Lets Talk VA Loans ep. 45

Welcome to another live stream. We haven't done one of these in a little while. We it's been really I would say I think the last time we did one it was on it was right before Thanksgiving actually, but if you haven't joined me for one of these one of these live streams the goal behind it is not only to teach you more things about the VA loan that maybe I haven't covered on the channel, but mainly it's answering your guys's questions. So my biggest focus other than sharing things that you're going to see coming up on the screen. I do have some slides that I'm going to share some updates that have happened with regards to the VA loan. So you'll see that which direction is it over here. So you'll see that popping up over here and yeah, I'll be sharing some information about what's going on with VA loans right now, but I want you guys to ask questions. So whatever questions that you have about all of this ask away don't wait. Don't think that there is like a specific Q&A period. Let's let's let's have a discussion. Let's have fun and spend more time answering your guys's questions then staring at my slide deck. So yeah, so yeah, I just threw here threw up a comment here, which is obviously myself. What what's one thing you want to learn tonight? Whatever that is drop it in the comments. I want to answer that question for you as best as I can right here live in real time. So the first thing we're going to talk about or the first few things we're going to talk about is going to be one the perks of using the VA loan. What is VA loan eligibility what the VA loan can be used for what are the VA loan requirements and how to build wealth with the VA home loan benefit. My favorite segment is on how to build wealth because there are so many things that veterans don't understand about the VA loan that goes far deeper than just using it to buy a property or buy your first home or forever home. You can use it to build wealth. So I am going to show you some some very specific strategies and also show you some evidence of veterans that are doing that with the VA home loan benefit so that you can get a little bit more proof of concept behind that. So more than anything else as I've already mentioned. I want to answer your questions. So please drop them in the chat as we go through tonight. We're going to kind of rapid-fire through a lot of this stuff. So let's get some questions answered while we're hanging out here for about the next maybe half hour. If you guys plan on hanging out the whole time. So first first things let's all get on the same page. What are the main perks of using the VA loan? Well, there's five main ones as you can see coming up on screen here one. It's a hundred percent financing. There is no down payment now. You probably know that you're probably like. Gosh, come on, dude. Seriously. That's that's your first thing. Yes, because there's some people that don't fully understand this you see a hundred percent financing does not mean a hundred percent no closing costs. And this is another reason why I like to talk about that. Yes, the VA loan does not have a down payment requirement, but every loan has closing costs when you're buying a house. There are going to be closing costs associated with purchasing that home. So you need to also understand that there could be closing costs when you're there. Excuse me, there will be closing costs when you're buying that home, which means you may have to pay those closing costs out of your pocket or get a credit from the seller to have the seller cover those closing costs for you. The other thing about the VA loan is there is no credit score requirement. Technically in the VA handbook. There is no minimum credit score required, but don't write that down. You see even though the VA does not have a requirement for credit scores. The VA is not the one that does your loan. I get calls all the time when someone says, oh, I didn't know you know, the VA that is doing my loan or the VA is doing. No, the VA is only determining who can or cannot get a VA loan, but they're not actually the ones loaning you the money lenders loan money, which means lenders have rules and restrictions that could be on top of what the VA requirements are. So if you're working with a lender that is doing a VA loan 9 out of 10 times, so I mean, I don't want to say 10 out of 10, but 9 out of 10 times that lender is going to have a minimum credit score. So if you find yourself in a situation where you maybe don't have the best credit profile, what you need to remember is the lender you're working with will determine whether or not you can or cannot get a VA loan with them. Now, I've seen many lenders will require, you know, 620 or 640 and some require 600 like me and my team we can go as low as 580 and I've even done loans for veterans that are below 580 depending on the situation. It was through what's called a manual underwrite. So I did a whole video on that. I linked that video down below in the description. You should see that if you're if you find yourself in a situation where you don't have the best credit profile and you want to see if you can still qualify for a VA loan, check out that video because that'll give you some more context here. Let's see. I have a question. Legacy bosses says is using is using Vantage score 4.0 is using is VA using Vantage score 4.0 to approve loans. So know that they're using I think it's I think it's number eight. I'm almost positive when you're getting your credit and also it's not a Vantage score. That's actually a such a good question. They're actually not using the Vantage score. It's it's called a tri-merge credit report that they're pulling. So it's a little bit different and it's a little bit more of a deeper dive typically what I see when someone shows me a Vantage score versus what a mortgage score would be the Mortgage score could potentially be between 15 to 25 points lower. So if your Vantage score and this is not every time I don't want to scare anybody and make them stress out too much right now, but