How Veterans Can Buy Homes & Invest in Real Estate 2025 Guide Part 1
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How Veterans Can Buy Homes & Invest in Real Estate (2025 Guide) Part 1
[00:00:00] Well, if you have been watching the previous interview I did with Kellen, talking about just VA loans and all of the ins and outs, and using them as a veteran, you are gonna love what we're talking about. On this interview today, we are talking about veterans and wealth building using their VA benefits and their VA loan.
Hi. Hello. How are you? So good. It's so good to be with you again and be with everybody else that's on. Your channel. I really appreciate the opportunity and it's always a joy to be with Judith here and excited to chat some more about some VA loans and different opportunities for veterans as well.
Totally, totally. And I'll pay you later for that little, you know. Great. Yes, yes, yes, totally. So, yeah, we've been talking a lot about veterans and different kind of loans that they can use, and one of the things that we talked [00:01:00] about was, is there any reason that they would want to use something besides a VA loan if they're purchasing a house?
So let's kind of talk about that. 'cause we kind of ruled out FHA and USDA loans, so we're kind of looking at VA and conventional loans mostly. So I'll just turn that over to you. Yeah. So the biggest thing when we're helping a veteran and get qualified and see what options are available. Are how much they're wanting to put down and how their credit and their income look.
And we weigh out those to see is a VA loan gonna be in their best interest? And generally, let's say if somebody's really wants to go with no money down, then it's a no-brainer. Let's go with the VA. But if somebody has a big chunk of money, let's say. 10, 20% or [00:02:00] more, then it could be a good opportunity to go with the conventional loan.
And the reason being is with a conventional loan, there isn't the VA funding fee that the VA has. So when you're getting the financing with the VA loan, they require a portion of your loan to be financed back into the loan. So if it's your first time or subsequent time, it's anywhere from, could be 0.5% or so, if you're refinancing up to three and a half percent or, or more just depending on the different what number of times and what type of transaction you're doing. So with that being said, that's one drawback of doing a VA loan, especially if you're gonna be putting money down. But if [00:03:00] you're gonna be putting less than 20% down on a conventional loan, then you have mortgage insurance. Whereas on a VA loan, there's never mortgage insurance. So it. I'd say if there's a veteran that's exempt from the funding fee, which usually if you're getting disability income from the VA, you're exempt.
Then even if you're putting a check of money down, it could be a good option to go VA. So we'll definitely run the numbers whenever we have somebody that's interested show them side by side of what opportunity is gonna make the most financial sense for them, and we'll run with that option.
Okay? Okay. So if they want, you would run the numbers for both sides and they can go. Which works best. I think that in my mind, just knowing, again, just talking a little bit about that [00:04:00] appraisal, the VA appraisal does expect, you know, no peeling paint. You know, they expect, you know, that all the floors have flooring.
Obviously even on a conventional, they don't want you buying something with broken windows. But if somebody did have money to put down and they wanted to buy something that maybe was a little bit of a fixer upper, they may want to go conventional for that purpose pretty much only. Right? Right.
Because like you said, VA appraisal's gonna be a little bit more strict with some of those things that a conventional loan wouldn't really worry about, like peeling paint. Conventional, it comes down to the. Appraiser sometimes, but usually if there's only concrete for the floors, that's gonna be okay for conventional as long as there aren't, you know, carpet tax or other things.
But [00:05:00] the, yeah, the other reasons for going with conventional over VA would just come down to what's that financing gonna look like for that individual scenario. And that's again, where we lie, rely on them out side by side and just walk through options to show people where their monthly payments gonna be, what the down payment's gonna be, what's that gonna mean for them long term.
Right, right. Cool. Cool. I like that. So, I am just thinking we, and you reminded me at the end of the last interview about, hey, veterans can buy duplexes, triplexes, and quad, fourplexes, I wanna say quad fourplexes with their VA loan. And the stipulation is that they have to live in one of the units for a year.
Correct. You got it. Yeah. Okay, so let's talk about that. So with a VA loan, [00:06:00] what, just like you said, you have to live in one of the units. If somebody's wanting to buy an investment property, you can only do that with a conventional loan. So VA loan's always gonna be with a primary residence and it's a great way buying real estate with multi-units to build wealth.
For a veteran with no money down. And the, we actually did this, this earlier this year, was with one of our clients, we'll call him Kevin 'cause that's his name. And he was just 20 years old and was recently married. He had, we'd met at a little home buying seminar that we did and he had some really.
Some big issues he needed to overcome with his credit. So we helped him out for a year and once he had [00:07:00] overcome that, those things, he gave me a holler and was ready to go. And what we were, were able to do was get him into a duplex where he lived in one unit and rented out the other unit, and we structured it so.
