Whether you’re a first-time buyer or a seasoned real estate professional, you have probably realized how expensive American real estate is right now. It can feel impossible to save enough cash for a 20% down payment and for those who can’t make that big of a down payment, they are penalized with a monthly private mortgage insurance payment.
As if it isn’t already challenging enough to buy a home for your family to live in, it can be even more expensive and risky to buy investment real estate.
Here is an excellent option that makes it possible for some to buy an investment property AND a primary home without having to worry about any down payment or private mortgage insurance while renters can pay you monthly to offset your mortgage payment.
For qualifying Veterans and service members who are eligible for the VA home loan benefit, here is your answer.
Did you know that the VA home loan benefit can be used to purchase a multi-unit property? That’s right. The VA loan can be used to purchase up to a 4-unit property, so a duplex, tri-plex, or even a quad-plex may be eligible.
The VA home loan benefit requires primary occupancy. This means that if you purchase a multi-unit property, you must live in one of the units. The secret here is to rent out the other units if they’re not already being rented at the time of purchase. The rental income should offset most, if not all of the mortgage payment for the entire property!
Example:
· Duplex (2 units)
· Purchase Price: $400,000
· Monthly total payment: $3,300
· You live in 1 unit
· Monthly rental income for the 2nd unit: $1,800
In this scenario, you just purchased an investment property with $0 down payment, NO private mortgage insurance and that values in the range of at least $400,000 and your monthly payment out of pocket (after rental income) is $1,500.
If this has your attention, then hang onto your bootstraps because it’s about to get much better.
Did you know that it is possible to have TWO VA loans on two separate real estate properties at the same time? It’s possible with The Secret to Using 2 VA Home Loans at the Same Time.
After you have lived in the first duplex for at least a year, you can purchase another duplex using the VA home loan benefit AGAIN with potentially no money down nor private mortgage insurance.
After living in the second duplex for a while, you should have enough equity in the first duplex to refinance the current balance to a conventional loan. The reason for doing this is that it will reinstate your basic VA entitlement so you can, YES, go buy a THIRD duplex (or another multi-unit property).
After a few years of discipline and diligence, you could have 6+ rental units without ever having to pay a penny in down payments or private mortgage insurance.
Contact me today for a free copy of your certificate of eligibility and VA preapproval to see if you qualify.
How to verify if you can use the VA loan on another home without having to sell your current home first:
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Terry Roberts, USMC Veteran Sr. Mortgage Broker NMLS 397987 E Mortgage Capital, NMLS 1416824
Terry Roberts is a U.S. Marine Corps Veteran and specializes in residential mortgages, including new construction, conventional, FHA, and VA home loans. He has helped more than 10,000 clients start the home buying process across America.
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