I've seen situations where someone has shown me a Vantage score like credit Karma credit Sesame. What's another one out there? Experience things like that where you have those apps, right? You can log on for free and check your right where your credit score is. I've seen situations where someone showed me that app and their credit score on that app said 680, right? But then when we pull their credit for an actual Mortgage credit report, that's a tri-merge credit report getting all three bureaus Experian Equifax and TransUnion. I've seen that credit report or excuse me that credit score be 15 points below that 20 points below at 25 points below that. So that's something to just keep in mind that it's a little bit more of a different scoring model, but I'm glad you asked that question because that is that is a really good question there. So other than other than the credit score requirements, we just talked about right? The other thing that you need to understand is there are also no debt to income ratios on VA loans that make the final decision VA uses a little thing called residual income. So if you were working with a lender that is telling you Mr. Smith, you need to have a debt to income ratio below 50% or 55% you need to understand that that lenders requirement that is not going to be the VA's guideline requirement. There are lenders like myself who follow the VA guidelines on topics like debt to income ratio. Now, why is this important is because debt to income ratio is calculated differently than residual income, which means that if the veteran meets the VA's residual income requirements the debt to income ratio could be 65 or 70% which is significantly higher. So that's also could be a big variable in determining whether or not you can or cannot get a VA loan is going to be that overlay that the lender could have on top of the VA's requirements for specifically debts income ratio. And then my last big perk about VA loans other than the four that I've or excuse me, the three I already mentioned is no private mortgage insurance private mortgage insurance is a premium that someone is going to have on top of their existing mortgage payment to help protect the lender in case that the person defaults on that loan. So if you have an FHA loan or if you have a conventional loan and on that conventional loan you put less than 20% down both of those two loans, you will have private mortgage insurance, which is there just to protect the lender. It does not protect you. It does not go towards your loan. It does not help you build equity or pay the house off faster is simply just there to in terms of risk, right? It's just there to protect the lender. If case you default they can get their money back and be made whole on VA loans. There is never private mortgage insurance whatsoever and I'll show you a little bit why that is. I want to jump over to a question here. Let's see through a few questions at me man. I see you've got a few comments here. What are my options as a hundred percent VA disabled permanent total with no cash reserves? I'm currently working a nine-to-five but I'm about to leave this job due to the fact that I'm moving to Sacramento from Atlanta to start. Okay, so our family what are my options if I want to purchase with just my VA benefits, excuse me. Great. So I'm take 5,000 zone savings 41. Okay, I'm stressed because I want to purchase. Yeah, I get it. My this multifamily but I'm killing myself in order to have Debbie to buy it looking to build wealth. He's been okay. Cool. You gave me some context man. I appreciate that. Okay, let's let's talk about this a little bit here. I'm going to kind of try to dissect this guy's situation here. So and and if there's something that I'm missing that that as I'm going through this, let me know throw it in the third in the chat. I'll try to you know, adjust course from there, but yes, you can use the VA loan at as a hundred percent disabled veteran. I have seen people use the VA loan many many times with just their VA disability. The hard part is when when it when it becomes difficult is because the veteran may also have other monthly liabilities. It could be and I don't know if that's you it could be like auto loan personal loan credit card student loans child support separate maintenance. I'm throwing a list at you of things that they consider as other liabilities, which means that eats into how much money you have available for a mortgage. So those are some things to keep in mind of with your situation. The other variable that you're going to run into that. I noticed is you said that I think it was in which message did you put it in right here? You said right there on the second line that you want to purchase a multifamily property. So this is where for your situation. It's going to become very difficult to do because if you don't already own a property and you aren't already renting that property out, which means you do not already have rental property experience. The lender is going to require you to have at least six months of reserves in savings for you to be able to qualify for the loan and for the reserves they're factoring in basically six months of whatever your monthly payment is on the property that you're buying. So let's say you're buying a property that makes your monthly payment. Your monthly payment is $3,000 a month. Well, you need to have at least $18,000 in savings because that's six monthly payments of that property in savings. And why is because you don't have rental property experience. The other thing they're going to want to see that you have when qualifying for this loan is that you also have a property manager, which means you also have to count whatever the property manager's fee is against you every single month. Again, this is also because you do not have rental property experience. Now, let's say that you weren't buying multifamily because I actually think in your situation buying multifamily is going to be pretty difficult. I'll be honest with you. If you weren't going multifamily, I can see single-family