Episode 145 | Jon Lallande | Military Millionaire Podcast

Show us some love!

86 / 100

Jon Lallande on The Military Millionaire Podcast

00:00 - 05:00

David:

What's up military millionaires! I'm your host, David Pere. And that's your co host down there. I should point, Alex always points like he knows where I am on the screen. So somewhere around here is your co host, Alex, born in pink. He's a guy who has been around for like 100 episodes now. So if you don't know who he is, you should probably listen to more of these shows. And then the other guy here, Jon, and wherever Jon is, if you follow me on social media, you've probably run into Jon at some point, we're basically besties. He's a partner of mine on several deals. We live in the same house. And so you probably at some point or another have seen Jon, we've lived together for a year now he's actually in like, on the other side of this wall, recording, so, but he is a VA lender, one of the ones that I recommend to people, he's done some pretty incredible things across the country and with different loans here and there. And so we wanted to do a deep dive on the VA loan.

So there's a lot of rumors or misconceptions about it, and we can't always cover them all. So I thought it'd be a lot more fun to bring in somebody who closes big loans and multifamily loans in a very expensive very competitive seller's market and can give some tidbits for how to make that VA loan more competitive.

So that's the premise for this episode. And also, I just needed another guest and Jon happens to live here. So I told him.

Jon:

I was the best option regardless.

David:

That's it. So Jon, tell us a little bit about yourself, how you got into real estate and what you've done so far.

Intro:

Welcome to the military millionaire podcast where we teach service members, veterans and their families how to build wealth through personal finance, entrepreneurship and real estate investing. I'm your host, David Pere. And together with my co host, Alex Felice. We're here to be your no BS guides along the most important mission you'll ever embark on your finances.
Vehicle one, you're clear to depart friendly lines. Roger Vic one Oscar Mike.

Sponsor:

Hey, guys, I want to interrupt this episode for just one minute to bring you a message from our sponsor for this episode, Rentometer. Now, whether you already have an established rental business, or you're analyzing your first deal, knowing the correct rental income is absolutely crucial to lowering investment risk and optimizing your rental income.

That's why our go-to source for rental data is Rentometer real estate professionals rely on Rentometer because it's the fastest and easiest way to access quality rental data throughout the US.

Now don't take our word for it. Rentometer provides over 500,000 rent reports every single month and gets rave reviews from its customers. In fact, when I first became a real estate investor rent ometer saved me $100 a month on my first property which would pay for the entire rent ometer membership. If you paid for the membership. Right off the bat, they have a free option to give it a trial. I use Rentometer Pro, it's absolutely worth your time. I still use it to verify my rent when I'm analyzing properties and it saved me or rather earned me extra 1000s of dollars over the last few years in rental income and I absolutely recommend that you give it a shot.

So go to rentometer.com today to start your free seven day trial and grow your rental business smarter with rentometer or click the link down in the show notes. And that'll take you right there. Now let's dig into this show.

Jon:

Okay, perfect.

So I got into real estate like most other people doing real estate wholesaling. So out of my barracks room in the Marine Corps, so did five years in the Marine Corps as a reconnaissance marine, did the scout sniper thing, after my new flash deployment, added some downtime, and a little bit of money that I saved up from not being able to spend any of it. So I invested that into a system where I was learning how to wholesale so jumped right into that bomb. I bought my first property using the VA loan and started getting off market properties.

From there, I fell into residential mortgage lending. I loved working with the numbers and connected with a few guys out here. So I'm doing some big things and saw kind of the life of a loan originator and fell in love with it. Being a veteran and working with a lot of people that are also veterans and also into real estate investing I find found myself diving deep into the intricacies of buying multifamily properties VA and then just wanting to learn every single part of the VA loan so I could actually be useful when when helping people out instead of just one of those other lenders that we won't name on the podcast in case they ever want to sponsor your show, Dave. We know which one it is.

David:

If they wanted to sponsor the show, I would probably tell them that my reputation is more valuable. Yeah, I know who well.

Jon:

Yeah.

05:00 - 10:00

David:

Yeah, Jon is one of those guys who ruin the mentorship for everyone else. Because he came to me. I was like, will you be my mentor? And I was like, Yeah, sure. And then I just can't get rid of the guys so nobody else gets a mentor.

Jon:

Yeah, that's exactly how it was. You are my mentor.

David:

When I first moved here Jon and I met in bigger pockets because he was hosting a pizza and beer real estate meetup. It was like my first week in town. And then, I don't know, I don't, I don't actually know what the progression was there. Whenever COVID happened, we found ourselves at the chow hall and recon gym on work days, and then just got closer friends. And then my wife lived out of state, he moved out of state and he was like, I need a place to stay for like two weeks, and then a year later a year...

Jon:

I need to get you in shape. That's what it was.

David:

That's yeah, that's exactly what it was.

Alex:

Have you seen him? You failed.

Jon:

I know. Trust me, Alex, I've been working on that for the last 13 months now. And it's still like, it's, I don't like failure. And I haven't accepted it yet. But as he is on his way out, I'm starting to realize that that's a reality.

Jon will work harder on your loan than he does on my workout. So you're welcome.

Alex:

Let's help you're better at lending, tell me about the VA loan.

Jon:

The start as if no one knows anything about the VA loan, you don't have to be a veteran or surviving spouse. And it's a product. And let's just say that for people that don't know anything about lending the huge purse, or you don't have to pay any mortgage insurance on a zero down loan, which is incredible.

Any other loan, your monthly payment would be anywhere from 50 to could be $800, higher just on mortgage insurance alone, especially in our market. So you can do zero down, no mortgage insurance. There's really you don't fall under any of the same restrictions as you would with FHA as much as people kind of take out all that you can't buy anything that has anything wrong with the property as that's not the case. It's a great loan product that's offered for veterans while they're active duty. People that are in the reserves that have been on it right now we're in war time. So technically, so is 90 days active duty, they'll start getting their benefits and 180 days and peacetime they'll get those benefits, surviving spouses and you can buy a property zero down. And once you've got your closing costs, you can afford it.

David:

And so obviously, there's so many benefits to this, right? So let's talk briefly if you want to get a three minute overview of the loan process for me as Nick the new guy applying for a loan just so people understand that. And then kind of timelines to expect based on maybe direct lender versus broker slash some expectations.

Jon:

Yeah, so I'll just give a general time timeline as well as an average lender. So obviously, the first thing you're going to do is reach out to your lender, you'll start the application process. Be, especially for people that are on active duty they're going to want to see the unemployment history, your bah is going to take into account how much you can afford.

Upload your documentation, you should receive a pre approval within 24 to 48 hours is a normal turn time to receive a pre approval. Once you do that you start shopping for properties, you get something under contract, and you're looking at anywhere from a three to four week clothes on average, if you're if you're going to some without naming any lenders, or there are lenders that will go to 60 days or less. And I'm going to try to avoid using names here. But 60 days for a VA loan. But what I'm getting at yeah, what I'd like to get at is go ahead.

David:

Veterans united Navy federal, yeah, big..

The point isn't the name of the institution. The point is like big banks, big corporations where they aren't nearly as streamlined as specific mortgage companies are generally going to be slower than somebody who only focuses on loans.

Jon:

Right.

And one of the questions for anyone that's shopping for VA loans, one of the questions you can ask your lender is are you a direct lender? Or are you a broker and, and some people will say that they're just as quick and some of them can be some people will tell you that that leaning more towards a direction to everything's in house, and they have all of their systems out and that they'll be a little bit quicker.

