Jon Lallande is a mortgage loan officer and real estate investor. As a prior Force Reconnaissance Marine and Scout Sniper, Jon loves helping military veterans build wealth through real estate. Jon specializes in teaching veterans about their VA loan benefits and takes pride in his ability to make financing real estate as quick and seamless as possible.
The VA (Veteran’s Affairs) home loan is a powerful wealth-building tool available to qualifying service members and veterans. I believe this is an under-utilized loan product that can help military folks get started in real estate and achieve financial independence.
My wife and I recently purchased a home using our VA loan, and we couldn’t have done it without Jon Lallande. I recently had a great conversation with him about the VA loan, mortgage lending, and investing in real estate while working full-time.
Doug: How did you transition from the Marine Corps to mortgage lending?
Jon: I started out wholesaling while I was still in the Marine Corps. I realized from that experience that I really enjoy working with numbers, so I researched different real estate and finance professions that focus on the numbers and finance aspects of the business. I came across mortgage lending as a profession and attended a home buying seminar with a loan officer that helped me with a lending product for a property I purchased. He showed me what his day-to-day was like and how much he made, and I realized that mortgage lending was a great fit for me and my interests.
Doug: Mortgage lending is your primary occupation, but tell me more about how else you’re involved in real estate.
Jon: I primarily do flipping and wholesaling on the side. I try to do 3 wholesale deals and 1 flip per month. For a while, I would say yes to any opportunity that came my way, but I’ve gotten better at saying no to opportunities that don’t fit into my strategy. I own a total of 85 doors, and 80 of those doors are with a partnership of which I own one-third. I’ve been offloading the few properties I own in my personal name, in favor of partnering with others on larger deals.
This strategy fits better for my lifestyle as well, because the mortgage lending takes up a lot of my time during the week – sometimes up to 60 hours per week – so rather than doing other deals on my own and having to do everything myself, I can partner with others and contribute to tasks that focus on my strengths while they do the same. I’ve found that having partners where everyone brings something else to the table is where I’ve found the magic happens. Also, owning assets in a separate entity with others reduces my liability, as opposed to owning multiple properties in my personal name.
Doug: On the mortgage lending side, how much of your business is VA loans with military buyers, and how much is conventional lending with investors or non-military buyers?
Jon: Roughly 75% of my loans are with VA military buyers because I’m able to get those offers accepted at a higher rate than a lot of other VA lenders. I also tend to click with military buyers better than other buyers. 10% of my loans are investors that want to do refinances, and roughly 5% of the loans are your standard first-time homebuyers using conventional loans.
Doug: Why do you think the VA loan is such a great lending product? Why is it a better way to purchase a property than a conventional mortgage?
Jon: This is my favorite question to answer and I could talk about this all day. I think the biggest pro is you can put zero down and you’re able to qualify for a higher purchase price. With the VA loan, you don’t have a debt-to-income ratio requirement like FHA or conventional loans. This means VA buyers can qualify for a higher purchase price than they would be able to without a VA loan.
Another advantage is with the VA loan, as long as you have at least a 640 credit score, you’re going to be able to get a very low interest rate. So a younger enlisted service member can still get a fantastic interest rate, even if they have struggled in the past with credit card debt, student loan payments, or other consumer debt issues that may have negatively impacted their credit score. With a conventional mortgage, if you’re below a 740 your interest rate increases a little bit for every 20 points below 740. Not the case with a VA loan as long as you have a 640 credit score.
The VA will give you the same low interest rate whether you’re buying a regular single-family home, a condo, a townhome, or a 2-4 unit small multifamily property. This is not the case with a conventional mortgage. You will have rate adjustments (higher interest rates) if you buy a condo or multifamily property. Also, for multifamily property purchases, FHA mortgages have something called a “self-sufficiency test” which means the mortgage payment has to be less than 75% (or whatever vacancy rate the lender deems fit) of the combined rents. This is very difficult to make happen in a high-cost market like San Diego or Washington, D.C. On the other hand, with the VA loan, we can use the projected rental income to help you qualify for the property.
Another big plus of VA loans is that lots of the VA lending guidelines are much more subjective than other residential lending products. Conventional mortgage guidelines are much more black and white with their rules.
Doug: Are there any myths about the VA loan you want to dispel?
Jon: The most common myth is you can only use your VA loan once or you can continue refinancing your VA loans to conventional loans and buy an infinite amount of properties with their VA loans. Most lenders don’t tell their clients about the “one-time restoration”. What that means is that you can purchase a home on the VA loan, refinance that mortgage into a conventional mortgage, which frees up your VA entitlement to purchase another property, however doing so uses your one-time restoration. Once you use your one-time restoration, the only way to restore your VA entitlement is to sell any properties you have that were once financed by VA.
One thing to remember when using your VA entitlement a second time is that your funding fee does increase from 2.3% to 3.6%. You can reduce that funding fee if you contribute to a down payment.
Some people mistakenly think that you can buy as many properties as they want as long as they remain under their VA entitlement, for example, if their entitlement is $500,000 they believe they could buy 10 properties that cost $50,000. If you try to buy multiple properties like that, the underwriters will say that it’s fraud because you are using your VA loan entitlement to build a real estate portfolio, moving constantly, not upgrading in size, and generally not using the loan in the way that it was intended.
Doug: Correct me if I’m wrong, but a big advantage dual-military couples have is that each individual has their own separate VA entitlement, so if you purchase a property using one servicemember’s entitlement, that does not impact the spouse’s ability to use theirs on another home in the future.
Jon: That is correct, and if you two purchase a home using your wife’s entitlement and there is still some of that entitlement left over, you can use that amount towards a home purchase on your VA entitlement. That’s another advantage you have being a dual-military couple.
Doug: What software, tools, or products do you use in your real estate business that has provided significant value?
The Bigger Pockets Intention Journal has been great for me. I write down big goals I want to hit over a 90 day period, and I track my progress and hold myself accountable using the daily and weekly pages.
I’m also a huge fan of the software Propstream. I use it all the time to look at comps of properties, pull data for marketing lists, and skip trace all in one software, it has everything you need to do real estate investing, with the exception of an actual CRM.
Doug: What do you want your legacy to be?
I want to help men build their own real estate and business empires while helping them find fulfillment in their lives. Lots of guys out there want to do awesome adventurous things like sky-diving, shooting guns, and going on adventures, but too much of their lives are spent behind a desk.
I want to show other people how to live the life they want to live – not the life they’re being told to live.
Doug: How can people contact you and learn more about you?
Jon: You can email me at Jon.Lallande@myccmortgage.com and you can follow me on Instagram @jonlallande22.
I hope you enjoyed this interview with Jon Lallande. Please send me a message on Instagram @honorandequity and give me feedback. We’re always seeking to improve our content to provide maximum value to our readers and followers!