If you are active-duty military or have served our country, you have a great opportunity to jump start your journey to financial freedom through real estate investing! How can you do it? Let’s dive in!
Hey everyone! I am Aaron Nelson, the founder of White Coat RE, we are a real estate company in the Greater Seattle-Tacoma area that specializes in helping homeowners and investors achieve their financial goals through real estate.
And on this video, we will discuss why a VA loan is a powerful tool that can allow veterans and active-duty service members to jump start their real estate portfolios.
Here are 4 Key Reasons Why:
- Zero Down Payment: Service members can buy a home with no money down using a VA loan. This makes the barrier to getting started significantly lower than other loan types that often require 3-5% down and 20% down to avoid an additional monthly fee called mortgage insurance.
- Better Loan Rate & Terms: VA loans often have better interest rates than conventional or FHA loans. They also do not require Private Mortgage Insurance (PMI), which means less money out of pocket each month!
- Multiple Uses: Service members can use the VA loan multiple times, even having several VA-backed properties simultaneously. This means that you can buy one property for zero down, and then another after you move or PCS.
- Military Housing Allowance: Service members can apply their tax exempt military housing allowance, to cover their mortgage payments instead of rent. This is a great benefit that will help service members hold onto their properties and grow home equity over time.
So now that we’ve talked about the power of a VA loan, let’s talk about one the strategies I’ve helped several of my investors employ to jump start or grow their real estate portfolio.
- Step 1: They get pre-approved for their VA loan so they are ready to buy when they find the right property.
- Step 2: We search for small multifamily 2-4 unit properties where they can house hack by living in one of the units and renting out the others to offset their housing costs. Between the military housing allowance and tenant rent payments, many service members can often cover their entire mortgage expense which really sets them up for financial success!
- Step 3: When they are ready to move, the service member either holds the property and rents the unit they are occupying; OR sells the asset, capitalizing on the appreciation and equity growth and moving on to their next investment.
So there you have it: a battle plan for leveraging a VA loan to create a robust real estate portfolio that can lead to long-term financial freedom.
