A number of years ago the IRS created the rule where if you occupy a house as your primary residence 2 out of the last 5 years, when you sell the house you pay NO taxes at all on the profits from the sale. This rule is perfect for active military members to take advantage of who all qualify VA loan and move every few years when they re-assigned. Every time an active military members moves to a different part of the county, they can search hard for a really good deal on a house and get 100% financing by getting a VA loan. During their 3 or more year stay in that area, they could perhaps add a little value to that house by fixing it up, etc… Then when they move to a different city, they could sell the house and pay NO capital gains.
Imagine if you did this throughout your entire military career how much cash you could amass without paying ANY taxes! And they every time you moved and made profits from the sale of your house, you could invest that savings in additional cash flow rental property or some type of other investment that earns a good yield. After moving 7 or 8 times you could easily amass a million dollars from just this practice.
Now is a much better time (than say the last 5 years) to use you VA loan benefits and get a VA loan to buy a house as the housing prices in much of the U.S have fallen by large percentages where there are some incredible bargains out there not seen in a decade. To make this “VA loan serial home buyer” strategy work, you need to do your homework and make sure you are getting a good value on a house in an area and neighborhood you feel has potential. Additionally as mentioned above, you can look for a place that you can add value to by fixing up or other methods to help force up the appreciation further.
So I hope this article makes you think about combining your VA loan benefits with the frequent re-locating involved in an active military career to increase your net worth and savings.
Some great advantages of VA loans:
- Maximum VA loans and jumbo VA loan up to $962,500 in the San Francisco Bay Area Counties, $593,750 Los Angeles, $437,500 San Diego, $593,750 Orange County (feel free to call for your county limit)
- VA loan credit score can be as low as 600 for 100% financing, you don’t need perfect credit
- VA loan interest rates for 30 year fixed loans STILL at historic lows
- VA lending has the most generous debt-to-income ratios – VA loans can allow upwards of 55% ratios where conventional with <20% down is 41% with min 720 credit
- Second VA loan (and third, fourth, etc…) available if you have paid off your first VA loan
- 100% financing on VA loans and the seller can pay all your closing costs, so you can buy with almost zero out of pocket
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and VA specialist)
858-922-7899
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