There are people right now closing VA loans, my company included and 17 days, which is faster than a lot of other lenders are closing conventional loans. So if you're hearing that, Oh, don't use your VA loan or you have a real estate agent that's telling you that you shouldn't use your VA loan because it's not going to be competitive. Why would I just ask why? Why is it not competitive? Is it because they're, they take longer to close it because you're putting zero down, the seller is getting the same amount of money regardless of if you put zero down, or if you put 20% down.

10:00 - 15:00

Jon:

So that shouldn't be the case. And unless you know, you don't have any money to cover your closing costs, or right now we're seeing a lot of appraisal gap, which is you're paying the difference between the appraised value of the property and the purchase price, the purchase price is higher than the appraised value. So you have to cover that we can only lend on the appraised value of the property. And that's the same on any loan, if you're looking at a conventional, they're going to look at conventional loan, FHA, they're going to look at the appraised value, we do not care about the purchase price.
Alex:

So as a seller, you know, flipper. I am not that excited about VA loan buyers for that exact reason.

Jon:

Okay.

Alex:

Appraisal gap, and they have no cash, right? Maybe if they have cash, they won't use it. I'm okay with that. Maybe they have cash, and then we use it. I'm okay with that. Um, but also the VA loan inspection is, I guess maybe not true but stigmatized to be more strict.

Jon:

Yeah, so but to hit on your first point, the saying of be a buyer doesn't have gash is certainly not true. I mean, they might, you might have more veterans that are active duty, maybe like, lower ranks that haven't had enough time to save up cash. Yeah, that's true.

But the saying that just because they're a veteran, they don't have cash, I've seen plenty of veterans who have plenty of money, I have a guy that I just got off the phone with today, that's got $100,000 appraisal gap coverage. So that could go either way, inspection, what you're what a lot of people think is they're going to go through and they're going to start stomping on the roof. And like they, you know, like they went on FHA. There are a couple of weird things with VA that that you see called out frequently, one of them is going to be chipped paint on the outside. So yes, that does get called out. I would say half the time if it is painful.

Everything else is really just safety, its health and safety standards that you would see on a conventional loan, you would see on an FHA loan, they're going to be there's really not a whole lot of other ones. There's some weird stuff as far as utilities, what utilities need to be in their stove, and everything like that, but most houses, especially your flipping house, you're gonna have that in that right.

So what else would be a concern that you would have?

Alex:

Well, and to be let me Well, let me let me clear up to, um, FHA buyers don't excite me either. So yeah, it's not that the VA in specific is it's that right now, in a competitive market, I want the I don't you you said, well, the sellers gonna get the same amount of money. That is correct. And for the listeners, I want to make sure that I acknowledge that Jon's right. Like, whether it's a VA buyer, or an FHA buyer, or a cash buyer, if we agree on a selling price, as long as there's no appraisal gap, I'm gonna get the same amount of money, I don't care how you pay for it.

Obviously, there's a difference between cash buyers and loan buyers, conventional and conventional is known to be a little bit more loose. That's not always the case. But it's known to be a little more loose.

So for me, cash buyer, conventional, FHA, VA, and to your point, and I want to, you know, that might just be stigma, that might not actually be a fault of the loan, because I understand that, that I'm getting the same amount of money, it's that I'm in a competitive market like this, I wanna get that thing sold and closed as fast as possible. So I'm, so I'm just, I'm just trying to, you know, yeah in where I can for no reason.

Jon:

Yeah, no, let's do it.

So and then the thing that really threw a wrench in it is you just said FHA, FHA over VA, which is surprising to me, because FHA is definitely going to be more strict on the inspections than VA is, in my opinion. So that would be surprising. Now, as far as going conventional versus VA. Now, let's say and then we'll, we'll use my client today, for example, I have a client who's VA, we're putting in a 17 day clothes for the $250 a day guaranteed per diem that we're going to close on time, and he's got $100,000 in appraisal gap.

Now we could use that $100,000 as a down payment. In that case, are you going to let's say you have the same offer conventionally. What are you, what are you looking at and what are your concerns with VA?

15:00 - 20:00

Alex:

Right now, see, look, when I say VA loan buyers don't have cash. Look, I'm at Fort Bragg. Right now I'm near all the VA buyers. So we don't have cash buyers here. We Only half day buyers. So I'm a theoretician. And by hypothetical I'm not fussy by actual real life. Yeah, I don't really care in real life, I'm just saying, what I care about is when that thing goes on the market is that I want to go into contract once.

Jon:

Yeah.

Alex:

And then I want to make sure that my appraisal gap is covered. So I know this is a 100% angle. I know that. Like, as you said, there's a bunch of young troops that don't have the capital to do appraisal gaps. There's a bunch of young troops, especially military bases, who are like, dude, I'm only gonna be here five years, I'm not paying you 20 grand over ask or over appraisal. So I get that, right. And I also know that myself when I bought my first house at 27, and I bought a $65,000 condo, I had $900 in the bank to my name.

So for me if there was any of that now, I'm not everybody by a longshot, right. And I understand that, but I don't know that as the seller, what I see if I can see a guy who's has a, if I see a guy who has a conventional loan, you know, 20%, down on a $150,000 house, that's a good chunk of change. And then they give me an appraisal gap. That's what I'm most concerned about in this market at this moment. That'll change. And when the market settles, I don't care about the VA buyer cash buyer, it's gonna make that much of a difference. But right now, like you said, because that's how we brought it up. It's competitive.

Jon:

Yep.

Alex:

I'll take a VA buyer with a strong closing, mostly appraisal contingency is what I'm looking at more than anything.

Jon:

Right.

And let's just say, as a hypothetical, and you have a conventional with no appraisal gap, and you've got a VA with an appraisal gap proof of funds with it. Are you gonna have any concerns with the VA?

Alex:

Say it again.

Alex:

If you have a conventional with no appraisal gap, and you have VA, and then you have another offer? That's VA and it has appraisal gap coverage, we'll say they've got $20,000 of appraisal gap. I mean, at that point you, where are you leaning more towards VA, they've got the appraisal gap?

Alex:

Sure, yeah.

Paper to paper, I look at that deal out, the only thing I would add is that I'm going to sniff the selling broker, with my, my German Shepherd bs detector to ensure that the buyer is a strong buyer, that they can make that happen. If they, if I believe that they can close if I believe that the belt the buyer can can complete the transaction, that that's a better, that's a better deal for me. I will take that deal. Yep.

And then also also, in another way to make things competitive in this market. And it has nothing to do with a loan. But just in general. In North Carolina, they're doing non refundable due diligence money. So a way for a buyer to describe to show the seller that they're strong closer is to say, well, I'll give you now it goes towards the close, it goes towards the deal. So if they're like, hey, look, I've talked to my lender, I'm an 800 beacon, I have this in the bag, no problem. I just wanna use my VA loan, they can, they can leverage that strength by using give me a give me give me $3,000 non refundable, give me $5,000 non refundable due diligence money, you'll close the deal. And that money will go to you. I don't get it. That would help me close a VA loan, or any loan actually, just to be clear.

Jon:

Yeah, yeah, another huge thing.

So what and for all the VA buyers out there, things that you can do on top of that, obviously, the first thing you want to do is get in a good position where you have cash, cash will always help you in a competitive market, then there's not a lot that can replace that. So when you start calling your lender asking for down payment assistance or anything like that, and especially in a market like there aren't a lot of markets that I know of that aren't incredibly competitive right now, I think I've heard New York City is and that's it. And maybe that's not even the case anymore. But almost every market, and I do loads all over the country, it's extremely competitive. So these things are important.

