I’ve never served, but some siblings have, and so did a close friend from high school. Well, a few years back, this old friend of mine bought a house. He told me later it took him about three weeks total, but to me, it seemed like I just woke up one day and he was inviting my family over for a housewarming barbecue. I guess he’d had his eye on the property for a while, and when it went on the market, he was able to take out a Veterans Affairs (VA) loan to snatch it up.
It’s a great deal for veterans—no down payment required, 100% financing available, and lower interest rates, as well as significantly relaxed FICO score and income minimums. Best of all, no waiting period. When I heard of this, I thought: these VA property flipping rules must be great for real estate investors like me who want to find wholesale buyers.
How the VA Flipping Rule Can Reduce Your Holding Costs
See, the thing that I was most nervous about when I started getting into house flipping was my holding costs. Certainly, unexpected rehabilitation needs can sink a project, but I planned to wholesale my first several deals. Realistically, the surest way for me to fail to make a return on my investment would be an inability to sell the property fast enough. I knew that every month I had to hold onto an investment property after closing, costs would climb.
Fear of selling at a loss prevented me from diving right into wholesaling. Knowing that traditional Federal Housing Authority (FHA) loans absolutely required a three-month waiting period to sell the property after I took the title deepened my concern because it narrowed the pool of buyers. But what if my sale took longer than that? When I heard about how veterans can use the VA loan to buy sooner, I thought it might be the key to finding a buyer quicker.
What Are the VA Property Flipping Rules?
Veterans using a VA loan to purchase a house seemed like perfect leads to me because of the following rules and benefits:
- No Down Payment: Unlike traditional mortgages, VA loans don’t require any money down.
- Low Interest Rates: The Department of Veterans Affairs partially guarantees VA loans, so lenders can keep interest rates lower.
- No Waiting Period: You can sell a home to a veteran using a VA loan on the very same day you purchase it.
So, when my buddy invited our family over for his barbecue, I thought I’d just caught the golden goose. If veterans could get easy loans to buy houses quickly, wouldn’t it be quick and easy to sell houses to them? I might even corner the market in my area; nobody else seemed to be onto these rules.
Using the VA Flipping Rule in the Real World
So, I bought a house with a hard money loan, which put me on the hook—the collateral was my house. Hard money loans come with higher interest rates and shorter terms, so the heat was on. I started sweating on Day Zero—I’m telling you I had to double the water I was drinking. It was all marketing, all day.
Like I said, I’ve never served, but I know people who have. So, I reached out through my network to see if I could turn up any leads. I got a few, and chased them down, didn’t close, then went back to my network. I posted notices at the VA office, the VA hospital, and on all the local veteran’s forums, Facebook, and everywhere else. I started to frequent the local Legion and similar establishments. And would you know it, I found my buyer. The whole process only took me five months.
Not great. Not awful, either. I kept my own house, after all, and I didn’t end up eating my shirt. But it certainly wasn’t the result I was looking for. What I came to realize is that, yes, you can sell a house to a veteran more quickly than you can sell a house to a regular citizen. But, first, you need to find a veteran who wants to buy a house in less than three months from when you closed on it. And veterans themselves are a significant minority in this country. Most people haven’t served.
Some areas around bases have higher concentrations of recently returned service members. These spots might show better results. But, where I am, even with our proud service history, counting on VA loans to help our veterans and sell houses quickly is a long-odds proposition at best. At worst, it’s just wishful thinking. Ask a veteran where wishful thinking gets you.
How to Sell Houses With or Without the VA Flipping Rule
After that deal, I still sought out more real estate investment opportunities, but I figured I could use some help. So, I decided to become an independently owned and operated HomeVestors® franchisee. This linked me to a regional network of other franchisees who actively wholesale properties, meaning that I could potentially wholesale an investment house sooner rather than later if it made sense for my business goals.
Plus, my marketing efforts are backed by the nationally-known and trusted We Buy Ugly Houses® campaign, so I don’t have to sweat it out on my own. Now I spend less time chasing down leads, and more time wholesaling properties. Even better, if you’re a veteran hoping to use your military service as a springboard into a real estate investment career, HomeVestors® offers a 10% veteran discount on your initial franchise fee.
Each franchise office is independently owned and operated.
HomeVestors of America® is the nation’s only real estate investing franchise, providing business opportunities to real estate and investment professionals across the nation.