1. Long-Term Flipping
Traditional house flipping allows the buyer to own a property that they could rehabilitate and put up for sale in a few months. Lenders will refuse your application if you plan to use the money directly for this purpose.
But if you’re going for a long-term flip, you can use a VA loan to buy an upper-fixer or one that needs upgrading. You’ll need to live in it while making gradual changes. You can sell the house once you’re ready to leave your duty station.
The only advantage is that it may take a few years, which is why it’s long-term. But with that, you’ll have more chances to build home equity. At the same time, you’ll have more time to find buyers who might be interested in your home.
2. Flipping To Gain Experience
Some of those transitioning from active duty and back to civilian life might be looking at house flipping or real estate investing as a source of income. The first year of occupancy is likely not an issue for them because they can use that period to learn and gain house flipping experience.
At least a year is needed for veterans and active-duty personnel to meet the occupancy requirements and thoroughly research and gain knowledge on property flipping. It takes more time than watching television series on the project because of the various procedures it involves.
With house flipping, you need to learn how to deal with building budgets, transacting with contractors, and ensuring that the rehabilitation is managed according to the set timeline. It takes skill to accomplish such a project, and the experience you gain is invaluable.
Once you learn flipping and its twists and turns, you’ll have more confidence and knowledge of financing options to handle other significant projects. The VA loan allows beginners to expand their skill set and expertise through this option.
3. Gain Financing Benefits
Home rehabilitation can take roughly six months, but some investors will take longer on purpose. Qualified VA loan borrowers aim to wait for financing benefits that a VA loan might offer. In the case of active-duty military personnel juggling time between service duties and house flipping, completing the rehab project might not be possible. VA loans have become another financing option because of this reality.
Some investors also might want to buy multi-unit commercial properties that require commercial lending with a down payment. Investors who want to gather that much seed capital will need more time to complete up to three successful flips. Each project can potentially take longer, and financing becomes possible with a few VA loans throughout the years.