As a buyer, the most important thing you can do is start saving your cash. And I would say that's even more important than getting a hi fi go. So a lot of listing agents or Alex Felice. I don't know if you sell your property all by yourself, or if you mess with the listing agent, they're gonna ask you what's your what's your credit score? Little do they know, for a VA loan? That is, I wouldn't say it's irrelevant. And if you're as long as you're over a 640, but it's not nearly as important as the other factors as far as your residual income. So I don't know if this is going into too much detail, but I'm going to explain to you why VA is more important. Well, I think why VA has a higher chance of closing and you really just need to know one number than a conventional loan.

20:00 - 25:00

Jon:

So conventional loans go off of something called a debt to income ratio. And that is the primary factor. Now if you anyone can look at those. You don't need to be a lender or rocket science. You can go to Fannie and Freddie, you can go to the website, and you can look at their guidelines. And then boom, you know, if you if you qualify just by looking at the map, but you can see if you have over a under a 720 credit score, what your what your debt to income requirement is, and your loan to value requirement is for for that credit score, and then you could go down to 680. And below, and you can keep going. And you can do that for FHA, which has a hard cap of a debt to income as well.

So, with VA, it does not matter, your debt to income ratio, as I say that, I should say that loosely, because there's never seen a scenario where your debt to income was the issue, it always comes down to one thing, which is called residual income. So VA loans and when we're underwriting VA loans, what we're looking at is how much money you're bringing in. And then we look at how much you're paying and state tax, federal tax, Social Security, so how much money essentially you're taking out of pocket, we have a calculation that we use for the size of the house, which is called a maintenance calculation. So we use 14 cents a square foot, and we hit you for that as, essentially, those are going to be your utilities, and it's going to be what you're going to be spending on the house, and then all of your debt.

So we look at all of those things. And then based on what part of the country you live in, they have different numbers and if you're married and how many kids you have. So we look at it, we look at all of that, but there's a number. So for if you're single, and you are on the west coast, you might only need $491, leftover after your mortgage payment, and all of your bills with that it doesn't matter if you're the underwriter comes back and says hey, it looks like you've you've you thought that you were going to be able to give him two years of bonus, well, I don't think he's going to get that bonus next year. So we're not going to give that to him, which is something that, you know, essentially, that could happen for one reason or the other. The underwriter comes back and they don't agree with your income calculation.

And then on a conventional loan, your deals just died, you just went from 49% debt to income to 50. And there's no way around it, that doesn't matter who you beg you plead. There, they're not selling that loan, you're not going to get that loan, and you're and you're done. So with a VA loan, there's a lot more options. And that being the first one, you've got a residual income that you can look at. And it's a lot more lenient. So I've closed ones with all the way up to 74% on the debt to income ratio, which you'll have a hard cap on unconventional, which isn't really a whole lot, but a big monthly payment compared to how much money you're making.

Alex:

It is working a little bit.

David:

Can I just say, two seconds before we continue on because I just wanted to touch on one thing for the appraisal gap just in case there's some listeners who are kind of scared about it or whatever. I just wanted to point out one thing on the math side here, when we talk like conventional buyers, or VA buyers, we talk like 20,000 say we'll use a $20,000 appraisal gap. One other big benefit for a VA buyer is if you're buying a half a million dollar house, and you want to put a $20,000 appraisal gap on it, right? If you're a conventional buyer and you're putting 20% down, that means you have to have $120,000 sitting in the bank not including whatever cash reserves is between 100,000 for the down payment 20,000 for appraisal gap, if it ends up being called in, and then cash reserves right, your VA loan buyer and you're buying the same half a million dollar house, you literally need the 20,000 for an appraisal gap and then reserves so so there's just for those listening this who are getting like scared by the whole appraisal gap or whatever, if you were to do the math on that, that's that's like 4% down in that scenario, which would be the appraisal gap.

Now I'm not ever going to advocate for buying a house over appraised value, I mean, the situation will dictate long term strategy, yada yada. I'm not a fan of the idea of paying over asking price or over appraised value. But trying to compete in a market like this, it is nice to know that you could come in with 20,000 out of pocket plus reserves vise 120,000 out of pocket vice reserves for the same house and probably get in with about the same monthly payment because you're not paying, well. Maybe not a lot of 20% down. But if you were to do like an FHA and run the same numbers, you wouldn't have PMI and IP, all that other stuff. So yeah, just want to throw that out there just to like an appraisal gap. Isn't the scariest thing in the world if you're not putting money down, because it might not be that much money out of pocket.

Jon:

One thing you can look at depending on and I'm almost let's pretend that none of us can see the future even though obviously all of us can and we're fantastic. But let's say that we're going to look at historical appreciation, and you're in a market like San Diego, and you're seeing on average 10% appreciation while you buy a house and you have $5,000 in appraisal gap. Do you really think that you're not going to get that back if you hold it for 10 years?

And again, let's pretend that we don't know that the sky is falling or whatever the $5,000 is going to be peanuts. If you're if you're planning on a long term strategy, especially if you're doing the multifamily or even even $20,000, in a high end market like this, something to take into consideration, but let's go back to the to the person on what what does VA loan look like an escrow into a conventional I haven't even touched on what I think the best part. But we're just going on with the pure working you qualify for, let's look at a conventional loan, first of all, on a conventional loan wire is going to qualify for a lot less. So this PSC going in that really likes Alex's flip with the pink door, he's going to qualify for a lot less of a purchase price than if he was va is going to have a lot more room to go up and give Alex a lot more money for that property because he qualifies for more.

25:00 - 30:00

Jon:

So that would be the first thing there, you're going to qualify for a higher loan amount VA, just based on the standards alone, you go over the higher debt to income ratio, the debt income doesn't matter as much. It's rarely rarely taken place at once you've got the residual and your credit profiles there, there are still, you know, you haven't missed a mortgage payment 30 day late mortgage payment, the last 12 months, you're gonna have a hard time qualifying, they're still in it, you know, just like conventional FHA, you still have to meet the financing requirements. So but you're comparing them to conventional I'm, I'm going off of comparing these loans to FHA and conventional, you have so much more room on a VA loan.

Now, here's the real beautiful thing about VA. And a lot of companies, you need this FHA, as well as something called manual underwriting. So let's say that you do have a foreclosure on your record, and you can't get what we call an automated underwriting approval, you'll hear it referred to as a d u approval. And depending on what market you're in, some listing agents will require the approval just to even accept an offer, which is completely fine. Let's say that you don't have that. And what that means on a conventional loan is you're not qualified on a VA loan, you can do something called a manual underwrite. And then the guidelines are very vague. If you can, anyone can go read them. Again, you don't have to be a mortgage lender or rocket science, you can go look at the VA guidelines and look at everything and and decide if you fit that criteria. And if you're really if you're good enough at putting together a package that makes sense, and you've got loads that you've got some compensating factors, you're married, and she's not using any of the income or there's there's a whole the whole bunch of other compensating factors that you can use that will that will help push that loan through. These are things that you can't do on conventional loans, or on a VA loan, you can essentially just convince the underwriter that this is a good loan, and this will this will be a good loan that we'll get someone to buy. And you'll be able to have just so much more leeway. So it's not a done deal. There's a lot of art to VA loans. And I think that that's a huge part of why it's important to find a good VA lender. Whereas a conventional loan, I mean, do your approval as long as they calculate the income correctly and everything.