being a possibility depending on what your other monthly liabilities are because I've done multifamily, sorry, I've done single-family 100% disabled veteran more times than I can count man. It is definitely doable in that situation. It's just when you have that amount of income, no rental property experience and not a lot of money saved. That's when you're going to run into an issue with a lender trying to approve that situation. So I hope that makes sense man. If you want to chat with me more about it one-to-one. I'm happy to talk with you about it and hopefully point you in the right direction on all of this as well. So thank you for the question again. Let's talk about VA eligibility. There are some things that we need to understand with regards to VA eligibility. There's actually two different forms of VA eligibility. My hands over too far on one side. There's two different forms of the eligibility. The first form is basic entitlement basic entitlement is how everyone starts off. If you've never had a VA loan before in your life, you have basic entitlement. If you have had a VA loan before but you no longer have that VA loan meaning you sold that property. Then you have the ability to go back to basic entitlement. That's what that would look like. There is is basic entitlement for everyone. That's how everyone starts off right now. The thing to understand with basic entitlement is the VA is guaranteeing 25% of your loan. This is actually why if you remember at the beginning, I said that the VA loan is 100% financing. There is no down payment. Well in this paragraph the VA is guaranteeing 25% of the loan, which means that's why there is no down payment on a VA loan is because the VA is putting themselves on the hook on your behalf. If in the event that for whatever reason you foreclose on that property, this is also why you do not have any private mortgage insurance on a VA loan is because of how much money the VA is putting themselves on the hook for so if you ever were wondering why is my VA loan 100% financing? How does it all work? This is how it works is that in the most simplest form I can explain it is because the VA is putting themselves on the hook for 25% of whatever loan amount you take out with regards to the VA loan. That is how basic entitlement works. Now as of January 1st of 2020 a really cool thing happened for the VA loan that a lot of people don't know about and what happened is if a veteran has basic entitlement, they have full entitlement. They do not have an existing VA loan. The veteran can now borrow up to whatever they can income and credit qualify for which means that if you want to buy a 2 million, 3 million, 4 million, 5 million dollar property, I'm throwing numbers at you just to maybe get your wheels turning here or to show you what's possible. Technically you can do that with a VA loan at 100% financing no down payment. No private mortgage insurance, just like you can buying any other property with the VA loan benefit. It became more powerful in these situations when a veteran has basic entitlement. Now, I told you that there are two different forms of entitlement that was basic entitlement. We need to talk about bonus entitlement bonus entitlement is going to be the veteran that has an existing VA loan and they are planning to keep that VA loan and go purchase another property with the VA loan. This is again where you can use the VA loan to build wealth, right? You're going to have one property, maybe rent that property out and then go buy another property for you and your family. Well, in order to do that, you have to look at what the county loan limit is and in 20, excuse me 2025, the county loan limit just went up. You see last year the county loan limit, which was the minimum amount with $766,000. Well now the county loan limit is 806. So it's about a $40,000 increase in terms of how much entitlement a veteran has available to them or bonus entitlement. Now why this is important. I'll be able to explain more but what essentially happens is when you're buying your next property with the VA loan, the amount of entitlement you have available is going to depend on whatever the county loan limit is in the place that you are moving to or buying the next property in. So as you can see from this map here, the majority of the country is in gray, but you'll see some areas that are in light yellow or yellow light orange and dark orange. Those areas are considered high cost areas, which means the county loan limit could be higher than 806. So I'll show you some examples, right? So I'm in Bexar County, Texas. The county loan limit where I'm at is 806 500. That's San Antonio, Texas. But if I show you a place like Honolulu, Hawaii, the county loan limit is 1.2 million. If we go to a place like Nashville, it's 989. If we jump over to another place like Seattle, Washington, it's just over a million. Jumping down to San Diego, also just over a million. So these are some examples, right, of different places around the country that have different county loan limits that would determine how much you have available in regards to when you are buying that next property with the VA home loan benefit. Now, what can you buy with the VA loan? You have the ability to buy a single-family home. Obviously, right? That's what everyone knows, a single-family home. That's your only option. I'm just kidding. It's not your only option. You have other options. You can use the VA loan to buy a condo, townhome, manufactured home, multifamily, new build, and also a custom construction home. Now, a condo and a townhome is going to be a little bit unique because in order to buy a condo and a townhome, the place that you're buying must be on the VA approved list, and the VA has a list of a homeowner's associations that are on there and that property must be on there in order for you to purchase that property. I've seen so many situations where veterans are going to look at property, and it's not the veterans' fault. Don't get me wrong. It's actually the real estate agent's fault, and I've