Financing is one of the most important aspects of buying investment property. The Department of Veterans Affairs (VA) will provide the loans on the properties you buy from them. No need to shop lenders or pay mortgage companys large closing fees. The VA makes it simple and financially smart to borrow from them, and you do not need to be a Veteran.

Advantages of VA Financing

Only 5% Down
The smaller the investment in the terms of down payment, the larger the rate of return, because of the power of leverage.

Leverage is what makes real estate advantageous. Leverage in real estate is the ability to control a large number of investment dollars with a small amount of money.

The VA loan allows investors to buy property with only a 5% down payment. If you were to shop around to other lenders and ask them how much down for non-owner occupied investment properties, you will get answers ranging from a minimum of 20% to 30% down. This doubles you buying power.

Competitive Interest Rates
The VA rate is very competitive. Usually at or below current market rates for 30 year fixed rate loans. (Check "Property List" for current rate).

Assumable Loans
The VA loan is an assumable loan (with qualifying). This means that down the road, if you choose to sell the property, the buyer can take over your existing loan. This can add several thousand dollars to the value of your property.

  1. If the interest rate on your loan is lower than the market rates at the time you sell, the buyer will pay a premium to take over your lower interest rate loan.

  2. If (let's say) you sell the property 10 years from now, you have a loan with only 20 years left to pay. Yet the loan payments are still is based on a 30 year amortization.

Low Document Qualifying
Just complete the two page application, supply copies of W-2's, paycheck stub, tax returns and wait for approval. You do need good credit, but a couple of minor credit dings won't hurt you. Just write a letter of explanation.

Low Closing Costs
Normally when you buy a property you end up paying several thousand dollars in what we call "Garbage Fees." These fees have many names, such as, processing fee, document fee, loan points, underwriting fees, application fee, etc...Not to mention high credit report fees, appraisal fees, escrow fees, title fees, and any other fee associated with qualifying for a loan.

With the VA financing the only "garbage fee" is a 2.5% (of the loan amount) VA Funding fee. Other closing costs include; prepaid taxes, prepaid interest, prepaid insurance, and, credit fee and deed recording fee.

We usually estimate approximately 3% for closing costs.

The bottom line is, you can not get a better loan for your investment properties anywhere!

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