David:

What's up guys hope you're enjoying the show, I wanted to stop for just a few seconds to talk once more about Rentometer and know that they did not sponsor the second ad. This is a mid roll ad, they sponsor the beginning of the show, but I believe in Rentometer enough that I wanted to just poke my head in here and reiterate that you guys should give it a shot. It's a seven day free trial. This will absolutely save you money by helping you get greater rents on a property or helping you avoid from trying to ask for too much in rent and sitting vacant forever, which can be almost as costly, if not worse.

So I absolutely recommend that you go try Rentometer for free at rentometer.com or the link down in the show notes and give them a shot you absolutely can't lose with a free trial that will literally make you 1000s of dollars on your rentals. Now back to the episode.

Alex:

You're selling me a little bit on this. I got a flip that's coming up. I think I think tomorrow actually with yes, absolutely.

And so all right. Now, I will say this, if I can find a cash buyer, I'm taking them. You can't like as you said you can't beat cash. But I live next to a military base. There's not that many cash buyers, even the houses are cheap, even still at 160 Grand 165 grand, there's not that many cash buyers.

Now I will say one of my strategies for next year is I'm looking to buy a new primary residence just to keep competitive, I think I'm going to borrow and pay cash for a house that I want to live in and then refinance it with a VA loan once I'm in it. That makes me competitive on the purchase side and allows me to cost me a little bit of money to do the refinance. But that's gonna have to pay for the loan anyways. So for people out there who maybe have access to capital but don't want to use it, you can do both. You can be competitive with the cash purchase and then refinance into VA. Can you do that?

30:00 - 35:00

Jon:

Oddly enough? No.

So VA requires you to pay off a lien. In order to do a cash out refinance, you have to pay off a lien. So you'd have to have some mortgage on the property or a lien on the property that gives…

I’ll give my mom $300,000. She'll give me a loan for...

Jon:

It has to be an actual.. I like where your head's at, because I've actually, trust me, I would have done it so..

Alex:

Even if 90% down, it doesn’t matter.

I'll go get a hard money lender, it doesn't matter. I'm gonna get a hard money lender and pay a freakin 12% for 90 days.

Jon:

So my thing would be that you don't have to, and I can tell you that we've I've beaten cash offers and and I expand my..

Alex:

Jon, you're talking about my dream home. Okay, we can't be going on. Jon beat the cash buyer once. No, I can't take that..

Jon:

No, this isn't once this is. This is normal.

You can but here's the thing you have to, you'd have to ask your questions. So what? What questions would you have as a listing agent, which would have been great. Are you licensed to sell residential? I know, I know, David is.

Alex:

Yeah, I hate brokers.

David:

So Alex and I are like this, but neither of us has ever sold a house with our license..

Alex:

I'm not licensed.

David:

You're not?

Okay. Alex is not licensed. I am. And we still have neither ever sold a house with a license.

Jon:

No, some of the surrogates for people that are VA buyers, and they're thinking they're thinking they're thinking the same thing, David, for the purpose of this, since you are a residential real estate agent, I would like you to ask me some questions. And we'll talk about and we'll see, you know, and these are some of the things that these VA buyers can give to their agents as tools to why we should go VA.

David:

Can we go back to the part where I said, I've never used my license to sell a house?

Jon:

Well, you know what, David, for the first time.

David:

I'm not sure what you're getting at here. So I don't want to..

Jon:

What questions would you have as a listing agent? Because I know Alex has already given me some concerns.

David:

Yeah, I mean, I guess the concern.

Like we've touched on inspection, we've touched on appraisal, we've touched on the rumors that the VA loan takes forever to close and it doesn't close. It's not reliable. I think those are the main ones. Is there something we're missing?

Alex:

Since we're looking for controversial things to talk about. In 2018, I wrote an article for bigger pockets. That the title the big reason that the VA loan program is a trap for new rental investors.

Jon:

Because an owner occupied loan, but okay, let's, let's let's reference. Let's reference that then. And let's hear some of your points, because maybe we..

David:

Will set this super official scholarly article that we got going on.

This is an official resource.

Alex:

This is not a cited source. It published what I say and now we're all gonna have to listen to it. Um, you do not have to pay PMI. Let's be clear, you do not have to pay PMI for a VA loan. But you do have to pay a funding fee? Is that correct?

Jon:

As long as you have, if you have any VA disability at all you do not. Or if you're in the middle of the claim, you'll get that reimbursed. But if you don't have any VA disability, you do have to pay a funding fee. It's 2.3% for first time use and then 3.6% for subsequent use half of a percent or anytime you do an introduction loan or refinance. So want to get that quick spiel, and that's as of 512 2021 case, it changes tomorrow evening.

Alex:

Okay, here's the only downside for investors, if you're a retail buyer, is that what most of you deal with was with retail buyers?

Jon:

Yes. Okay. So for my people here who are investors, back in 2017, and 18, before real estate became bananas, where it is now where people are grossly optimistic. And especially on military bases, there's this idea that a soldier will buy a house in Fayetteville, with a VA loan and live in it for a year or two, and then he'll PCS and then he'll rent it out. And then they'll go to the next place, and they'll PCS, and he'll rent and buy a place with a VA loan. And then he'll live there for two or three years, oh, PCS, and he'll do this across the country. And there's a myriad of reasons why this is a kind of a lousy idea.

But the thing that I wanted to explain to investors, not to retail buyers, is in real estate. The first rule of real estate that people forget, especially when buying houses out of state is location, location, location. People forget that that's okay. The second rule of real estate in my estimation is you make money when you buy with the view loan, you got to pay cash, you got to pay retail. You can't buy a property that needs rehab. Is that correct?

35:00 - 40:00

Jon:

There may be at the VA, right you have there is a VA renovation loan that David and I will be taking over is now offered. But if it needs it, it depends. I've definitely financed a few properties that needed rehab. I mean, they're older and they have a lot of potential for flips. But you're talking if you're talking full gut, you're probably what you're doing for your flips, where there's no flow, like no flooring is an automatic no go for VA, right, no AC and stuff like that, like they that can be.

Alex:

So I want to express just to our investor listeners that the VA loan is a great way to get into a property. But you're buying that thing, retail, so you're buying that with no, especially if you're doing zero down, you're buying that say you get the property, we're talking about the efficacy of disclosing the loan Fine, let's say, let's say I agree with you with everything you said.

So, um, but I want to make sure that I talk to our investors and say, Look, this is a good way to get started. If you have low money, it's a good way to get into homeownership, it's a good way to, to understand the responsibility and feel the responsibility of owning your house, maybe you can rent out a piece of it to Airbnb and make a little bit of money, maybe it'd be a good rental later, but you are buying it retail, there is no way to buy at a especially in this market at a discount. I was like there is no way but my gripe with the VA loan was not the loan itself, it's that the propensity to encourage people who want to be investors to buy something because they have no capital, or very little capital. And this gets them in rather than taking the long road and being and saying I'm gonna wait and have cash or and or buy something at a discount and improve it by something distressed and improve it. This encourages or entices people to go and buy something because they can. But buying a retail home, in my opinion, is contradictory to savvy investing. Do you agree with that?

Jon:

The first thing is if you buy a house, are you saying that you can buy a house conventional or FHA? Are you saying that you are comparing this to the other two of those other loan products? Are you comparing this to buying a house hard money or something like that, you know, hard money withdrawal and flipping it?

