# How to Invest in Real Estate When Your Credit is Maxed (High DTI) Source: https://www.youtube.com/watch?v=k2TwMb30e98 Recap page: https://rapidrecap.app/video/k2TwMb30e98 Generated: 2025-12-17T14:34:54.468+00:00 --- ## Quick Overview Leveraging 100% financing with a VA loan for house hacking a duplex is generally not a bad idea, especially since the VA loan allows for low/zero down payment, but the risk is that if property values drop or renovation costs spike, the investor could end up underwater or unable to cover expenses, requiring them to be hyper-aware of local market conditions and have a contingency fund. **Key Points:** - Leveraging 100% financing via a VA loan for house hacking a duplex is considered viable because it minimizes upfront cash outlay. - The primary risk of 100% financing is being underwater if property values drop by even a small percentage (e.g., 2%), or if renovation costs increase unexpectedly. - The questioner, Jordan Craig, is house hacking a duplex in Chattanooga, TN, and needs financing advice for a potential second property purchase while still occupying the first. - To mitigate risk, investors should lock in materials early, build relationships with consistent contractors, and budget a percentage buffer for unexpected renovation costs. - The general advice for investors operating with high leverage is to know the local market dynamics (like Chicago's high appreciation/low supply vs. Houston's high supply growth) to better manage risk. - For the specific house hack situation, the expert suggests that if the investor's DTI allows, using a DSCR loan or a HELOC for rehab funds while keeping the VA loan on the primary residence is a strong strategy. ![Screenshot at 1:23: The question from Jordan Craig outlines his situation: house hacking a duplex, high DTI, and seeking advice on using a VA loan for 100% leverage on a second property, specifically asking about risk mitigation.](https://ss.rapidrecap.app/screens/k2TwMb30e98/00-01-23.png) **Context:** The video features a Q&A segment from the BiggerPockets Real Estate Podcast, hosted by Dave Meyer, where he and guest Henry Washington answer listener questions. The first question comes from Samuel Shemtov, who struggles to get real estate agents to stay on the phone once he reveals he is an investor. The second question, posed by Jordan Craig from Chattanooga, TN, asks for advice on financing a second property purchase (a duplex, house-hacked) using 100% leverage via a VA loan, given their current Debt-to-Income (DTI) ratio is already high from their first house hack. ## Detailed Analysis The discussion addresses two main listener questions. The first, from Samuel Shemtov, concerns why real estate agents might hang up when they learn he is an investor, which Henry Washington explains is often due to agents viewing investors as simply salespeople who won't yield immediate results, or because they lack experience serving investment clients. The advice is to clearly state what the agent gains (closing deals) and be upfront about their goals to build trust. The second, more detailed question from Jordan Craig asks about leveraging 100% financing via a VA loan to buy a second house-hacked duplex, given his current DTI is already maxed out by his first property. Dave Meyer concedes that 100% financing is risky because even a small property value dip or renovation cost overrun can put the investor underwater. He advises that while Chicago is a strong, albeit expensive, market with high appreciation, the risk of supply growth outpacing demand in other large cities like Houston should be considered. For Jordan's specific situation, since he is only 6 months into his current owner-occupied mortgage, the expert suggests exploring a DSCR loan or using a HELOC (Home Equity Line of Credit) against the equity built in the first property to fund the rehab/down payment on the second, allowing him to keep the VA loan benefit for the primary residence. The general advice is to be realistic about market fluctuations and cost overruns, and to use tools like RESimpli to track KPIs and manage the business efficiently. ### Agent Communication Issues - Agents often hang up on investors because they perceive them as salespeople lacking immediate closing potential, or because they lack experience with investor-specific transactions. ### VA Loan 100% Leverage Risk - Leveraging 100% on a VA loan is risky because any market dip or unexpected renovation cost increase can lead to being underwater, especially since the investor may not have large cash reserves for immediate expenses. ### Chicago Market Assessment - Chicago is considered a 'sleeper city' for real estate investing due to its high appreciation and multi-family supply, despite higher property taxes. ### Financing Strategy for House Hacking - For Jordan's situation (house hacking a duplex, 6 months into owner-occupied mortgage), the suggested path is to use a DSCR loan or a HELOC for the second property's down payment/rehab, allowing the VA loan benefit to remain available for primary residences. ### Renovation Cost Control - Kelly Schroeder asks for strategies to manage spiking renovation costs: locking in materials early, building relationships with consistent contractors, and budgeting a percentage buffer are recommended tactics. ### BiggerPockets Resources - The hosts promote the BiggerPockets Cash Flow Roadshow events in Houston, Austin, and Dallas (January 13th-17th) and the REsimpli software for managing deals and tracking KPIs. ![Screenshot at 0:01: A woman in a yellow striped shirt expresses confusion or hesitation, setting the tone for questions about real estate challenges.](https://ss.rapidrecap.app/screens/k2TwMb30e98/00-00-01.png) ![Screenshot at 0:11: A man on the phone appears concerned while listening to a difficult conversation, illustrating the communication hurdles investors face.](https://ss.rapidrecap.app/screens/k2TwMb30e98/00-00-11.png) ![Screenshot at 0:38: Guest Henry Washington smiles broadly in his recording setup, indicating a positive or humorous turn in the discussion.](https://ss.rapidrecap.app/screens/k2TwMb30e98/00-00-38.png) ![Screenshot at 1:15: The on-screen text displays Samuel Shemtov's question about why agents avoid talking to him after learning he is an investor.](https://ss.rapidrecap.app/screens/k2TwMb30e98/00-01-15.png) ![Screenshot at 12:52: A screen capture of the REsimpli software shows the interface for sending an SMS message to a seller, highlighting CRM tools discussed.](https://ss.rapidrecap.app/screens/k2TwMb30e98/00-12-52.png)