Foreclosure Deals Coach Podcast

Using VA 203K Loans for Your First Deal: How your Military Service can help you.

April 13, 2023 Donny Coram Season 14 Episode 26
Foreclosure Deals Coach Podcast
Using VA 203K Loans for Your First Deal: How your Military Service can help you.
Show Notes Transcript

In this episode, I'll share with you how you can leverage your military service to invest in real estate using VA 203K loans. Learn the tactics to fund your rehab, build equity quickly, and flip the property to get the funding for your deal. Don't miss this opportunity to use your military service to jumpstart your real estate investment journey! Plus, I'll introduce you to a valuable tool - - where you can register for a funding meeting to get your loan set up and be ready for your next deal.

Article: VA Rehab And Renovation Loans | Bankrate

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Welcome to the Foreclosure Deals Coach Podcast. The real estate market is shifting. The time is now. The Foreclosure Deals Coach Podcast is your home for the mindset, tactics and tools needed to break through your limiting beliefs and find freedom by investing in foreclosure deals. Don't buy a house, buy a deal. You need to get into this right now. And now your host, the Foreclosure Deals coach, Donny Coram. Hello, hello, hello and welcome back to the Foreclosure Deals Coach Podcast. I am your host and foreclosure deals coach, Donny Coram, and on this show, my mission every week is to educate you about building income. And wealth through it, foreclosure investing. So please don't forget to hit that subscribe button like this video. If you got something out of it and wherever you consume your comment, just follow me around. I really appreciate that. On today's show, we're going to discuss using your service as a military service member. To get funding to do your first deal. And I wanna give you some backstory, uh, a little bit on that. See, both of my parents are ex-military. My dad served in the Air Force for many years. My mom served in the Army. Both my parents were deployed to different places when I was growing up, they kind of went on deployments. They would separate out deployments at the time. The military would let one soldier go and leave the. Soldier to stay here. So we were split up a lot in that capacity, but we didn't move as much as a lot of other people. So I got a lot of appreciation from the military. I applied for the Air Force Academy, got the nomination to get going, and then realized you're gonna love this, that they told me I was gonna be too big to fit inside of an F 16. Cockpit and my, I was very clear on, I wanna fly jets like Tom Cruise, and if I can't get my top gun fixed, I'm not necessarily going to join the military. I can tell you this did not go over very well with my parents. Okay. Because the mindset I wanna get into our mindset piece today is coming into Mr. Dwight Eisenhower, a former president of the United States of America, and his quote and our, our motivation today is discussing motivation. Is the art of getting people to do what you want them to do because they want to do it, and nothing could be more pure on that than military service members. Okay, let's face it, you guys serve our country, take care of us. As a, as a country, you make way less money than that should pay. Right. We, we know that to be facts. So the reason that people join the military is out of the pure spirit of service, and I was raised with that pure spirit of service myself. I really value my military service men and women. I talk to a lot of military people in the coaching space. I've got two clients have recently signed up. They're both army guys kind of transitioning out of the military into investing. And in that process of getting them into our program, I met a lending. Partner. That we're gonna have on the show here shortly, but that's going, that wants to lend exclusively to military servicemen and women because they understand the value of creating wealth through real estate investing. And as a military member, you can get a loan with these guys at zero. Percent down to do a fix and flip deal. I wanna say that again. As a military service member, you are eligible to do a deal with this lender who will get you a 0% down loan. Now I'm a broker for that program, so they're part of my foreclosure funding system. So we're combining the. Education you are getting in the coaching program with the fact that these guys wanna work with military service members. And I really wanna motivate you guys to take action because you want to. You've already taken this big sacrifice for our country. This show is gonna be all about military appreciation and how we can use the existing lending programs that we have in place right now to help you to do your first. And flip deal. So imagine you're still in the force, right? You're still in the military, you're still serving our country, and you're getting the ability to do investment deals right there in your local market. So you can supplement that lack of income that I know a lot of, especially early on service members suffer with. Where they're barely getting by, but they, they're still serving our country and they're proud of that. I want you to take that and combine it with the fact that now I've got lenders that can help you out with my coaching program to do deals for 0% down payment. So if you are watching this right now, Okay, and you're trying to decide whether you wanna get into foreclosure investing and you're a proud member of our military service. Please, please, please head out to foreclosure deals, click on the coaching assessment call. I really wanna help a lot of service members get into this deal because I gotta tell you, you're already motivated people. These two clients I just got as military guys, they're out there crushing it for their country every single day. And they're blowing through these deals on the rehab right now. We're gonna have'em on the show