Alex:

I'm saying that the VA loan because they advertise 0% down disproportionately entices people with not much capital to buy assets that are not wholesale, they're not discounted. They're encouraged to pay retail for a home that they may not otherwise. Now the FHA does something very similar with three and a half percent. So I'm not just saying that as a VA loan specific thing. But 0% down is for somebody who's just getting into real estate or just learning about investing, that is a deal. Like I have no money, that can be an enticement that can disproportionately encourage them to make a purchase that is not necessarily a Savvy Investment.

Jon:

So here's why I would disagree with that. Because I've seen it a lot. And what I see is people that are in the Marine Corps active duty, because I think what we're targeting right now is specifically active duty people that they didn't get in and get out and now have the money for 50% or or just stayed you know, not making any money. This is we're targeting looking at the younger audience, right. And what I've seen is people that buy at their first duty station, let's say that their first duty day and I'll use an exact example. A client of mine bought a property in North Carolina, first first duty station, and one in Jacksonville. And then with the remaining of entitlement. He bought a property in Oceanside. When he got stationed at Pendleton I don't know how much money he had, at the time he bought in Jacksonville but he was young, so probably not a lot, right. He rented it out, maybe it broke even for him.

But by the time he bought his second property has some equity in it. Now I bought this property in Oceanside and he lived in it and you know with appreciation and then with principal pay down, he built up to where he's at you know 80% loan to value so now he can refinance into a conventional loan. So now he has one brand to two cash flowing properties, one in North Carolina, one in one in Oceanside. And he's buying his third property in Washington DC.

Now, he did all of this with zero down with the money that he could have been spending on a down payment for his primary residence. You can go invest that money and have a market. You can do your out of state or he could have gone and bought another property in Jacksonville, instead of putting it towards his downpayment for his first primary residence.

40:00 - 45:00

Jon:

So I've seen that and that's just one example. But I've seen that over and over where I see people 6-8 years in the military, and they own two properties with a 400 $500,000 in equity in these two properties. And they have zero savings, which you would say that's that they don't have any savings, right? They need to be watching the military to millionaire podcast more, and read David's book. But what they do have is they have a net worth of four or $500,000. And the only thing they did was buy a house zero down. So if I compare it to that, I'm..

Alex:

Yeah, but that implies that real estate only goes up. What about the buyer? Right? You're talking about how long you've been in the real estate business?

Jon:

Three years or so.

Alex:

Right. You know, real estate goes down, right? It went down, it went down 50% in two months.

David:

Three or four times, right, a couple of different..

Alex:

But hang on. But my point is right. You can say you can point to a person and say, Well, this person with no savings, bought these homes, and then it went up 50% in value, now they have all this equity. And so it works. And I'm like, well, but it discounts all the people that bought houses with no equity, and no cash. And it didn't work. Because there's a cemetery full of people who did the exact same behavior and lost because of the luck of the market.

David:

Yes, survivorship bias?

Jon:

Yeah, so let's be clear, I'm not. And I'm not saying that you need, I'm saying, you still need to run your numbers, the property still needs to make sense as a rental, we're at what I would never bank on, is your route buying these properties, saying yeah, look at how much appreciation they're going to make. Your goal is a stepping stone, you get your foot in the door, you learn the terminology, you it's not gonna it's not going to make you rich. But as long as the numbers work, you when you can rent it out, and you can hold on to it, you've got your reserves, you've, you've done everything that they teach you about to do your solid real estate investing principles, but just have your reserves, you know, have your rainy day fund in case something goes wrong. There are plenty of people that sell properties through 2008 I and I think it is whether it's zero down or 25% down. If you foreclose on it, you just gave the bank more money. It's not like you're keeping any more money.

Alex:

So well. So actually, so Okay, great point. Great point, right, actually, last one, David, and then I'll let you talk.

Jon:

I see where you're going with this.

Alex:

More so than equity, right? More so than equity is cash on hand. Because one, let me tell you something houses have, they require costs. And so maybe nine out of 10 buyers, I don't know the real, I don't know the number, maybe nine out of 10 buyers buy a home, they like it, it's a VA retail home, and in five years, they don't have to put any money into it. And then how many buyers find out soon after purchase, they have to sink some money into it, you have to have cash on hand. If the market tanks 50% and you hold on to it, who cares? If the market tanks 50% and then you have a repair and you can't afford it. And you have no equity. You're getting gravestone, you're financially gonna have a sad day.

Jon:

Right.

Alex:

And I worry, and I don't know this, I'm just speculating. For the sake of argument, actually. I worry that VA loans that advertise 0% down, encourage people with low capital to make big purchases, that it works out. No problem until it doesn't. And then it's like, how could this possibly happen? And it happens every 10 years. If..

David:

I think, I think there's obviously there's inherent risk when you go 100% loan to value on something and you don't have any cash, right? The market turns down, that's a really bad spot to be in. So I agree with where you're coming from.

I think if we were to go apples to apples, all things being equal, though, if I had to buy if I was buying a $100,000 house, and I had $20,000 I get asked this a lot. For some reason people think that putting a down payment on a VA loan anyway is like the greatest idea ever. Like it's like this, like, Oh, I have 20% equity. So I just want to say this for the recording if you had $20,000. And you could put it down on a $100,000 house and you can use the VA loan. Don't because you're an idiot. You can't tap that you won't know I don't know what No, I'm not even gonna preface that. Yeah, you're an idiot. And here's why. Because you won't be able to pull it via refile it like that. You won't be able to get it out via refinance, you would have to sell which means that you instantly lose 6% for your commission, maybe 4% on the good end, right.

But if you have $20,000 down and you use a VA loan, you go zero down and you keep the $20,000 in reserves. You are now very well situated to mitigate the risk of a downturn, and not having equity because you've got $20,000 to do a roof, you know, refrigerator, air conditioner or whatever, like you can buffer a lot of those issues that we're talking about.

45:00 - 50:00

David:

So, you know, that's one thing I really like about it. I think, I think the argument that we're making here is that, you know, 0%, down with no cash is very risky. And that's absolutely true. There is inherent risk with that, when compared to having cash in reserve, or having the ability to make the down payment and having equity, right, that's just inherent, so make sure you know what you're doing.

Alex:

Yeah, if I had a $100,000 house and $100,000 in cash, I would get a zero down VA loan all day long, all day long. For sure. I love the debt, as long as the house kind of ish makes money or breaks, even, you know, whatever the situation is, I'm gonna live in it. But yes, I'm more worried about cash on hand. And again, to reiterate, I worry that people get incented to get into something, they pay retail, and then they don't have the capital in case something goes wrong. And they're incented because of the 0%. down. And so let me ask you this, what are the VA loan reserve requirements? for a loan?

Jon:

Right.

Yeah, so and, and, and with a normal VA loan that you didn't, which is a risk, you don't need, you don't need just for a single family property. Or if you are, you're even buying a multifamily property being qualifying off the rental income, and then you don't own any other properties. And you don't, you don't, there aren't any reserve requirements.

So you're right and for the entire audience, know what you're doing, which is one of the why preferences in the first place, saving cash is important. And Alex is right, the market will not appreciate forever, eventually prices are going to go down, you want to make sure that you'll either be able to rent it out and whether you know, the market turns and then you need to replace a roof. And that's $10,000. Those are just smart prints, Smart Investing principles that you need to have cash.

