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VA Loans can make real estate investment a reality for vets

VA Loans can make real estate investing a reality for qualified veterans. Photo courtesy Veteran's Lending Group

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Most folks know that, since 1944, Veteran's Administration Home Loans have been helping veterans achieve the dream of home ownership. What is less well known is that VA Loans can also help qualifying veterans grow their financial portfolios through real estate investment.

According to Brooke Villano of Veteran's Lending Group in Puyallup, VA Loans may be used to purchase two-, three- and four-unit properties as long as the purchasing veteran plans to occupy one of the properties as his primary residence for at least one year.

"The greatest benefit of the multi-unit purchase is the ability to generate income from the rental units which the veteran is not occupying," said Villano.  "For example, Specialist Homebuyer purchases a new tri-plex, a three-unit property. They occupy one unit, and rent out the other two units. If they are purchasing a multi-unit property, the mortgage company is able to use the rental income to help offset the cost of the new mortgage. In some cases, the rental income covers the entire mortgage payment, which gives the buyer an opportunity to qualify for a higher price range."

Investing in multi-unit properties can be a smart strategy, but it isn't for everyone. "The new homebuyer needs to understand that with this new purchase, they will also become a landlord," Villano warns. "Being a landlord can add an element of property management, debt collection and screening to homeownership, which is more work than purchasing a single-family home."

While it is true that real estate investing isn't for everyone, Villano wants veterans to know that "... the VA home loan is the only loan program which allows a buyer to purchase a multi-unit property with no down payment and offers the same interest rate as a single-family home. Long term, a multi-unit purchase can be an extremely fruitful investment. Owning an investment property could offer unique wealth generators, such as Cash Flow, Appreciation, and Loan Pay-down as well as Tax Benefits."  

Even if purchasing a multi-unit property doesn't sound like a good fit, the VA Loan can still make real estate investing a good option for active-duty veterans. For instance, when Air Force Capt. Garrett Land and his wife, Kelsy, were assigned to Altus Air Force Base in Altus, Oklahoma, they purchased a plot of land and built a 2,500-square-foot rambler on the property to use as their primary residence for the three years they will be stationed there. After that time, they hope to be able to sell the house at a profit or rent it out for a positive cash flow.

"We worked with the builder and they coordinated most of the process," said Land, who learned about using VA Loans for real estate investments by doing some research and talking with investment savvy friends. According to Land, real estate, "... is the best investment out there, but you must do your homework ... The more patience you can have in holding on to a home, (especially) if you are able to make a slight profit from renting, the better."

Veteran's Lending Group, 9 a.m. to 5 p.m. Monday-Friday; closed Saturday and Sunday, 15614 Meridian E. #400, Puyallup, 888.685.8654, veteranslendinggroup.com

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