when we get the deals done, so you guys get to hear from them firsthand. But there's never been a better combination than military service and real estate investing, and we're gonna do a lot of that. So the way that we do this is either with private or hard money lenders, like this example that I talked about. Or to kind of pivot a little bit, there's a va, VA rehab program that not only will let you buy a home, the house you're going to live in for nothing down at the best rate available on the market. Cause they take great care of the service members. Rates are high. No way around that. And the VA rate came up too, but it is still generally. Than a lot of other interest rate programs out there are much lower than conventional and does not have the mortgage insurance that is tied into getting a, uh, an FHA loan. Okay, so you're getting it zero down, low interest rate, et cetera. And I would just wanna pop this open because this VA rehab loan is a huge tool for people who are not necessarily buying a fix and flip, but wanna buy a house and renovate the property using the VA loan. So you get this mortgage. Right. And you get, you see the rates here, kind of in the fives, maybe going up to six. This is the VA rate. They kind of just framed this in here. Um, it's backed by the Department of Veterans Affairs. Okay. So these loans are insured by the federal government, and they basically are at a lower rate because it's very low risk to the bank in question. The, the VA's not a lender, but they are backing the. Okay, so you get this loan and then you can work on the property and build in the repairs on the property. Here's an example they did here. Let's say Jada bought a home priced at$200,000 and the contractor quoted renovations on the property for$230,000. Okay. If, if they look at it and the policy is gonna be worth less than that, they're, they're not gonna do the deal. But if the appraiser comes in at a higher value, which is always going to be the case when you buy a deal. We know that we're buying Helms that have 80, 90, a hundred thousand dollars spreads in them. We gotta spend 20 to 30,000 to fix them up. But when we're done, there is still going to be renovation money available. There's gonna be equity in the property. Okay? Now, I hate moving as much as anybody else. All right. This loan program would allow you to buy a property, fix it up, live there for a little while. And then sell it at a, at a profit. Okay? So if you're wondering how you're gonna get into the loan, you don't have any money. You've got now two options here where you can do a deal using either the VA rehab loan that we, we handle here at Traction Capital. My lending partner can do the VA rehabilitation loan. There's a lot of lenders that won't do it. Okay, across the country it's more work. So these lenders have shied away from this. We're specializing in working in that space. We're gonna have my, uh, lending partner, Mike Bancroft from Traction on the Show. Um, so listen to that interview when you get a shot, but we're gonna go into great detail on that later. But I can tell you right now that the VA rehab loan could solve your problem on where to get the down payment funds to do a loan or to get the rehab funds to fix a. Because you don't need any down payment with a VA loan, and you can finance in the repairs of the VA rehab program. Okay? So once again, if you're a military service member and you wanna get into fix and flipping real estate, look no further than getting coaching and then using this VA loan thing to help you to do a deal with practically no money out of your own pocket. That's incredible. Okay. What better way to build wealth? And every time I talk to my, my soldier, uh, clients, they're like, this is how I'm gonna get rich. Like, you get a retirement from the va, but it's generally just enough to get by. Right? This is a way to build your wealth, using their money to do it. It's just. That people haven't talked about it in a long time, cuz there were no deals available on the market. So it kind of went by the wayside and a lot of people stopped touting this program. We're gonna be offering this to all of our soldiers, so either you're gonna get a hard money loan if you're gonna flip it, or if you're going to live in the property for a while. We could do a VA rehab loan. In either case, the coaching back guarantee that says you're gonna do a$25,000 deal with a profit of that amount, no matter how long it takes. It's much easier with military service men and women. So please, if that describes you, I would love to chat with you more about this program and how it can help you to build wealth using the existing VA loan benefits that you have in your back pocket right now at a service to our. Okay. Please do not sleep on this. Check out the article in, in the show notes here. It's gonna go over the program in a little bit more detail and let's set a time to talk about how getting you started in rehabbing is gonna be much easier to flip a house. If you're already military, I've got programs that you wouldn't believe can, that can help you to do this deal. Okay, let's continue on with this a little bit. All right, so, um, going back to this article just a bit, you acceptable. Home improvements can include accessibility, functionality, and safety, but it can also. It says it cannot be considered acceptable improvements. But I can tell you I that luxury renovations are not considered acceptable improvements. But let me tell you, I had a guy who was remodeling his property with using a 2 0 3 KK loan, which is a civilian equivalent of the VA rehab loan, and he wanted a home theater in that property, and we got it built to the renovations. So I know for a fact that it can be done. So it mentions that the pros of this program is that you can finance repairs for like, for cheaper than alternatives, like getting a personal loan or even a helo, cuz it's tied in to the existing equity. You can put 0% down as opposed to a non-VA