So that being said, if we're ever talking about just reserve requirements for everyone looking to buy multifamily property and that idea, then there'll be this guide to military life. You can learn more. If we are looking at buying a property where you're where you need the rental income, I like it. I like it almost as much as I like those pants. We both had to say the pants at the same time. So and for anyone listening to the audio. Yeah, anyone listening on audio, you need to go watch this just for Alex's pants. So.

Alex:

Like camels, camel joggers in my pink t-shirt. We're working for you, Jon.

Jon:

Oh, yeah, it's, it's selling me just as much as I'm selling this VA loan right now.

So reserve requirements, if you're buying a multifamily property, and you're using a rental income to qualify, which is another great thing about VA. And Alex is going to hate this because Alex is an underwriter as I'm starting to learn, and he's looking at all the different risk tolerances, that against the market turns and everything like this. But with VA, let's say that you don't qualify for the property on your own. And this is what I would consider a beautiful part of VA is you can buy a multifamily property as long as it's zoned multifamily, and you can use 75% of the rental income that the property produces to offset your debt. It's qualifying income for you that's income that you receive.

If you decide to do that, or if you need to do that you do need to have six months reserves after your closing cost. So there is a reserve requirement gets all of your 10 stops paying rent, you'll be able to cover..

Alex:

Why would you think I hate that? I like that much better. Right. You know, you have a three unit tenant diversification and they have a cash reserve requirement. I think that's way better.

Jon:

How do you feel about someone covering where their mortgage payment is more than their income?

Alex:

I think that is a matter of experience and reliability of the asset in the market that it's in right. I just bought it alone. I just bought a property. I just bought a $3.2 million property right now. I don't have a job. My income does not say she's making fun of me.

My income does not cover the $15,000 mortgage, whatever it is right or $7,000 interest only for two years was up. But still I don't make it. I don't have a job. So I don't have that on dti. And yet they gave me the loan. Why? Because it makes money because I'm a reliable operator. I have a track record. They know the asset. We've done extensive due diligence, right that bad boy makes money.

50:00 - 55:00

Alex:

So if you go buy a four unit right and say you buy at a reasonable price, you don't pay $60,000 over ask on a $300,000 property or something like this. And you're gonna get reliable rents and there's a reliable rent roll and you know, it's your first property. But let's just pretend that you're the most well established first time homebuyer of all time, right? You got a great beacon, you got a long track record, you're a mature individual. And the mortgage is more than your income. Well, what is the income of the property? I don't care that the person can cover it. I care that the asset can cover it with a healthy dscr. Yes, I was in underwriting for a long time. Yes.

So my job is… Everybody's everybody's plan works on paper. Okay, everybody's got a great plan, like I do. I'm like, Yeah, sounds good. Let me tell you the reason why it's not gonna work out. Right. That's my job. I prefer this. And in fact, I think going off and using a VA loan to buy a Four Plex is not a bad idea. I think it's harder now. Because they've been scooped up, do amania everybody's market is different here in my market. People come in and like, I want to buy two, three or four Plex. And I'm like, they don't exist, cuz they never built them here. So there's probably there's probably there's some they're around, but they did they made them for a short bit. There's not that many. But in some markets, there's plenty. in some markets, they still build them. I don't think that many, but I like that idea a lot better.

Jon:

Okay. Yeah. And go ahead, David, I know you want to talk?

David:

No, I mean, finish your point. And then I was trying to do this kind of where I was trying to take the conversation anyway. So.

Jon:

Do the multifamily, right, because that's, that's a huge part of what we're doing. So we've covered it. And just to kind of recap on everything that we've talked about on the single family, yes, like Alex said, buying a property $60,000 above ask on a $300,000 property and then using you know, all of your capital to do that, and then having any money, you're really putting yourself in a bad situation in case the market turns, and then you need to sell or let's say, it just doesn't hit statewide, it doesn't appreciate. You need to sell, you're putting yourself in a bad position, you're gonna you're underwater. So we're all clear that single family property, you want to say you want to have reserves, you don't want to spend every last dollar on your closing cost. And then when your first mortgage comes up, that you're never going to save any money.

So we're all clear that that's the case. And then we've we've kind of covered everything on, on that verse a can on a conventional loan, the same principles would apply on any type of financing, or if you're just starting out in real estate investing, and you don't have any cash and resources important.

So now moving into the multifamily. That's a lot of what we do if you can do it in your market. It's fantastic. So going into specifically what you're looking for there, and what's realistic and what's not. So a lot of people say I want to..

No, go ahead.

David:

And I just segment this real quick, so that it's the reason we're going into multifamily. So we talked, we poked holes on the VA loan, and talked about risks associated with the VA loan, we talked about why some sellers don't like it. But this is getting into some of the benefits for why the VA loan is not necessarily not for investing, but some ways that you can use it that are very beneficial, that are kind of unique to the VA loan. And this is one of the reasons that I love it, right? Like there are definitely risks inherent with some of it. But this is the last 10-15 minutes of this is going to be like this is the big benefit, in my opinion for this. So that's why we're talking about multifamily.

Jon:

Let's do it.

So first thing, the first thing we're going to look at is and we didn't we didn't cover and I think I kind of skimmed it did a brief intro on another VA loan. But obviously you have to live, you have to live in the property. So a lot of people have reached out and asked me that they don't really want to buy an investment property via you have to live in one of the units and the only way you're buying investment property has to be the multifamily has to be the multifamily route.

So if you have six months reserves, you can use the rental income as we discussed earlier. And you can use that to qualify. So somebody that like for example is Sergeant that makes $6,000 a month in San Diego can qualify for a 1.2 $1.3 million property as long as the rental income makes it to it offsets where your residual income works. So you can do that. If you've had the six months reserves. What you're doing then is lowering your living expenses, which is the biggest thing that we're going to focus on. So I don't know if any of you guys have read, set for life, but I know but by Scott trench that's a great one if you're just looking on a path. One of the big things he talks about is if you can lower your living expenses, the amount of money you can save drastically increases if you can compare it to cutting out your Starbucks coffee or if we're talking about You know, Marines tattoos and dip.

55:00 - 1:00:00

Jon:

So you can keep doing that, you can keep dipping your candidate and you can keep getting your moto tattoos across your back, that's completely fine. As long as you are cutting your living expenses, especially out here, you've got people that are living out in town. And if you're renting, you're probably looking at 2200, $400 a month for an apartment that you're looking at a house, now you're probably looking closer to $3,000, you can buy a multi family and you can lower that to 2000, I've seen zero and I've seen people make a little bit of money, the biggest thing is you just want to run your numbers. Because when you leave that property, which you will eventually have if you're in the military and you're stationed somewhere else, you want to make sure that that is going to be a cash flowing asset for you. And you can't bank on the appreciation.

So that being said, it's a great product for people that are there who want to get in the door, you want to learn gear your systems in place for your tents, get your however, they're going to pay you your follow up for following up if they're paid rent late. All of these things you'll learn all the things about being a landlord, you'll learn by buying a multifamily property, and then when you do move out of it and move on to your next one. Now, if you're if one of the units goes vacant, you're not you're not in no shit situation as if you were you just bought a single family that in San Diego or your mortgage payments $3,000 a month, you make $5,000 a month and as a sergeant or $6,000 a month and then you move somewhere else that that property goes vacant, you spent all your cash reserves on your dip and tattoos. And now you're in a bad situation. So those are a huge benefit of the multifamily.