seen so many situations where veterans are looking at property with their realtor, and they see a condo that they love, and they want to go under contract for that condo, and the realtor never checked to make sure that condo was on the VA approved list. That veteran will not be able to close on that property until that happens. It's extremely important to make sure that the property is on that list. If it's not on the list, it can get added, but it also has to meet the VA's minimum property requirements in order to be added. So if it can't meet those requirements, you can't close on that home, which means it's extremely important, guys, that you're working with a VA knowledgeable realtor. If you're not working with a VA knowledgeable realtor, that can cost you time, money, and stress. So I have a network of 18,000 real estate agents around the country that are VA knowledgeable. If you're in the situation where you're trying to work with a VA knowledgeable realtor, let me know. I can connect you with somebody in any market wherever you're at to make sure that you don't fall into some of these pitfalls. Now, the other things you can purchase are going to be manufactured homes is one thing which could be like anything that was maybe built off-site. It could have been a mobile home. It could have been a modular home. It could have been a prefab home. There's other names for it, but it's now fixed to a permanent foundation. That's going to be a manufactured home multifamily. That's going to be anything that's a duplex, triplex, or a quad plex, something that is between two to four units. The VA only requires you to live in one of those units, and then you can rent out the remaining units and use the rental income to help offset whatever your mortgage payment is. New build and custom construction often get confused, but they're completely different. A new build property is you going to a local builder wherever you're at that is building a giant community. For example, I'll use the companies like DR Horton or Toll Brothers or I think Pulte Homes is another big one. Those are going to be like that's working with a new build. That's going to buy a property. You're essentially just buying a property from a home builder. They're picking out 99% of what's going to go into that home. Now, sure, they may offer you different floor plans that you can choose from. They may offer you different upgrades that you can choose from, but you can't go and customize everything in the building process of that home. You're just you're essentially buying. I think they call them spec homes or inventory homes is kind of what you're buying. Custom construction is completely different. This is where you're going to have the ability to buy land. If you don't already own it, you could buy land and finance the construction of that all in one loan. You're buying the land financing a construction in one loan. It's called a VA one-time close. You have the ability to do this in many different ways on a VA one-time close or a VA construction loan. You can buy a multifamily or build a multifamily property. You can build a single family home. I see someone actually saying how hard is it to get a barndominium? You can build a barndominium on a custom construction VA loan. You can do a modular home. I've seen people want to do trying to think of other ones prefab. There's so many different things you can do with the VA one-time close. If you want to learn more about that on a VA one-time close because it is very doable. If you want me to just answer the question how to how to do it, is it or you said you said how hard is it to get this? I would say the difficulty is going to depend on one where you're at because it's having a local builder in your area that does it and offers it and is also approved by the VA not to dive too deep into VA construction loans, but the VA construction loan will require the builder that you're working with to be on the VA approved list. Is there not on that approved list? They can get added but they need to meet the VA's requirements. One of the major requirements that they have is that they the builder has completed at least three ground-up construction projects within the last three years. If they don't if they haven't done that then they won't probably be able to get added on there. There's a couple other requirements that I'm not remembering off top of my head, but I did do a video. I've actually done a couple videos on construction loans on on the channel. Do you want to check that out if you haven't already but that's essentially how it would work with regards to construction loans. So what about refinancing right? We just talked about buying property. What about refinancing? Well, you can use the VA loan to do a streamlined refinance. You can use it to just simply lower your interest rate. If you already have a VA loan and you want to do what's called an interest rate reduction refinance loan. Try to say that five times fast. You'll probably mess it up like I do all the time. This is essentially where you're going from an existing VA loan to another VA loan. All you're doing is lowering the interest rate. This is going to be a great Avenue for a lot of veterans that are buying property between now as far back as I would say probably 2022 when the market changed right and interest rates started trending upwards because over time we're expecting to see the market to start to actually improve and allow veterans to be able to lower that interest rate without having to do any income verification. There's no asset verification. There is no appraisal done on the property that they already own and you can also do it with just a soft credit bullet is a cheat code and is an extremely simple loan to do the only requirements of the VR are looking for here for you to be able to do this is your new interest rate must be at least a half a percent lower than whatever your current interest rate is. So if your current interest rate is 7% whatever rate you get must be at least 6.5% or lower. The other thing the