First and foremost, hello all. It is great to find a forum full of like minded, motivated people, I look forward to learning a ton on here.
A little about me, I am a 25 year old 1st Lt in the United States Marine Corps, currently in Corpus Christi TX for flight school. I have enjoyed investing/anything entrepreneurial since I was a kid. A few months ago the scales fell off of my eyes and I realized a logical step would be to get into real estate. I found a good REIA club…and moved the next week. Now I’m here in Corpus which doesnt have a club and I have been either swamped by flight school or lazy in my off time.
Recently I kicked myself back into gear, got preapproved for an fha and talked a little to a realtor I know but now I am kind of hitting a wall. I will probably only be in Corpus for another 3 or 4 months and my next station for a year maybe, after that, things should slow down a but but I want to start acquiring rentals now. However reading more it sounds like a good plan for newbies is to work birddogging / wholesaling to learn the ropes. Again me being an active duty Marine and in an intense school, my free time is limited. Is birddogging / wholesaling something I can pursue part time?
Also, up until a few days ago I was pretty much set on going for the nice area of town $180 -200,000 homes to ensure better renters, most likely transient military like me vs the cheaper homes near the local university which I figured would get torn up more as I will be moving and need to have a management company look after them. But I really hate the idea of having a huge mortgage like that. Has got me thinking about cheaper options?
I guess through this long convaluted post, besides what I wrote there,
What ways do you get financing besides normal/fha mortgages. I have read about seller financing etc, viable options?
With my time contstraints what is the best way to get into this game we call real estate.
What do you think about going for the nicer but more expensive neighborhoods vs cheaper but more maintenance options?
Thanks to all.
p.s. I hate making newbie posts because I know somewhere yall have already answered these questions but I appreciate your time for doing it again.
First off you are surrounded by deals, many times military personnel purchase a property using their VA loan, then are transferred and need to sell in a relatively short period.
So to learn the process of creative real estate investing, my advice would be to start off helping those that need to sell by Bird-Dogging this way you will have hands on experience when you are ready to move up to the next step. This will also give you time to gain an understanding of the various methods of investing.
Thank you for serving our great country, once a Marine always a Marine.
Being in the military can make running rentals solo very difficult since you can get called away for service or have limited time to handle issues. Do you have someone to partner up with and assist in the daily operations, otherwise you will need a solid property mgmt company which is really tough to find.
One thing I can recommend for rentals and can be cheap (well depending on what you consider cheap) is buying homes in military base communities and renting them out to the officers. Being in the military you must be aware that the gov’t pays a very generous per day allowance for rentals. Some bases pay as much as $35 a day for homes your buying at $50K. Do the math on cashflow there. The homes are advertised on a military website that only employees have access too. Payments are a must as if you do not pay in the military and tell their CO, he makes sure your paid through automatic deduction of their check so generally these officers pay and from what I have heard they usually give 12 months post dated checks so you already have them.
Now the homes need to be rented furnished, utilities included (phone and electric/gas). Cable TV be an option but generally included.
This maybe a great start for you as you can probably get into the system easy. I know its tough to get into the military rental system they have. You need to know someone from what I hear. Couple years ago I was gonna buy someones units and do this, he was locked into the system in Tampa and Ohio I think with over 80 rentals all through the military. Great cashflow and your always paid, plus you can double rent them if someone is called into service at a another base for a couple months only.
I’m doing what you want to do. It’s not easy and requires a pretty good time sacrifice. You’ve probably already met several other military guys who have rental properties. Most of them are probably just homes they’ve held on to when they transfer to another location. Most of them also think if the rent pretty much covers their mortgage - it’s a good investment. That’s not the way you want to do business. I’ve heard several people say things like “I only have to come out of pocket $300/mo, but at least the renters are paying most of the mortgage.” It doesn’t take too many houses like that to eat you alive financially.
You have unique challenges trying to do this and moving around every few years. If you really want to do this, you will have to develop a team of people at your location that you really trust to take care of your properties.
The housing office on my base has shifted over to www.ahrn.com for housing referrals. If you have a unit available, you can set up an account on there and post it for free. I’m sure several other bases are doing the same thing.
Thanks for the responses Gents, I appreciate all your input.
yrush2000 I like your thinking, but what exactly do you mean military base communities? Do you mean housing on base or housing off base but that is used by military? I know my base and I believe most bases, all their on base housing is owned and run by, just like 90% of everything else in the military now, surprise, a contractor. I havent looked into other housing off base that is mainly military members.
I made this post because I am looking for advice on beginning my REI career. I was planning on going right in and purchasing a nice 3/2 or 3/3 home between 150-200 but then reading, lot of people recommended starting basic i.e. birddogging or wholesaling. Any thoughts as I wont be able to give this a ton of my time depending on my schedule.
If you have the cash resources and if the property will generate a positive cash flow, then buy the property. Property values in many areas of the country are at 2000 prices. Now is a good time to buy for a long term hold.
About one-third of my rental portfolio is in a community that hosts a military base. On base housing is often not plentiful enough for the military community, so many married service members look for affordable off base housing. This works in your favor because the pool of potential renters is constantly refreshed every couple of years.
Rather than buying the $150K properties, look for the less costly $50K - $75K properties that will produce a positive cash flow at the prevailing rent for the community. Forget targeting officers for your rentals. Officer pay plus the housing allowance is large enough for most officers to just purchase the property they choose to live in. Your rental pool will include junior enlisted service members and the civilian employees who work at the base and who don’t have enough money to afford to buy.
One thing to consider with what yrush is saying is you have guys coming to CC for E2/C2 multi-engine training for about 4 months or so. This is an intermediate stop on their PCS orders. This means these people are on per diem for the time they’re there. Might be an opportunity for you to provide a reasonable place with some furnishings that would solve their problem. I have a guy getting ready to come down there who will have his wife and two kids with him, but not all his stuff. He NEEDS a decent quality furnished place. He’d probably be willing to pay a little extra to have a place that’s pretty well set up for him so he doesn’t have to buy things only to sell them later. These guys aren’t getting paid to move their stuff to CC. Their stuff will only get moved to their FRS squadron.
Rentals are all about buying the numbers of the deal. Those people like your friend hold on to places they’ve lived in thinking they’re renting a 150k house to someone else that’s going to make them money. There’s a ceiling to rent when you get to those nicer houses. At some point, the price of the house will be so high that it won’t be financially smart to rent it out. The cash flow is generally going to be better on the cheaper properties. Now, get down to really cheap properties and you’ll have other dynamics to worry about.
Keep in mind CC has a fair amount of crime. There you would have to find a balance between a cheaper acquisition price and finding somewhere that decent people would want to live. You also have a relatively high property tax to deal with there as well.
It’s time to buy properties if you have cash in hand and because the fallen property values are rising again after the recession overcome. Good if you can hold it for a longer time. Also you can observe statistical data which range of property value yields highest return. Thanks.
It’s time to buy properties if you have cash in hand and because the fallen property values are rising again after the recession overcome. Good if you can hold it for a longer time. Also you can observe statistical data which range of property value yields highest return.