Newbie Needing Advice

I am very new in the investor market. I am looking into short selling, but I’d like to keep the property as a rental…My market area turnaround for leases and rentals is two weeks (with one year leases on tenants). It is located in a military town so there is some risk of deployment. Would the short sale program be best for what I want? Or is there a better program to use? Any advice would be greatly appreciated.

If I understand you, you are looking to buy and hold. Is this correct? If so, it needn’t be a short sale transaction. Not that there’s anything wrong with that. But purchasing the property in any number of ways will work as long as you have a cash flow on it as a rental. Being in a military community is a big plus. Even with the risk of deployment, you stated that the turnaround time is quick. So there are pros and cons to the area.
Truth is, as a landlord, you must be willing to accept the risk as a real estate guy. And that risk sometimes means you have a vacancy.

Well said AJ!! I would also like to add that as an investor you must always focus on your bottom line and your timeframe. If you can purchase property via a short sale, or regular purchase, you must have a game plan with regards to not only your net income but also the amount of time you are planning on holding the property. Please keep in mind that most states have a minimum time requirement an investor must hold the property to avoid capital gains tax (California is 5 consecutive years as an investment property, or 2 consecutive years as a primary residence). This being said, if you’re going to use the property as a rental I recommend having a 5 year game plan. If you plan on flipping the property please do yourself a favor and calculate the capital gains tax before you purchase. I’m only saying this because I have seen investors get burnt in the past.

There’s not a lot of risk in “deployment”…if a military member deploys, he normally remains assigned to that station…and his family stays. There is some risk of PCS (Permanent Change of Station) but that’s part of the military life and community. ALWAYS give your military folks a break by putting a Military Clause in your lease and living by it…there’ll be a replacement. It’s a small community on a military base and they know who treats the military folks well and who doesn’t. Word of mouth is a strong advertisment!

The upside is that you have, in my opinion, the best tenant candidates that there are! They’re used to rules and understand the consequences of not living up to their commitments – they pay on time, keep their places relatively neat, and, if they don’t you ask their chain of command for some assistance. They are receiving a tax-free allowance for housing and the bosses get really PO’d if they don’t using their housing allowance for housing!


Thank you all for the great advice. If I could follow-up with another question. What is the most profitable way of short selling considering there maybe some laws trying to steer people away from such practice?

I’ve read the books and am very eager to start my first short sale, what would be the most important advice you could give me on an successful deal with me coming out with a profit and the seller happy? I understand this question is kind of loaded, but I do look forward to any response.

I want to chime in behind Kdhast.

He is exactly right about the deployment vs. PCS deal.

When a troop deploys he still receives his BAH (basic allowance for housing) that we get paid (tax free mind you) to live off base. If he tries to get out of the rent because of a deployment, tell him No. He is still getting paid, so you should still get paid.

If a troop is PCSed (sent to another military base in some other part of the US or overseas) then you have to let him out of his lease, whether you have a military clause in the lease or not. If you have any questions about this, reference the Soldiers and Sailors Relief Act of ??(I think 1970, but it could be 60-something).

On that note, if I was renting to a troop, all I would ask for is thier commander’s name. I would verify who the commander is, and rent to them with little questions. If I have to call him commander up and complain, the troop will probably get slapped with NJP (non judicial punishment) for financial irresponsibility or worse and you can be sure that rent check is coming soon.

I am sure there are some other military or ex-military folks on the forum, but if you have any questions ask us. I don’t know much about REI yet, but I sure know alot about the military (I think?!?).

Finally a great way to vector troops to your rentals and houses is call up the base housing office and see if they can add you to thier listings for off base housing. There are also a few military websites that cater only to military renters, being one of them. Also, try getting listed in the base newspaper.

And my parting note…go easy on the troops. While I haven’t been over yet, my 19 year old sister in law just got back and my cousin is over there as we speak. Whether you like the war or not, don’t take it out on the boys. After hearing bullets fly around your head and listening to mortars and rockets drop around your tent all night long for a year, they deserve at least a pat on the back and a little respect.

Go Air Force, beat Army, sink Navy!

Ok, I will climb off my soap box now…


jsstinson: Please tell your relatives that I really appreciate their service to our country & that my prayers are with them!

i my self would never again rent to anyone in the service again unless i had all their info. from their comandor. i had a army family rent a home in florida from me. they said the govt. had a rent check allowment comeing in the mail and i fell for it and let them in with out their security deposits. stupid me. after a month they had left in the middle of the night and trashed my home. i tryed finding them for recourse and everyone i contacted said they could not help becouse of privatcy issues. i even called the pentigon and got a run around. so beware ! i had one of those live and learn experences.


Send me their name. My room mate from school commissioned into the army. I will have him hunt them down in the global and give you thier current commander’s name.

Also, if he promised an allotment, he might have filled the paperwork out and the finance folks screwed it up. The leaving in the middle of the night though kind of ruins that argument I guess.

This can be fixed. Nothing more that I hate than jack@sses like that giving military folks a bad name. 90% of people in the uniform are great folks to rent to, just those few give us all a bad rap.

Need information such as how long ago this happened? I am sure you still have a copy of the lease? etc.

I apologize for your bad run around.