VA is looking for is there must be a net tangible benefit, which means if you are going to get a refinance done, you need to remember that there are closing costs. Remember I told you at the beginning of the live that every loan you get there are closing costs. Well, typically when you are doing a refinance your closing costs get rolled into your loan. It's different than when you buy when you buy your closing costs don't get rolled in when you buy your closing costs get paid up front or get covered up front by either you the home seller your realtor your lender and it could be even a mixture of all of those things. But when you're refinancing this gets rolled into your loan, which means it's actually increasing your loan amount. Now, you're probably thinking well, why would I do that? Well, here's why is because you're increasing the loan amount to cover the closing costs, but what you're doing is your monthly payment is decreasing because the interest rate went down which means you're going to pay less in principle and interest on that new loan amount. So in order for this to be a net tangible benefit with the VA is stating here is however much money you are saving on your new monthly payment versus what you were were paying before the VA says you must be able to recuperate which means break even on all of the money that was rolled into your loan within 36 months, which means within three years, you basically must be able to break even on that new loan in order for it to be what's called a net tangible benefit. Now personally 36 months is too long when I set up refinances for veterans. I don't set up refinances to break even in three years because things change the average homeowner lives in their house every moves from their house and sells their house every five to seven years. So if you've owned that house for two years and we need you to break even in three, that means we're right at the cusp of five. Well, that means that you may you're just now breaking even why not just leave it the same right now that may not be your situation. But my point is my goal is to try to make setting up a refinance for somebody when I'm doing it a no-brainer. I want to make it a slam dunk. So I actually have a personal rule that I set for myself, which is I want to make sure your net tangible benefit and break-even period is 24 months or less. So that way we really see a larger chunk of savings every single month to allow you to be able to recuperate whatever was rolled into the loan. Now the other form of refinance is going to be a cash out refinance. This is different than a streamlined refinance a cash out refinance allows you to pull out equity. You're essentially going to tap into the equity that you have in your home and be able to pull that out in cash. So if you have a property that's worth $500,000 and you only owe on your current loan $300,000, you have $200,000 in equity there, which means the VA is allowing you to be able to refinance that property tap into equity and I've seen veterans tap into that equity and use it to pay off all of their bills to literally roll everything into one payment. I've seen people use it to start a business. I've seen people use it to go buy a whole other house in cash and use that as a rental property. I've seen people use it to put it in a account for a kid college fund. Like they were helping a kid pay for college. I've seen it. I've seen cash out refinances do many many different things now. They don't always make sense for every scenario, but it's possible to use a VA loan for that. The one downfall to the cash out refinance is there is one state that you can't do it and that is the state of Texas. Unfortunately, it's a state I live in as well. Texas is actually the only state that does not allow a VA cash out refinance just an FYI. So some things to keep in mind there. Now who can use the VA loan? Well, anyone who served on active duty at least 90 days during wartime or 181 days during peacetime. It can also be someone who served in the Reserve and National Guard. Now, if you served in the Reserve and National Guard, the requirement for this is that you have served at least six years, but if you have not served at least six years, there are some ways for you to become eligible prior to that six year time frame and that is a if you have done title 10 or title 32 orders for something other than school or training. For example, if you were picking up a deployment, you want a deployment. You've only been National Guard or reserves for two or three years. You can actually you can actually use the VA loan title 32 would be under federal activation. I know like a lot of the like I'm in Texas. A lot of the Texas National Guard has been activated to help support the border. That would be title 32 orders. You could now become eligible to use the VA loan in less than six years as well. So let's see question. Do you know why you can't use it in Texas? So somewhat Texas has I somewhat so forgive me. I might butcher the how I explain this but when I did some research Texas has is like a homestead state. So the their goal is to protect the homeowner. I was going to say homebuyer their goal is to protect the homeowner from basically overextending or being held liable again on the property after they've purchased that property. So what they actually and this is actually on all loans not just VA cash out refinances, but the VA requires you excuse me, we start over Texas requires you to do what's called a Texas a six loan if you are trying to pull out equity, so it wouldn't be a VA loan even if you had a conventional and it wouldn't really be a conventional either. It's a unique loan and when you're doing a Texas a six loan, they only allow you to pull out up to a certain amount and that's I from what I understood it's more just there to try to protect the homeowner from being overextended into their into the equity. So there's a lot of people that aren't don't aren't really fond of it that I personally have seen so but I also I guess I try to be empathetic to kind of why