That he, he was only comfortable with a, a monthly payment around 1800 and with the size of the home is gonna be about, 2,800, but he was renting out that other unit for a thousand bucks, so he was only responsible after the renter paid their portion for the 1800 right in that sweet spot. And it's amazing that he is well taking care of for a huge [00:08:00] chunk of his mortgage and
he's got now this asset that he can generate wealth from for the rest of his life as a 20-year-old. Right. Right. Isn't that awesome? And that's one of the things that, I mean, there's so many things and we're gonna share more stories as we go along because I do have other, clients that I've worked with that are veterans.
I had these two brothers that wanted to live near each other, but not with each other. And, and it's so funny because they're both older and they said we would kill each other. It would be, and it's funny 'cause I got to know both of them very well and I could see how that would've happened. It would've been one of those, oh, there was a comedy where the one guy was very sloppy and the other guy was very neat.
Oh God. What's the name of that show? Oh, I can't think of it. Anyway, it's before your time insert here. Yeah, insert here. What was the name of that show? But the Odd Couple, that's what it was. Oh, okay. And one was very messy and whatever. And the other was very fastidious. So these [00:09:00] guys were looking to try and buy a duplex.
So they could live next to each other, be there to support each other, and then, if one of them passed away, then obviously they could stay and rent out that unit and have that income, which I thought that was a cool thought. To be able to be together, but not together, and then have that later as income, you know?
To supplement and not have to move. That is kind of a cool thing. And I've had other veterans talk to me about doing that. Finding a duplex that is livable that will pass the VA appraisal is a bit of a challenge though. That can be a bit of a challenge. At least it is up here. Plus they're just.
Price sometimes way too high. And maybe that's changing a little bit with the current market, but it's definitely a great way to start, building some wealth, just using your VA [00:10:00] benefits, you know? Yeah. And with working with a, with Judith, one of the things I've realized you're really good at is getting seller concessions, which helps the home buyers.
Not have to worry about closing costs. So with doing, with working with you as your, their real estate agent, they can do no money down for the down payment. And then they've got the closing cost covered so they can literally. Get into a home without any money and it's just mind blowing that that's an opportunity.
Right, right. Well, and it's a great way then they can use that money to fix up the house. And here's the cool thing where again, you can kind of do the snowball effect. So there's two avenues potentially they can kind of take to, either build wealth and or get into a another property. And again, it is a way of building wealth.
They can either [00:11:00] do the duplex, triplex, or fourplex or they could live in their home. They buy a site-built home, single family home, live in it for a year, do some fix up, you know, whatever. The money that they saved from not having to do a down payment and closing costs. They can do some upgrades to the house and then in a year they can buy another house using their VA benefits.
Correct? Yeah, and you're right. That's a great way to build your, you know, you're basically playing Monopoly at this point. You've got, you know, your own park place now let's go over and buy Vermont and whatever. But the, you made me wanna go play Monopoly now. Honestly. I, I played that all the time.
Let's do it. I'm growing up. It was awesome. I [00:12:00] love playing that game. I'm sure there's gotta be like a, a Prescott there are. There are. Come to think of it. I saw them at the store. Yeah. But yes, it is like playing Monopoly, but with VA money, not yours, so to speak. Right. Yeah. And the way that you're able to do that, so every veteran has the same amount of entitlement, is what it's called.
And When you buy a home, a portion of that entitlement gets taken up or used for that loan. And generally you've got, you're able to, after that first year in the home, go and use the remainder of the entitlement to buy another home and then another home and another home over the years.
Until that entitlement's used up. And as far as what that would look for numbers and figures, we can work out that math another time, for an example, [00:13:00] but some, I've seen that, several times with our clients where we've got some that have bought a home with the VA loan here in Arizona and have, have moved, relocated to New Mexico and are buying another home now, and they're renting out the home, here in Arizona.
Vice versa where people have moved from New Mexico and come to Arizona. I don't know why it's New Mexico, but it's happened several times with my clients. Yeah, yeah. And, and I do a lot of, and one of the things that I learned is that it's kind of a thing that depending on, again, I think you have to have a level of comfort in taking some risks, because obviously buying property, so say for instance, you're stationed in one state or one location and you figure you're gonna be there for a little while, you, but you really sometimes don't know, you buy a house versus, you know, taking the rent or whatever.
[00:14:00] And when you get reassigned. It is sometimes taking a little bit of a risk to say, I'm gonna rent out this house, this property in the state I'm currently in, even though I'm moving maybe across the country now. I do have tenants that are actually doing that right now. They're, they, have a property in Washington State.
They bought with the VA loan and then they got moved all over the place. They kept the property in Washington State as a rental. They're here in Arizona and they're trying to decide if they're gonna stay here or if they're gonna move back to Washington. So they're, they haven't committed to buying anything, so they're just renting right now.
But I think that it's another thing that is easier. For veterans to do, then for some other people like that are doing FHA or conventional 'cause they have to [00:15:00] come to the table with the down payment. You can't use seller concessions for that down payment. And the minimum down payment on a conventional is what?