loan. FHA requires three and a half percent down. Conventional starts at 5% down, and a lot of them don't. All of them have a finance in the repairs option, but you've gotta put in the. The down payment. Right? The only thing that, that, I'll, I'll tell you that the initial purchase price, you can save huge amounts on it, but you have to be able to look past the, this is gonna be my dream home. We're gonna live in forever. Now I know you all are deal hunters and you listening to the show, but that's gonna be the issue. So if you got a spouse, you know, uh, you saw wife's example. Cause when I was selling this a lot, the issue was it was hard to get the spouse to see the future potential. And it wasn't always. I had situations where the husband was like, this just looks like a lot of work. Well, it is, right, but it's not work that you're going to be doing. You can save a fortune off the initial price. You're guaranteed to get equity with the coaching, and if we buy a below market deal, you're good to go. Now, the cons that it mentions, and I don't completely agree with this article, but it's only for livability and repairs, but that includes paint, carpet, et cetera. It includes everything that's gonna make that house livable. It's not generally for cosmetic improvements like, you know, putting in that home theater room, but I've seen it done. It's all about how you s. Okay. You will. It is only other thing is you used to have a, have to find a VA approved contractor to get it done. That they wiped that out recently. Now, as long as they're a licensed general contractor, you can do that. That. The repairs with anybody who's a licensed contractor in your neighborhood. Obviously, I'm working with licensed contractors all across the country. That's a very easy thing for me in the coaching program to connect you with that and get that done. It does mention as a con, you'll have to pay the difference between the as is completed value and repair costs. That's only if you go above the value. And that's just dumb. There's no reason to over improve a property to the point where you have to pay the gap on the repairs. Buy it right to begin with and you'll be good to go. Right? It briefly mentions, I'll just conclude with this on the article. The FHA has a 2 0 3 K loan component that's very similar. So if you're listening to this and you're not a military service member, don't despair. We can do this with a 2 0 3 loan. And then Fannie Mae has a homestyle loan for. Conventional buyers who are putting 5% down, you can, you can finance in your repairs and not use FHA if you don't want the mortgage insurance, et cetera, you got a little more money to put down that will let you do that. And then there's construction to permanent. There's just, banks will do, Hey, I'm getting this loan done. They will finance the property and they can do a construction of permanent loans. I'm working with several local banks that can provide that for people who are in my market and around there. But if we need to find a lending program for that, that's just a matter of digging into your neighborhood and finding out who's offering that. The point is, is that you can in fact buy a deal as a military service member, okay? And you should. They're not paying you enough for what you do. I really appreciate what you do, but if you're gonna build wealth, okay? If your objective is to retire of the military and not rely on just your military retirement, you better find a retirement plan outside of that income they're giving you. So the way to get that done is to seriously consider investing in real estate. And the neat thing is, is doing it on your own, especially when you got a day job. Being in the military and serving our country is super difficult. As an example, I have a client who signed on to do a fix and flip, and like right after he signed on, he knew about, it wasn't like a surprise, but he got shipped out to Poland. If you're watching Steve, thanks for watching, but got shipped out to Poland while he. Before we actually even bought the. Okay, we're under construction right now. Should be wrapping up. Well, by the time you see this will be several weeks and hopefully we've interviewed him about his experience here. But he, uh, left the country and we've been managing the flip here with my project manager here locally on a property he's never even seen. Now, he used that hard money lender I was talking about, to get the deal done at nothing out of pocket. They financed in the repairs. The loan was a little expensive on the point side. Right, because they financed in everything, but he managed to do this deal with almost nothing out of pockets and incredible, and he is gonna profit very well. We bought the property for like, don't quote me on this, but I wanna say 2 55. Got about four 30,000, 30 thir, 25 to 30 grand of the rehab cause it was a super easy remodel. Retail on the property is about 3 50, 3 50. Okay. And obviously we're gonna wrap all this up, but I'm gonna show you the deal here on Privy cause I want you to see how we did the analysis on this thing. And I think we actually looked at this one once before, um, and it didn't have very many comps on it. But let's hop into Privy and just find a deal in general. Cause I wanna show you how easy it is to locate deals here in the market, uh, right now cuz they're just everywhere. So we're gonna load this thing. So here we are in Privy. By the way, uh, you see the link there. If you are looking to start being able to analyze deals right there in your local market, please use my affiliate link to sign up for Privy. And when you do so, schedule a call with me at no cost. I will walk you through getting Privy structured. I've talked to a lot of people who are like former Privy users and then, you know, they couldn't get it set up quite right. There's a lot of great videos out there. Benson Juarez is a great guy. He's been with the company for years and he goes over stuff, but there's a little