convert it to a regular conventional loan to free up your VA loan to repurchase another property?
You can refinance from a VA to a conventional loan, but this will not free up the entitlements. You have to sell the property in order to restore the entitlements. However, depending on the purchase price & loan amount, etc. you maybe have leftover entitlements that could be used towards another property. It is always best to discuss options with a lender that is familiar with the nuances of VA loans. They will be able to guide you on what you are eligible for in your specific circumstance. Hope this helps!
I thought once you refinance your first primary home to a conventional mortgage, you get full VA entitlements to purchase your next primary residence?
My lender says I must have 2 years of rental history experience for them to use the other units rent as income. Can you share your lender?
Christian Sanson
301-928-9603
Christian@sansonhomeloans.com
Let him know we sent you over :) He should be able to guide you through this process.
Would be interested in a follow up on the numbers, I'm a vet In California.
Thank you for a wonderful idea! We certainly need to get on this so it adds more value and context.
ua-cam.com/play/PLpJOCbymyPkIG2nQc9hdKL0_rOaFfFuY2.html
How were you able to avoid hiring a property manager?
Jess had prior experience managing rental properties through her family which helped us fit the VA’s requirements. That’s a good point thanks for pointing that out
You can't teach anybody anything by talking over each other.
Good point thanks for the feedback.
stop rambling and get to the point....how to purchase a multi-family home using VA loan!
Great point!
VA Loan = Thanking the rest of us taxpayers
There are only 2 certainties in life - death and taxes. You may want to verify that’s the accurate data sounds like that’s only one part of the story.
@@the_mojomindset Sky is high and sea is deep. Tautologies...
Point being, it's a subsidized program paid by the rest of the society. Now that's the certainty.
I appreciate your input. It’s easy to forget but we also belong in the “us” category. That’s what happens when you are a productive member of society is paying taxes.
@@the_mojomindset Uh! You do realize that the rest of "us" don't get any of those subsidized funds back into our pockets, right? It's only "you" who get it "back". There is no comparison there. Not sure why you thought using that logical summersault would help your argument.
At the end of the day, my taxes don't get me anything when I apply for a home loan but it does when you apply for "VA loan". Why is it so difficult to admit to it, and actually thank the rest of us for the help? It's a two way highway after all.