3% and three and a half on an FHA. So you calculate that and go. That's a lot of money you have to bring to the table. So getting into that first home can be tough and it makes it so much easier for our veterans. To get into that first home. And it's also makes it easier for a veteran that's maybe had some really life challenges, that they maybe aren't living in a good place right now.
Maybe they're living with family. Maybe they're, I've had some people that are homeless and use the VA loan to get into a home. It's a way for them to start rebuilding their life. But then you've been there for five years, you got equity in the house. Hey, there's nothing like some passive income from a rental property.
You know, it's, [00:16:00] it's the way to go. Whether it's a duplex, triplex, fourplex, or a site built home, it can be manufactured homes as well. There's no restrictions on that, that I'm aware of. Makes sense. Yeah, yeah, yeah. And I feel like for a veteran, this is like the best way to be able to build. Your real estate portfolios, you get transferred to one location.
You buy a home with no money out of pocket. You're there for a little bit, you get transferred to the, the next city. Maybe it's across the country. Of course, you have to have the appetite, the to be okay with, again, renting out the house there while you're across the country, but then you buy another home without any money out of pocket.
And you then move to another location, do the same thing. So I think it's a great opportunity. And one thing that's really cool as far as qualifying, 'cause that's my biggest, one of my biggest focuses, is what people can do as far as [00:17:00] qualifying for financing is when someone's moving from their current home that they own and they're looking to buy another home, they're able to use.
The projected market rent for that home for qualifying income and buying the next home. So, okay, let's say you've got, when you go to buy your first home, your, as a mortgage loan officer, we're looking at your debts that you have compared to your income. And then once you buy that house, now you've got this big debt.
Right? So when you go to to buy the, the next home, instead of just being sunk or out of luck, we're able to offset that mortgage payment by the potential rental income for that home. And again, that's a great way, that's the only loan program that allows that and [00:18:00] the VA is really set up. Our veterans for success and flexibility to be able to do that.
Yeah. And I think that that was, as I think about it, and I know I said this before, is that. I know that some people have a hard time with this and they don't think that it's right or fair or whatever, that this is what's available to veterans. And I look at it from a totally different perspective is that, most of us, I mean there are first responders and things like that, firefighters that are putting their life on the line for us as well.
It's just a little different. They're not doing it to save our country, they're just doing it to try and protect us, but. Their, the veteran signed up to put his life in limb, his, her life in limb. 'cause I've worked with many women, veterans and or their wives, over the years. They put their life in limb on the line for our country.
And [00:19:00] yes, it has a lot of benefits, but you know, not everybody comes out unscathed. And most of the people that I work with that are veterans. Are struggling with some kind of disability because of their deployment or their time in the military. And sometimes you can see it, sometimes you don't. But it's a great way, as I said, to help our veterans get ahead in life to come back and
buy a house or wherever they're stationed, be able, not overseas obviously, but locally in the United States, 50 states, buying a property and they can start building wealth into their life and that when they are, discharged, they then have something. Other than their pension, whatever, to fall back on right away.
They have something, maybe they have a house already to move into. Maybe they have that income coming in [00:20:00] from a rental or several rentals, and I don't know any other type of buying power out there that works as good as this. For veterans. I mean, I deal with, with investors and I talk with them, but they all gotta come with money to the table.
They're coming, they're looking for houses they can fix and flip. They're trying to get 'em for bottom dollar so that they can invest money. And veterans don't have to do that. They don't have to look for the crappy houses. They get to look for the nicer homes. They get to look for something that's going to be very livable out the gate.
And they can stay there for a year. And they can decide, I'm gonna rent this out and I'm gonna go look for another one, you know? Or rent out the other half, the other two, the other three. Again, but you can look for another one. You have a fourplex and it's like, well, I want another one. You know, I see another one.
Well, I've lived here for a year. I'm gonna go buy another one. You know, think about it, [00:21:00] they could have seven rental properties. Which is a whole thing I could talk about, about having duplexes and multiplexes, because then if one person is gone, you still have other rents coming in to cover in the interims.
But I just think it's it, it warms my heart knowing that these men and women who put their life on the line for our country have this benefit and that I really feel honored to be able to work with them and do this. Small thing in their life. As a way of saying thank you. Yeah, I love it and I'm totally with you.
In my mind, I see it as a huge blessing to give back and I know that we're on the same page with that, so it's just exciting for me to To give back. And it makes me think, you had mentioned the homeless factor that sometimes veterans deal [00:22:00] with and we had just closed on a, helped a family Sweet, sweet family.
A couple weeks ago. And she had, the wife was the, the veteran had had dealt with that.
Wasn't that wonderful information from Kellen in regards to how to build wealth as a veteran using your VA loan. And if you found that interesting and would like to know more, or even if that didn't resonate with you, but you're like, how can I build wealth for my family and a legacy not. Starting, you know, a property management company.
So if you're interested in just how can owning homes just bring a legacy of wealth to your family? Stay tuned and watch part two. Click the thumbnail over here and watch part two and see what happens [00:23:00] next.
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