things are the way they are. I just think that maybe it was a rule. I think it's a rule. That's a little bit more strict than it needs to be and I think in some ways it harms some people because there's a lot of veterans that I have seen here in Texas that want to do cash out refinances and if they were in any other state with their situation, they would be able to do it and unfortunately because they're here in Texas and the rules here. They weren't able to do it. So that's a good question though. Thank you for asking that. So who else is eligible other than we talked about active duty. We talked about reserve. We talked about guard who else is eligible. Well, obviously it is now going to be a service connector it is a veteran who is has been discharged for a service connected disability a veteran as receiving the disability could be a also a spouse of a prisoner of war or missing in action and also an unremarried spouse of a veteran who passed away due to a service connected disability. There's actually a lot of surviving spouses out there that do not know there that they could be eligible for the VA loan as long as the veteran has passed away due to a service connected disability. The spouse can inherit the benefits and be able to use the VA loan themselves. There are so many out there like that. So if you know somebody out there that has been in a situation like that, let them know because they probably don't know now who can be on the loan. It can be a veteran. It can be a veteran and their spouse, which is the person they're married to and it can also be two veterans whether they are married or not. So if they are married, obviously they would be kind of like the veteran spouse situation. But if they're not, they could just be two friends. I've seen by property together. They could be father son and they're both veterans, but there's one situation that you don't see here out of these three and that is a veteran and a non-veteran and they're unmarried. Whenever is it a veteran and a non-veteran and they're unmarried the VA requires a 12 and a half percent down payment. Now, why are they doing this? Well, if you remember in the beginning, I showed you a snippet on the COE that says the VA is going to guarantee 25% of your loan, right? Well, in this situation, whenever it is a veteran and a non-veteran and they're unmarried the VA says we're not guaranteeing 25% of the loan anymore. We're only going to guarantee the veterans half of that 25% which is why there would be a 12 and a half percent down payment in this situation. Some things also remember if you are getting a VA loan is there are funding fees and these funding fees help fund the program. You see the VA is putting themselves like I just showed you right there, right? It was underlined 25% of the Freddie Mac loan limit. They're putting themselves on the hook for 25% of the loan. Well, how do they come up with that money? It comes from the funding fee. So the funding fee allows the program to continue. That's what has kept the VA loan intact for so long. The funding fee keeps it from being paid by taxpayers, right? So that's one reason why the funding fee exists. And when you're getting a VA loan, the funding fee is rolled into your loan. It is not required to be paid up front. You can pay up front, but I don't really recommend it, but it is rolled into the loan. That's when the funding fee is there. So first time use has a different amount than subsequent use. So subsequent use is anything more than the first time. That's what that's what subsequent use would be there. So who is exempt from the funding fee? Well, anyone collecting VA disability of a 10% rating or more, a surviving spouse, a Purple Heart recipient, and someone who has received a proposed rating prior to their closure of their loan. Those are the individuals that would be exempt from the funding fee, no matter how many times they've used it or will be using the VA loan. You will never have a funding fee. So that's another benefit for disabled veterans there. So before I jump over to the wealth building aspect, I want to I see a comment. Thank you for your content. It has been invaluable for our new construction department. Again, we appreciate what you do. Absolutely. I'm happy to help. Thank you. Thank you so much for those kind words. I really appreciate that. I am happy to help. If you have some more questions for me, throw them in the chat. We're almost done here. We're kind of rapid-firing through a lot of this stuff. So I'm going to show you some wealth building strategies and hopefully answer some more of you guys' questions and then send you all on your way. So let's talk about some wealth building strategies with regards to the VA loan. The first these are my simple wealth building strategies and this is going to be around house hacking house hacking is essentially where you're going to buy a property live in that property and then use the remaining rooms or units to collect rental income. So one major way is going to be multi-unit buying a duplex triplex or quadplex live in one unit rent out the remaining units collect rental income and use that to offset your mortgage payment. That is one way to house hack. Another way is buying a single-family home with a detached suite or a Sita and in-law suite throw essentially the same thing ADU. They're literally the same thing. That's essentially what this situation would be. It's a second bullet point there. That's one way. I've seen people do it as well. I see people also house hack. I call it house hacking the hard way is you're buying a home just a single-family home. Let's say a three-bedroom house. Actually, I'll use a real situation. I helped an active-duty airman a few years ago. This is actually early in my career of doing loans. I helped an active-duty airman. She bought a three-bedroom house and she bought the three-bedroom house and decided she was going to rent out the remaining two bedrooms to fellow airmen. Those two airmen were paying her rent. She was using that rental income to cover most