Hi how are you all doing. I have a lil question if someone could be so gracious to answer it. Im 22 and currently deployed to Afghanistan, Im hoping to start getting my feet wet when I get back. I was wondering if it would be possible for me to venture into the world of real estate successfullly with me being active duty, and if so what would be the best investing strategy for me to go with?
E, no reason at all why you can’t start investing while on active duty. Most every investor I know has started their real estate investing while working at another job full time. So, yeah, if you want this to work for you, it can.
As for the best way to start, everyone will have their opinion. Mine is to look at options and lease options as the best way to get started.
Stay safe!
E,
Welcome to the board! I’m active duty military too. My wife and I have built up a nice little rental business over the past few years while I’m on active duty. You can search for some of my old posts about it. I just didn’t go the bird dog / wholesaling route…not for me.
Knowing your goals and preferences would be helpful in determining which way to go in REI.
The easiest way to start is to buy your own home. Use your VA loan entitlement to buy the house you will live in with no money down. When you PCS, turn that house into a rental.
The trick is to purchase something that will generate a positive cash flow as a rental. A bank owned property that you can purchase at a discount might work.
Military communities are great rental markets. Use FHA financing to buy a new home at your next duty station. When you PCS, turn that one into a rental.
The goal here is to acquire a portfolio of cash flowing properties that one day will be owned free and clear. Think of rental property ownership as a slow road to wealth that generates a nice income that supplements your retirement pension.
Thanks for the input everyone. I have another question, @justin0419
, how would you suggest that make my goals, do you mean goal for what I would like to make financially, what should I aim for? Thanks.
Goal setting is not an easy exercise. It takes some effort. Goals are specific objectives that we need to attain in order to realize a dream.
Since this is a real estate forum, what we generally mean here is; What is it that real estate investing needs to do to let you realize your dream?
If your dream is to retire early and never have to work to maintain your retirement lifestyle, how long before you will retire?. How much income will you need in retirement to support your lifestyle? How much of that income will your pension provide? How much income will you need from your real estate investments to make up the difference?
If you can answer these questions, then state your goal as a specific objective that you will achieve in a finite timeframe.
For example, let’s say you plan to stay in the service for another 20 years. Your dream is to retire at age 42 and live off your pension and your rental cash flow. You might state your real estate goal as,
By the time I retire from the service in 2031, build a rental portfolio of X properties that generates $Y per month cash flow.
You are not done, yet. You have to fill in the blanks. How many properties is “X”? How much net rental income (monthly cash flow) is “$Y”?
If you think you will need $30000 per year to supplement your military retirement pension, then you will need your rental properties to produce at least $2400 per month cash flow. If you reasonably expect each mortgaged property to give you $150 per month cash flow on the average, then you will need a portfolio of 16 properties. If you want a portfolio of free and clear properties, and you expect to average $450 per month, per property, then you will need just 6 free and clear rental properties by the time you retire.
Now that you have a goal, develop an investment plan to achieve your goal. How much can you afford to pay for each property, given the current market rents, so that you can get the cash flow you need? What investment capital do you have today? How much will you have to put down on each property to get mortgage financing? How long will it take you to save that much money? Can you do it on a timeline that will let you acquire 16 positive cash flowing properties over the next 20 years? Or, if you use 15 year mortgage financing, will your plan allow you to have at least 6 free and clear properties in your rental portfolio by the time you retire?
Does this help?
@Dave T, o man that was an awesome answer, it really gives a clearer picture of how to realize what Im aiming for. I really appreciate all of your guys input. And Ill be hitting the forum up more when I get a chance all thru deployment. With the Lord willing I hope to do some big things when I get back
Thanks
I’m not experienced in REI either and am on this site to learn also. But I do want to say thank you to you guys (and gals) that are out there serving our country so we can be free to invest and build our own future.
Semper Fi
We live in the land of the free, because of the brave.
E, I hope you saved up all your money and kept your credit straight - the next step is education. I joined the military at a low point in my life, read Rich Dad/Poor Dad, and when I got out of training I bought my first property the following year. I’ve been investing ever since. I was rehabbing a property when was I called to active duty (to Iraq) and I had my girlfriend at the time work with the contractors to complete the job while I was away. Goes to show it can be done from anywhere, lol.
With your VA loan you can purchase up to a 4 family, but did you know you can combine that with another veteran and get an 8 unit? Of course, you have to reside there, but hey… Insiders tip.
Dave T gave you exceptional advice.