bit of learning curve to get it set up. Once it is set up though, you just can't beat privy for finding deals. It's just, it's an incredible deal tool to find stuff on the market. Um, and so here we are. This is basically looking at Colorado Springs. Now you can see here it's not filtered yet. So we gotta put it in here. We filter it as looking for fixed and flips 75% or lower of the market value. That very quick search gets us deals immediately. Obviously we're using an AI here, so we don't know what a deal is versus what's not a deal until we dig in a little bit more. And like any deal hunting expedition, you're not gonna find deals every day that you log. Okay, you've got to go in there consistently and look for the best deal, cuz the best deals don't last long. We're gonna see, see if this property on Bonnie Bray is actually a deal. We look on the, first of all, we check out the property itself. They're asking 4 59. It's got 1300 square feet above grade, another 1300 approximately in the basement's, roughly 2,600 square feet. It's in a neighborhood called Stetson Hills. They made some interesting design choices with the paint. Lot of stuff I probably would not have done. It needs to be updated just a bit. But all in all, not trashed, right? Is this a deal? Well, we're not deciding if this is a deal based on condition. We're deciding if this is a deal based on price. So Privy looks at the property now and if we scroll down here, it brings up the comparable sales. And the reason Privy thinks this is a deal is because one sold 0.69 miles. First$630,000, which is almost a 200 K spread on what we're looking at, but it's not a very good comp. And the reason it's not a very good comp is because that house was built in 2022, whereas ours was built in 1999. Right. So not a good comp. If we load the other comps. You're gonna see here that the most expensive one, and I like to sort by date cuz we wanna see the most recent data that we can, but the most expensive one in the neighborhood sold in September, which is borderline for whether or not we wanna use that comp at all. Really. We wanna look at the December stuff, but this one sold for 4 85, meaning this house could go up to that based on the comps we're looking at. We're getting it at 4 59. They're asking 4 85. That's an an no. Right, but that's the point. We did that analysis in a few minutes. People are gonna tell you there are no deals all the time. That's just not the case, man. If you're using Privy Daily in your market, I promise you, if you're consistently looking, I we're gonna find a deal on a very consistent basis and approve that. When you hop on a coaching call, I find out when you're, where you're located, I'll open privy, I'll hop into your market and we're gonna find a deal in real time. I gotta tell you my success rate. 80, 90% on the coaching call that I find something in the local market. But test me, you know, hop out there. If you're convinced I can't find a deal in your local market, let's do it. Right? Let's hop on a call together. I will show you that I can absolutely find a deal in your local market. Privy is the right tool to get that done consistently. All right, so let's, uh, just kinda recap a little bit cause we're coming to the end of the show here. Basically, you can use the VA to fund your rehab deals, built equity, and quickly flip the property for a profit. Okay? The VA own the original va uh, renovation loan requires that you live on the property for a period of time. But if you don't mind moving every now and then, cuz you're getting paid for it, this is a great opportunity to buy a. But we also have lending programs that can allow you to flip a house with nothing out of pocket. They specialize lending to military buyers. I would love to chat with you more about that and listen, if you're trying to get started with this, head out to track It's our Len Traction Capital, or go to the Facebook group and I'll connect you there. In either case, we'll register for a funding meeting to see how we can best get you financed to do your deal and get you started in real estate investing. Really talking to the military people on this show today cause I'm so excited about these programs that we're finding and the opportunities that are popping up. Whereas it was very difficult to get a deal done cuz the VA was so particular about the condition of the property. Now with this VA rehab loan, it's okay if the property's not in great condition cuz you can use that loan to finance in your repairs. And as long as you're buying a deal, you won't have to bring any money. The table to get this deal done. You can literally sign the paperwork, move in, start the work, right, get the property done, and then sell it for a profit or rent it out. Ultimately building wealth using the VA as a tool to do that. It's an incredible opportunity. All right, that's our show for today, guys. A lot of stuff is happening out there, so please jump in. Like everything and every show, everything we discussed is going to be in the description below, so check out the links back. Please get involved in the conversation by joining the Foreclosure Deals Coach Facebook group, and of course, tune in every week for more insights about how to get started to the foreclosure investment world. Once again, this is Donny Coram, your foreclosure deals coach, thanking you for tuning in yet again and reminding you don't buy a house. Buy a deal. Thank you for tuning in to the Foreclosure Deals Codes podcast. If you like what you heard here today, remember, new episodes are uploaded weekly. Subscribe wherever you listen to your podcast. Do you want more of the foreclosure deals? Coach, are you ready to learn the mindset, tactics, and tools required to be a. Successful real estate investor. If so, click the link below to schedule a one-on-one coaching Call today with Coram, the Foreclosure Deals coach to determine if coaching is right for you. And remember, don't buy a house, buy a deal.