of her mortgage and then at the end of the one year, she found another tenant to take over the room. She was living in so now she had three separate tenants all renting by the room from her and then she went and bought another property with the VA home on benefit. That's one way and the reason I call it house hacking the hard way is because you're essentially sharing a house with all these people. You know, you're having roommates, right? But the benefit is of having roommates is they're paying your mortgage. You're not paying someone else's. So that's the game that she got there and it allowed her to build wealth in that property in Hawaii. Now, other than those strategies I talked about with house hacking, there's other ways, which is having multiple VA loans. Now, here's a situation of a veteran who has one VA loan already and you'll see on that COE. They have a property in the state of Nevada. The loan amount was 325,000. If that veteran comes to me and says, hey, Josh, I'm ready to buy my second property with the home on benefit. What are my options? They have to income and credit qualify, but we also have to see how much entitlement they have left over. So how we calculate remaining entitlement is first. We have to look at the county loan limit in the place that they are buying. That's the first thing we have to do. So for the sake of this example, let's just say the county loan limit is 806 500, which is the minimum county loan limit in the country. Like we talked about earlier when I was showing you guys that right. So we bounce back here. The minimum county limit is 806 500. The rule or the math behind this is we divide that number by 4. Why are we dividing it by 4? You remember earlier I said the VA is guaranteeing how much 25% of your loan. So we have to divide that number by 4. That's how we come up with the numbers that we need to come up with. So we have 201 625. Now we're going to go right we talked about the 25% here and now what we're going to do is subtract the amount of entitlement that has been charged on the veteran COE already. So we need to go and look at our COE and you'll see that the entitlement charge is 80,000 to 90. So now we've come back to here. We take the 201 625. We attract the subtract 80,000 to 90 and now our entitlement remaining is 121,000. But we're not done yet. We're almost there. We're not done yet because we divided it by 4 when we started this math. We now need to multiply it by 4 to come up with the total loan amount. The total loan amount for this veteran situation would be 485 340 this veteran in the county that they're in in 2025 would have 45 remaining to purchase a second property with the VA loan at 100% financing. No down payment. No private mortgage insurance. Now, I'll show you another one. I'm not going to go through all the math on this next one, but just as an example, this is a veteran with two VA loans. How much does he have left? Well in this situation same County loan limit this veteran has 376 in 2025. The thing that you need to understand when you're using the VA home loan benefit and your goal is to buy multiple properties is the VA's requirement for you to live in it. The VA requires you to live in the property or you must intend to occupy the property as your primary residence for one year at the end of that one year. You have the ability to convert that property to a rental property, but the cool thing about all that is you don't need to touch the property or the excuse me. You need to touch the loan. You don't need to contact the VA. You need to ask for permission. You need to call your lender. You don't need to refinance your loan at the end of that one year. You have satisfied the VA's requirement around occupancy and you can now go ahead and convert it to a rental. But I want to show you something really unique here. This is a veteran that I helped buy three properties. I helped him buy all three of these properties with his VA loan and what you're going to notice here. Is the date of the loans you're going to see that he has three VA loans, but what's really weird here? Is he bought two properties in less than five months and for those of you that hang out with me all the time and watch these live streams, you know why he bought the or how he was able to do this. But for those of you that that haven't I'll explain to you how this was possible. You see the VA's rule around occupancy starts off with the word intend. You must intend to occupy as your primary residence for one year. He intended to occupy that first property that I helped him buy. But when he signed out a dotted line closed on his home, he found out two weeks later that he was PCSing to a new duty station. He didn't know he was PCSing before he closed. He found out he was PCSing after he closed, which means the rule is basically satisfied around what your intention was when you closed on that home and can we prove that and we were able to how we were able to prove that in his situation was his orders. He sent us a copy of his PCS orders and the PCS orders were after the date that he closed on his home, which means that we were able to help him purchase another property with his VA loan at his next duty station, which is exactly what he did. And then I helped him a little over a year later by after he PCS again to his third duty station. So I say that to say this there are situations out there where life events happen or things change in our lives within one year that we would like to be able to adapt to. If the rule said you must live in the property for one year, no matter what and if not, you have to sell the property. Well, I would especially if someone was on active duty, they would probably never buy a home. Right because things change all the time with people who are on active duty, but that rule allows things to change. I've seen it happen on the civilian side. I seen veterans that are no longer on active duty, but now in the civilian sector have a job and have a situation happen where they get a promotion or a job offer in a whole other state