This is how to do it, guys.

[yuppee]

VA home loan is sub 2% interest, guaranteed for 6 years, and then it can adjust no more than 1% per year. there is no required down payment, no closing costs and no PMI required, either. You need not BE a vet, you just have to KNOW a (trustworthy) vet. Every VA hospital has a person assigned to helping vets find a job. This person can help you meet with many vets.

Your guy has to have a full time job in order to get a VA loan. You want a guy who can't find a job and has no disability check coming. So you have to write him a check very week. He cashes it and hands most of it back to you. Once he's got the house, VA is out of it. Banks are happy to loan to vets, cause they know VA will pay them if you can't. Once the vet has the house, he can sell that mortgage to you. Without you, he could not make the payments. Neither VA nor the bank care who holds that mortgage, as long as it's being paid off according to the agreements.So buy a place big enough to rent out to many guys, by the week. Put in dividers, small fridges, cheap TV's and cable, lockers, Net and old pc's. Maintain a safe up front for stuff so they can store what they really value. They sign a weekly "at will" rental agreement, for "sober living", that lets you kick them out at will. Carry lots of insurance! Get a place for 80k and it can be paid for in 2 years. Not that I'd pay for it if it was me. I'd make minimum payments and be ready to walk away from it at the drop of a hat. 20 guys times $100 per week. Do the math. It's much, much easier to have such a setup than to find one couple that can and will pay you $2000 per month on your 200k single family house and you'll still need a place to live yourself. My way is the only way to do rentals, guys. You just can't have much money tied up in this and you can't get enough rent out of just 2-4 people.

 

[dasein]

It sounds like you are contemplating starting a halfway house as a rental property investment. I cannot discourage you from doing that enough as a sound real estate investment plan, and am not going to bother typing out why. The first part, where you find a veteran to essentially commit lending/mail fraud with you is also very shaky.

Before exploring any corner cutting investment strategy, talk to a licensed attorney, realtor and cpa in your area. The few hundred that costs you could save you a world of hurt.

 

[yuppee]

it's not a fraud. he legitimately buys the house, then sells it to you. what he does with his salary, after he gets it, is his biz. I never said a word about having criminals in the building. It could be illegal aliens, you'd be all for that, right? Halfway house IS ideal, since the feds/state pay you $100 per day EACH inmate and you'll have a waiting list and they will be highly motivated to stick to the rules. My area has many of the sort of weekly rental rooms I speak of, it's perfectly legit. There's a company that does this, called "Oxford house" and they charge $115 a week, but provide one meal per day. They also lock the place down at night, which I would not do. You or somebody very responsible, must LIVE there to see that things go smoothly, safely, Of course you consult appraisers, contractors, lawyers, RE agents, building inspectors, other landlords, etc. that should go without saying. Otherwise, it would cost nothing to enter this means of investing. It cost about 10k to set this up properly.

 

[l_e_g_e_n_d]

Ok, I'll bite ...

it's not a fraud. he legitimately buys the house, then sells it to you. what he does with his salary, after he gets it, is his biz.

1) You pay your friend a salary who in return gives the monies back to you. Upon an investigation, when he "rats" a/k/a cooperates with the Feds, his testimony will serve as evidence that the income was contrived (not actual), and you, my friend, will be charged with conspiracy to commit bank fraud. It's a federal charge.

2) For VA loans, you need two years of verifiable income via tax returns and verification of employment. Are you really going to pay his salary and ALL his taxes for two years--before you even get a loan?

3) Most counties don't permit rooming houses, and VA certainly does not finance legal rooming houses. So I assume you will be operating this "hotel" under the guise of a single-, two-, three-, or four-family property. What happens when a "tenant" calls code enforcement on you or when the annual fire and C/O inspections are due?

4) Are you going to be there full-time managing this boiler room? Because if you think you will hire a management company to run your illegal rooming house and do a "great" job advertising and renting, you will be sadly mistaken.

5) I notice you assume 100% occupancy. I can guarantee you will not have 100% occupancy at any time with weekly room rentals. I state this as a landlord of myriad multi-family properties in populated cities.

5) You fail to account for your expenses! LOL! Do you have any idea what your utility charges will be renting 20 rooms a month: Your water? Sewer? Electricity? Gas/Oil? Plus Maintenance? Repair? Taxes? Insurance? Mortgage? Inspections and violations?! LOL!! Once you receive your monthly 4-digit bills, you will be running away as fast as you can from this "gold mine."

O, BTW ... Good luck! LOL!

 

[yuppee]

when i talked to the VA about this, they said the vet had to show 6 months of income. This sort of stuff is commonly done, dude. who pissed in your wheaties? I didn't fail to account for ANYTHING, twit. 100k of gross income. how much do you think the electricity CAN be? there's nothing in their rooms but a fridge, light, computer and TV. electric bill runs lesss than 10k per year, Insurance and heat the same. The profit, after tax, is 40k per year, just like I said.

 

[yuppee]

all it takes to have 100% occupancy is have the cheapest rooms in town. This is done constantly in OKC, dude, if you are located in the right area. not only that, but with tax sales, you can end up owning such a place for 40k, not 80k.

at 2% interest, the monthly payment on 80k house is chickenfeed. and yes, I am running it. and yes, I AM the vet.

 

[l_e_g_e_n_d]

1. VA requires two years of income.

2. You conveniently forgot water, sewer, maintenance, repair, taxes, insurance, inspections and violations--and in your case legal fees as you will need it eventually.

Hmm ... expend my workday running a F/T illegal rooming house, incur potential legal and excessive financial liabilities (via fines/penalties), and make a whopping 40K per annum pre-tax (which is unlikely as you assume 100% occupancy and fail to account for the expenses outlined in item 2 above) Where do I sign up?

 

[dasein]

it's not a fraud.

As a business attorney who deals with regulators every week, I would never counsel clients to pursue the investment you are describing. But whatever you choose to do is your business. When you post it here in a subforum on financial strategies titled "this is how you do it" though, you are advocating this as a legitimate kind of investment strategy to others. It is not, and the posters here who are objecting to it are not your enemies, just trying to explain very obvious points of law. Legend's more detailed analysis is spot on. There are plenty of ways to invest in real estate or whatever that don't have the kind of legal baggage your strategy carries. Best wishes to you, and I hope things work out well.

 

[yuppee]

recently found a 4 bedroom/2 bathroom tax-sale/resale house for 18k cash, or $350 a month for 5 years. In OK. That's $75 per week for each of 8 guys, and a dining room and living room that can become "home" for 4 more guys and a couple of porches, one of which I'll have to make into another bathroom. If I go with it, it will be on the $350 monthly installment plan. It's 'owner-carry" of the installment deal. Have to do a lot of inspection first, of course. that's awful cheap.

 

[yuppee]

guess you can't do math. 20 guys x 5k a year each is 100k. 40k is the CLEAR. money, for sitting around the house like most people do anyway. Pretty much blows YOUR "advice" out of the window. Can't multiply or read.