David:

So just to give a quick breakdown on this because it is scarier to do this in like like, like my first duplex was like $81,000, I was out of pocket like 100 bucks a month to own it. And when I moved out, I made like 300 bucks, right? Not scary. But if you're talking about someone like a sergeant, buying a $1.2 million, Four Plex, like that's, that's scary, especially when you look at like a $6,000 a month mortgage, and you can see the inherent risk there. So and then your people look at it, they're like, Well, I'm not going to cash flow on that. So just want to break this down real quick, right? Like, let's say one point to say your mortgage is around 660 500 a month, something like that. So you're looking at somebody, then you rent the other three units in San Diego like 2200, right, so you're gonna be like breakeven, maybe you're probably still out of pocket like 1000-1500 a month. Even if you have roommates, you might break even, you're probably not breaking even you are however, saving your entire housing allowance, or at least more of it than you would have been to live in an apartment anyway. So your overall living expenses are probably still lower, and you're probably paying down 2000 to 2500 a month in principle pay down.

So even if the market goes down, that's $24,000 a year if you're there for three years, that's $60,000 in equity that you're building through what you would have been paying to rent as a landlord. Plus, you might be saving 500 to 1000 a month on your overall expenses. And then when you rent that unit out, it's not going to cash flow like a king, but it'll cover all your expenses and then a little bit. And so the mentality for like the big scary markets for house hacking isn't like how much is this going to pay me to live in it? How much am I going to save every month? How much principle am I paying down? And like, it's got to be a long term play. This can't be like two year like I hope the market goes up. It's got to be like, do I want to own more properties here? Do I want to own this for you know, the next 20-30 years. But there is some definite advantage to that, especially when you factor in. And I'll let Jon touch on this more so. But if you were to compete, like let's say you were a normal investor buying a FourPlex, here in San Diego, buy a, say a million dollar house, you put 25, you have to put $250,000 down, and you're locking in a four and a half 5% interest rate, you're honestly not going to be saving that much month over month on your mortgage, you're as the VA buyer paying zero down and moving into this house with a 2.75 and I would have to do the math on this. But your monthly payment is probably not much more if not lower than someone who put 25% down but it's paying four and a half, five, five and a quarter percent interest on the property. So there's a big advantage there for getting your foot in the door. If you do it, right, where you're able to buy some of these properties that sophisticated investors are snatching up but you're this is where like, not saying this is for everyone. But if you have a little bit uh, if you're young and you can afford a little bit of risk and you do your numbers like you can definitely win here in a pretty cool way. There's some pretty cool opportunities there for this.

1:00:00 - 1:05:00

Jon:

Yeah, and the scenario you just said so I don't know the exact numbers anymore, but I ran this scenario with another ello in my office and just bought a $2,000,000 fourPlex in LA. And he used some of, bought down the points he got down to a 2.25 interest rate rates have gone up a little bit since then. But we were just comparing 2.25 with zero down. And we looked at someone putting 25% down and the rate that they would have on mortgages, one on conventional loans, you're going to have a higher rate just for being a multifamily property on va, those rate adjustments don't exist, where conventional loans where you have rate adjustments.

David:

I just did it.

So a $750,000 loan at 4.5% is 3800 a month, million dollar loan should be zero down at 2.75 is 4082. So $282 a month more, and you saved a quarter million dollars down.

Jon:

Yeah, you can do that same thing. Yeah, exactly.

The same thing $2 million, with the 2.25. Or the 4.5.

Yeah. So that's a huge benefit. I mean, you're going to have the monthly payment at the same or even close to maybe even lower than the investor buying this property with 20 to 25%. down. So huge a benefit that you can only get that you can only get with a VA loan. And, and something that I think that people should be taken advantage of for sure.

David:

So I think we've covered most of what we can with the VA loan. So I don't know if we, I mean, I'm not saying that there's not more we can cover, we can always do a part two, I always put the finger up. Alright, not trying to wrap yet. I was gonna ask you some questions. But what do you got?

Jon:

Before we wrap up, I want to just make one thing clear, because this is the most commonly asked question, is how many times can I use it? And what the hell is a one time restoration. And the sad thing is, I really hope that every single one of your fans, here's the outcome, your fans, your fanboys, here's the so because the lenders aren't aren't teaching about it at all. It's the one time restoration.

So let's say you do like what I was talking about earlier, you buy a property, and you want to go buy it your second property VA and you've already used all your entitlement. If you refinance into a conventional loan, to recoup your VA eligibility to go buy another property using a VA loan, you use something called a one time restoration. And it is what it sounds like you only use it one time.

If you want to go buy a third property, VA, you have to sell the other two properties that were financed VA, you can't just continue to buy properties using using your VA loan as much as some people think that you can because there's no cap, the cap is just it's never your full entitlement, you're not restricted to the county conforming loan limits. That's the only thing if you have used some of your entitlement, the remaining entitlement goes off of the conforming loan limits. But you can look up FHFA conforming loan limits for 2021 in your county, and you can find out what those are.

So I just wanted to touch on that because I think that's something that's not talked about enough. A lot of people are saying you just build a portfolio and buy a million properties VA and just have 35 VA loans at the same time.

David:

Valid and as far as buying a second home, I wrote an article on this. But the answer for 99.99% of you is it depends on your specific situation. There's no like, Oh yeah, it's this easy. This is the answer. It's always dependent on where you bought, how much you bought, blah, blah, blah.

So rather than just blatantly asking that as a blanket question, reach out to a lender and speak to them about your specific situation because that will dictate whether or not you can buy another property depending on a million different if this then that scenario.

Alright, so real quick, Jon, you probably never listened to the show before because you live with me. So you probably like Yeah, I just hear it all through the walls. And I don't blame you. So this might be a total shocker question that I asked every guest. But if an E one, E two walk up to you asking you for advice, life, business, real estate, whatever, what's the one thing you wish you'd known when he joined the military?

Jon:

That's a good one.

David:

So he doesn't listen to the show. He's just like you see, I told you Alex, you guys are getting along great. You don't listen to anything.

Jon doesn't even know, he didn't even know I have a podcast he lived with me for a year.

Jon:

I haven't finished reading your book either. I'm gonna be honest but um it's on my to do list for next year. So when I retire.

I think the biggest thing for me when I joined the military is I did about two or three years of the two years really of the Lance Corporal. Oh shit I have I made how much this month $1500 I'm rich compared to all my friends. So I can buy $1500 worth of guns this month. And I would look at money as it was coming in every single month as this just came in, what am I going to spend it on my business like this is fantastic. It's going to come in next month, guaranteed. So you bet your ass I'm already planning on what I'm going to be buying in the next month.

1:05:00 - 1:09:00

So it was like boot camp come back $1500 in my bank account. I went and bought Eotech and new ammo, and then obviously took all the girls out for drinks and did the whole, the whole thing. I'm a marine and just thought I was the best thing ever.

So I think the biggest thing would be really knowing the importance of saving and then getting my tsp set up while I was in boot camp, because they don't always do that for you, as though they'll say that they're doing it for you. But you would want to check that right out. Don't get and put as much money in your tsp as possible when you're early on. And then just forget about it.

David:

Alright, a resource you recommend?

Jon:

Lending real estate investing or what?

David:

You don’t have to bring that book closer if you're aware of a hole in your floor and running back and forth.

Jon:

I'm going to recommend the out of the military millionaire podcast be my first resource and then the military to millionaire Facebook group. After that, we go to the military to a millionaire website. And then I would read the no BS guide to military life by David Pere.

Alex:

Hey, no solicitations on this show. Okay, I don’t want to hear that.