and this happened six months after they bought the house. This is an actual situation. A guy was in I always blank on the state he was in but he was he had a property close on the property six months prior got a job offer making more money moving closer to his family. He had a wife and kids and it was a better opportunity for him to take that new job at that new place. He was able to do that and he was able to rent out the property that he already owned with the homeown benefit because why when he bought the house he intended to stay there. He didn't know he was going to get a job offer six months later. There's so many other scenarios around around this as well, but I like to share this with people because a lot of guys a lot of people don't know right and so that's that's the goal behind this. So what about exceeding entitlement? We talked about the situations where you have entitlement left over but you can also exceed your remaining entitlement. You see we the total let's say you have a total remaining entitlement of 445,000. That was our first veteran situation, but you're like Josh. I want to buy I need a hundred thousand more for whatever reason. Maybe it's because of home prices. Maybe it's because prices are higher or whatever be the case. Well, you can still use the VA loan and exceed your entitlement amount. The VA is just going to require you to put a 25% down payment of whatever exceeds your entitlement. So if you exceed it by a hundred thousand your down payment is on it only going to be 25,000 that's going to be the requirement there for exceeding your entitlement. Now, if you're going to own multiple props with the VA loan, I want to tell you some things to help make sure it goes a little bit smoother for you first and foremost prepare to be a landlord, which means if you know, you're going to rent this property out at some point in the future think like a landlord on day one. Don't think I like a landlord the day you're ready to become one think like a landlord before you actually ever get there, which means avoid making bad improvements and upgrades on the house and bad improvements are things that maybe you really want to have in your home, but they don't actually increase the rental value of that home. Those are things that are typically emotional things or or lifestyle things that will increase maybe your lifestyle, but it doesn't increase your pocketbook when you rent your house out, which means it actually can come now at a loss to you. Also figure out how you're going to manage that property. If you're going to self-manage that property, which I don't recommend, but if you are you better understand a lease you better understand your local landlord laws because they vary state to state is the state that you're in a landlord friendly state or a tenant friendly state. Those are things you need to understand to protect yourself. And if you're going to hire it out and get a property manager, which I do recommend start vetting a property manager as early as possible. Don't wait until you're thinking to yourself, you know what I'm going to buy a house today. Oh, and I need to rent out my current house. So I'll just find a landlord on online. I'll find a property manager online today. No, if you think you're going to buy a house in six months to a year start looking for property managers. Well before then at that time that you're in now, so that way you can build a relationship with them because if you think about it, you're about to trust a stranger which granted they are professional, but you're about to trust a stranger with your most valuable asset that you own. I would argue that you're trusting somebody with something that is out of a greater value than your wallet. I would I would argue that so start vetting and having building relationship with them. And if you can have a reserve a rainy day fund, which is means if you can have three to six months of whatever the total cost is to manage that property set aside in an account that is going to help save some stress and time on you as well to just allow you to have money there in case you have any vacancies in case God forbid you have to evict somebody you have any repairs that need to be made anything like that. You have money that is set aside to cover those things. That's what that would be there for. So that's what I got for you guys tonight. It's our first live stream of the year of 2025. I didn't say this at the beginning. I'm sorry, but Happy New Year to you guys. Hope everybody had a blessed and safe holidays of everybody's new year is off to a smooth start. This is our first live stream of the year. We again we haven't done this since just before Thanksgiving. So I appreciate those of you that have hung out with me this evening and watch this live stream. I hope you guys got value out of this. If you if you did get value, let me know and please hit the like button down below if you have not subscribed or subscribed already is completely free. Please subscribe join the community. I would love to have you here. But that's all I got for you guys. If you guys need me for anything, please don't hesitate to reach out. I am happy to help answer any questions one-to-one with you guys as well and just and go from there. I'll see you guys in the next one. All right. So that's all I've got for you guys tonight. I appreciate you guys asking all of the amazing questions and for hanging out with me and hopefully learning more about the home of benefit than you did prior to watching this stream. If you got value and you haven't already subscribed and join the community do me a favor subscribe join the community is completely free and also like this video because it lets the YouTube algorithm know that it's valuable and it will allow it to be shared to more veterans who need to know his information. The last thing I want to leave you with is the most important thing Jesus loves you and he paid the ultimate price for your life. So if you turn to him trust in him and believe in him, he has a beautiful plan and purpose for you.