VA Home Loan
Today I would like to focus on the VA Home Loan and how you can maximize this benefit to make yourself a multi-millionaire! This is a process I have done and know from experience that it works! I have outlined the process in detail below so that you may also become rich!
It is good to read a book like Larry Loftis book here to establish an understanding in residential real estate investing. This book has helped me tremendously.
Every Combat Veteran has the benefit of $417,000 (there is a slight fluctuation based on where you live) in home buying power backed by the Government. The VA Home Loan allows you to purchase Real Estate with $0 out of pocket and negates the expense of mortgage insurance.
Now, I like to make as much money as possible with as little time and effort as possible and one way to do that is with other people’s money. In this case the governments. Now your job is to MAX OUT YOUR BENEFIT so that the total value of the VA Home Loan is working FOR you.
Some quick math:
$417,000 compounding at a rate of 7% (average rental market increase) over 30 years comes to a total value of $3,174,310.35.
But that’s not all you can make!
Assume you buy two 4-plex rental properties at a price of $208,500 each. This totals the $417,000 VA Home Loan.
If these eight units rent for $650 per month then your net income (after taxes, insurance, maintenance, and property management) per month in year one equals $1300. In year one your net income totals $15,600! That’s not including the tax write-offs you will receive. This money is called phantom cash flow because on paper you are losing money, but in reality, your pocketing it. (more later)
Over the course of 30 years, however, that rental income will increase at the rate of the housing market (assume 7%). This means that in year 30 (the year your mortgage is paid off) you will be making $110,982 net income.
If you held those two properties through year 31, your gross income would increase to $443,920 per year since you no longer need to make a mortgage payment!
So how do you set this up? The best way is how I did it. You purchase a 4-plex and move into it. In my case I found an undervalued fixer-upper and lived in it for one year while I cleaned it up. This gave me an instant increase in equity and allowed me to increase rents. After year one, I wrote a letter to the VA stating that my family needed a bigger home and I would like to use the rest of my $417,000. They allowed me to purchase a second property which I moved into!
Now to do this, you will need a good mortgage broker. In my case, I didn’t earn enough income to get a home loan in the amount of the first 4-plex. My awesome mortgage broker was able to use the rental history of the 4-plex and show that by purchasing it I would increase my income enough to cover the loan and still come out ahead.
Something much bigger to consider in all of this. The VA Home Loan is (at this moment) the only home loan that allows a 100% cash out. This means that after 10 years of your renter’s pay your mortgage, you still owe $322,869, BUT your property is now worth $820,302! And the VA will allow you to borrow the full difference of $497,433!!! (this may change based on you no longer living there, but you could still sell-off and have a nice chunk of change to re-invest plus your VA Loan would be available again).
This means you can now purchase more properties with cash down. If you purchased with 20% down you would be buying $2,487,165 of rentals!
So to summarize. You can invest your VA home loan with no money out of pocket and grow it in a number of ways to make you millions of dollars! The money is free for the taking and it is easy to do! Don’t lose your opportunity!!
ABOUT AUTHOR:
Brian Duclos:
Father, Husband, Entrepreneur, Published Author, Inventor, Real Estate Investor, and Combat Veteran.
*** The author has provided express consent to re-post this article from your success.blog