Jon:

I think, for me the biggest resource and you can find this everywhere is anything you want to do. You'll find somebody that you'll find someone that knows someone that's doing it and just take them out, just meet up with them. Or maybe you know, I'm not one of those people that thinks that you can just ask somebody that's doing anything with their life. They're usually not the people that will just say yes, I'll go out to coffee every single time with every single person that asks me but provides some value. And I think people are the best resource really as people that are doing whatever you want to do. But providing value is the biggest key. Don't ask them out for coffee, say hey, this is what I can do. And this is what I'm willing to do for you.

David:

And last but not least, where can people get a hold of you?

Jon:

My cell phone and my email would be those. Those two are the best. I'm not great on Facebook. Yeah.

David:

I will mute you before you do what I think you're about to do and give you the whole world your cell phone while I have to listen to every day like oh my god, you see how many texts today from people? I haven't had a chance to respond.

Jon:

Yeah, so before I bury myself, yeah, now I'm not gonna give up my cell phone number. But honestly, the best way to reach me, Facebook Messenger is definitely not. And then anywhere on social media is not the best way to reach me if you want.

Can you just put it in like the show notes of the show? My [email protected] Hopefully I can say that. That'd be the best way to reach me. I'm happy to answer any questions for anybody. VA, financing, any type of financing, or any other questions that people have.

David:

Absolutely, it'll be in the show notes. And as a super shameless plug, if you go on the website, we've got a link where you can fill out a little form for like recommended agents and lenders, and depending on where you're buying Jon’s one of two or three people that I recommend, as VA lenders, so you know, I'm happy to make that introduction for you guys if you reach out as well. But all of Jon’s contact info will be in the show notes next to his smiling face on some social media art.

So thanks for joining us, brother.

Alex:

Great to meet you, Jon. Thank you. This was very informative and fun.

Jon:

Yeah, I appreciate it. It's been fun. Thanks, guys.

End:

Thank you for listening to another episode about my journey From military to millionaire. If you liked it, be sure to visit Frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action.

Jon Lallande quote card

Episode: 145

Jon Lallande

Join your hosts, David Pere and Alex Felice, with guest Jon Lallande as they talk everything about VA loans, what makes it cool and not cool, and the one-time restoration entitlement that VA loan users need to hear about before they start building their portfolios.

Throughout the discussion, the guys build up and poke holes in everything they can discuss regarding VA loans and their pros and cons. For Jon, a user benefits from a VA loan’s higher chance of closing than other options. Meanwhile, Alex thinks it is disproportionately advertised to entice people into not-so-savvy investments.

As a piece of advice to first-time investors, Jon believes in the importance of saving, understanding the available options on the table, and understanding how the market doesn’t always just appreciate forever. In this episode, tune in to the different opinions that weigh out about VA loans as the guys tackle the topic in technicalities.

About Jon Lallande:

Jon Lallande’s mission is to provide clients and real estate professionals with the ultimate home buying experience. Jon’s goal is to take the stress off of the clients and the real estate agent by performing with consistent communication and swift timelines.

Jon specializes in closing loans in as little as 15-21 days and offers a wide variety of loan programs, including; Jumbo, Conventional, FHA, VA, and refinance loans.

As a prior Force Reconnaissance Marine and Scout Sniper, Jon loves working with military veterans and is a subject matter expert when it comes to VA loans. Whether it’s a first-time home purchase or a multifamily “house-hack,” Jon often finds himself helping to educate veterans on real estate and real estate finance.

Sponsor: Rentometer

https://www.frommilitarytomillionaire.com/rentometer

Outline of the episode:

  • [06:26] VA Loans: A great loan for veterans when they’re on active duty.
  • [08:03] An overview of a first-timer’s VA loan.
  • [14:02] On FHA loans over VA loans.
  • [19:37] The advantages of going for a VA loan.
  • [26:30] This thing we call Manual Underwriting.
  • [34:39] The rules of real estate and buying houses that people tend to forget.
  • [38:21] Are retail homes contradictory to savvy investing? – Jon disagrees.
  • [46:17] What are the VA loan reserve requirements?
  • [54:00] On VA loans, multifamily investing, and the biggest thing to focus on.
  • [01:02:04] What is the one-time restoration of entitlement?
  • [01:05:38] Understand why you should save.
  • [01:06:39] Your biggest resource is somebody.

Resources:

Website:              https://crosscountrymortgage.com/

Email:                    [email protected]

 

Set for Life – Dominate Life, Money, and the American Dream, Book by Scott Trench:

https://www.amazon.com/Set-Life-Dominate-American-Dream/dp/0997584718

 

Follow Our Journey:

Website:              https://www.frommilitarytomillionaire.com/

YouTube:             https://www.youtube.com/c/Frommilitarytomillionaire/

Facebook:           https://www.facebook.com/groups/1735593999901619/

Instagram:          https://www.instagram.com/frommilitarytomillionaire/

 

Grab your book copy of The No B.S. Guide to Military Life – How to Build Wealth, Get Promoted, and Achieve Greatness by David Pere:

https://www.amazon.com/B-S-Guide-Military-Life-greatness/dp/1736753010

Get a personal introduction to one of our vetted real estate agents or VA lenders: https://www.frommilitarytomillionaire.com/va-realtor/

Advice to an 18-20-year old:

Invest in your TSP and don’t live paycheck to paycheck.

Recommended resource(s): The No B.S. Guide to Military Life

https://www.frommilitarytomillionaire.com/book/

Sponsor: Rentometer

https://www.frommilitarytomillionaire.com/rentometer

Real Estate Investing Course: https://www.frommilitarytomillionaire.com/teachable-rei

Recommended books and tools: https://www.frommilitarytomillionaire.com/kit/

Become an investor: https://www.frommilitarytomillionaire.com/investor/

SUBSCRIBE: https://bit.ly/2Q3EvfE

Website: https://www.frommilitarytomillionaire.com/start-here/

Instagram: https://www.instagram.com/frommilitarytomillionaire/

Facebook: https://www.facebook.com/groups/militarymillionaire/

My name is David Pere, I am an active duty Marine, and have realized that service members and the working class use the phrase “I don’t get paid enough” entirely too often. The reality is that most often our financial situation is self-inflicted. After having success with real estate investing, I started From Military to Millionaire to teach personal finance and real estate investing to service members and the working class. As a result, I have helped many of my readers increase their savings gap, and increase their chances of achieving financial freedom! – Click here to SUBSCRIBE: https://bit.ly/2Q3EvfE to the channel for more awesome videos!

THIS SITE IS INDEPENDENTLY OWNED AND OPERATED. ALL OPINIONS EXPRESSED HEREIN ARE MY OWN. THE VIEWS EXPRESSED ON THIS SITE ARE THOSE OF THE AUTHOR OR THE AUTHOR’S INVITED GUEST POSTERS, AND MAY NOT REFLECT THE VIEWS OF THE US GOVERNMENT, THE DEPARTMENT OF DEFENSE, OR THE UNITED STATES MARINE CORPS.

Share this article soldier!

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
David Pere

David Pere

David is an active duty Marine, who devotes his free time to helping service members, veterans, and their families learn how to build wealth through real estate investing, entrepreneurship, and personal finance!

Leave a comment trooper!

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Your Heading Text Here

never miss a post

Join the thousands of other Military Millionaires that are building their real estate portfolio!

ABOUT

Custom Blog Design by RapidWebLaunch

Copyright 2020 From Military to Millionaire