Ok well I’ve been on this forum a while, but mostly as a lurker. Great site, and I want to get more involved so I figured I’d get more active on here. I’m an aspiring Real Estate investor, and trying to gain as much information as I can so that when I can jump in I can get started. I’m in the military, going through intense training for the next 6-8 months so that’s my focus then. I’m basically “drifting” right now in and out of hotels and such since I want to pocket rent money while in training. When I return I’m looking at getting a place, and I’m wondering if I should get a house. I’ve never owned a house, least in the US and it’s a little scary but at the same time I don’t want to “throw away money” by renting an apartment. I figure since I want to get into real estate getting my own home would be a great experience, and I’d be living in a house which I’d fix up little by little and eventually sell (preferably rent out). So as a first time home buyer is this a wise choice? I get a monthly
“allowance” for housing which is $1200 a month, so I can and should be able to find a decent place to live in. I heard there are tax advantages as well. So can anyone give me advice on this? I really have no clue. I’m going to talk to some people on base about getting a home. I know we also get some VA benefits like no down payment needed. So I’m looking for advice, especially those who have been in my situation. Thanks! Great site by the way. :smile
Yes you can do it.
Should you is another matter. Management from far away is problematic to say the least. Your VA loan is the way to go. I suggest that you be an expert in an area that you want to invest in. Investing in an area may not be the area that you want to live in. Mixing the two goals has got more than one investor into trouble.
My suggestion is to wait till you get back. Find a place to live with your VA loan. Then work on an investment portfolio.
redhawk
Well I’d be living close to base, and the area(s) I’d like to invest in are only a 30-40min drive from where I’d live. I live in Las Vegas, and after reading the current issue of Personal Real Estate investor I’m a bit excited. I’m thinking about getting a house the more I read on the benefits of having one. The biggest being that I’d have first hand experience of the housing process.
kaizen,
I’m also in the military and a very active investor. VA loans can help you get into a place for very little money down. As a homeowner, the mortgage interest you pay is tax deductible. You should also be able to deduct some of the fees at closing. Depending on where you’ll be stationed, it may or may not be a good time to buy. There are other options that may be better for your situation.
If you want some specific insight about investing while on active duty, feel free to PM me.
Thanks Justin, I’ll PM you with some questions. I’m stationed in Las Vegas, which I think will be great. I for see this place really picking up and many people think that as well. I was reading Millionaire by Thirty, by Douglas R. Andrew and he talks about why getting a home is a much wiser choice than renting. That’s common sense, but he talks about the tax benefits, and I’m always looking to invest with the most tax benefits so it seems like a good thing.
Kaizen,
I would avoid the Douglas R. Andrews methods. A few years ago he was out on tour touting his “missed fortune” books. His whole strategy was buy houses using low interest rate option arms, take out the equity and invest in higher return financial products like cash-value life insurance. He burned his bridges with the Gen X’ers and Baby Boomers because of his horrible advice and now he is using his children to suck in the under 30 crowd.
Having your rental properties maxed out on LTV is the quickest way to foreclosure. If you have a vacancy on a maxed out property it can wipe out your profit for an entire year in just one month. Heaven forbid you have more than one vacancy at a time.
Trust me on this I saw many an investor max out LTV and crash and burn utilizing this strategy.