Active Duty Military Investor In Need of Ideas

Property Manager · Washington, DC · Member since 2024 · 6 posts · 2 votes

2y

Hello, we have several owners who are active for former military members. The best strategy I've seen is some purchase a home for every duty station they are located at. Figure out your costs and buy homes where you are stationed that will be good rentals after you leave to go to your new posting.

When some of our military clients leave that area to move to the next they do not sell it, rather they rent their home to tenants. They are able to use the very advantageous terms and VA loan program to purchase homes that eventually become rentals properties. When they move to a new area, they hire a quality local property management firm to manage the rental for them longer term.

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Drew SygitBusiness Member

Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes

2y

@Bear Naisang $38k with 5% down equates to a $700k purchase price.

So, why aren't you buying another primary that you can then rent out when you leave?

Rent out any bedrooms you aren't using while you live there to generate even more cashflow.

You can even use an FHA 203(k) to buy a fixer-upper and finance the repairs in the purchae mortgage.

Otherwise, you CAN buy a property on a land contract with an existing mortgage. Just because there's a Due on Sale Clause, doesn't mean the seller's lender will execute it.

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Bear Naisang

OP

Member since 2024 · 3 posts · 1 vote

2y

Thanks for the responses! I’m already working the buy, live in, rent strategy but plan on selling the house I’m in now.

I'm stationed in San Diego and bought another house as a primary residence. Issue is that it doesn't look like rent is gonna catch up with my mortgage unless I'm able to refinance at a ridiculously low rate before I PCS next year. Since I'm not trying to have negative cash flow, I'll likely sell it when I leave and roll that equity into another investment property when I move to my next duty station and use a VA loan to buy another primary residence.

Also I would rent out the other rooms if I didn’t have a family! I’ve got friends doing that and it works well for them

Regarding the due on sale clause, I was wondering about that since the seller of the property I was looking at has a VA loan. I called a local real estate attorney and he advised against it. What I'm looking at now is using the HELOC for a down payment and getting a conventional loan, just need to get someone to bite on an offer that's low enough for me to at least break even month to month.

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Nicholas Coulter

Real Estate Agent · Southern California · Member since 2019 · 681 posts · 281 votes

2y

Quote from @Bear Naisang:

Thanks for the responses! I’m already working the buy, live in, rent strategy but plan on selling the house I’m in now.

I'm stationed in San Diego and bought another house as a primary residence. Issue is that it doesn't look like rent is gonna catch up with my mortgage unless I'm able to refinance at a ridiculously low rate before I PCS next year. Since I'm not trying to have negative cash flow, I'll likely sell it when I leave and roll that equity into another investment property when I move to my next duty station and use a VA loan to buy another primary residence.

Also I would rent out the other rooms if I didn’t have a family! I’ve got friends doing that and it works well for them

Regarding the due on sale clause, I was wondering about that since the seller of the property I was looking at has a VA loan. I called a local real estate attorney and he advised against it. What I'm looking at now is using the HELOC for a down payment and getting a conventional loan, just need to get someone to bite on an offer that's low enough for me to at least break even month to month.

Have you thought about STR opportunities for the property? Might bring up the cash flow enough to make it worth keeping the property.

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Bear Naisang

OP

Member since 2024 · 3 posts · 1 vote

2y

Quote from @Nicholas Coulter:

Quote from @Bear Naisang:

Thanks for the responses! I’m already working the buy, live in, rent strategy but plan on selling the house I’m in now.

I'm stationed in San Diego and bought another house as a primary residence. Issue is that it doesn't look like rent is gonna catch up with my mortgage unless I'm able to refinance at a ridiculously low rate before I PCS next year. Since I'm not trying to have negative cash flow, I'll likely sell it when I leave and roll that equity into another investment property when I move to my next duty station and use a VA loan to buy another primary residence.

Also I would rent out the other rooms if I didn’t have a family! I’ve got friends doing that and it works well for them

Regarding the due on sale clause, I was wondering about that since the seller of the property I was looking at has a VA loan. I called a local real estate attorney and he advised against it. What I'm looking at now is using the HELOC for a down payment and getting a conventional loan, just need to get someone to bite on an offer that's low enough for me to at least break even month to month.

Have you thought about STR opportunities for the property? Might bring up the cash flow enough to make it worth keeping the property.

I actually have not considered that. I’d have to take some time to do some thorough research on STR as a strategy and do a thorough market analysis. I’ll definitely look into this. Thanks!

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Nicholas Coulter

Real Estate Agent · Southern California · Member since 2019 · 681 posts · 281 votes

2y

Quote from @Bear Naisang:

Quote from @Nicholas Coulter:

Quote from @Bear Naisang:

Thanks for the responses! I’m already working the buy, live in, rent strategy but plan on selling the house I’m in now.

I'm stationed in San Diego and bought another house as a primary residence. Issue is that it doesn't look like rent is gonna catch up with my mortgage unless I'm able to refinance at a ridiculously low rate before I PCS next year. Since I'm not trying to have negative cash flow, I'll likely sell it when I leave and roll that equity into another investment property when I move to my next duty station and use a VA loan to buy another primary residence.

Also I would rent out the other rooms if I didn’t have a family! I’ve got friends doing that and it works well for them

Regarding the due on sale clause, I was wondering about that since the seller of the property I was looking at has a VA loan. I called a local real estate attorney and he advised against it. What I'm looking at now is using the HELOC for a down payment and getting a conventional loan, just need to get someone to bite on an offer that's low enough for me to at least break even month to month.

Have you thought about STR opportunities for the property? Might bring up the cash flow enough to make it worth keeping the property.

I actually have not considered that. I’d have to take some time to do some thorough research on STR as a strategy and do a thorough market analysis. I’ll definitely look into this. Thanks!

Let me know if you have any questions I can run STR comp numbers n potential return. I have air dna to look for my own deals.

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Ashish AcharyaBusiness Member

CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes

2y

I'd suggest maximizing the use of your $38,000 HELOC as a down payment on a lower-priced property, possibly in a different, more affordable market. You might also consider house hacking where you're stationed, buying a small multi-family property, or buying a property with an ADU so tenants can help cover your mortgage. Partnerships could be another avenue—teaming up with another investor could provide the financing you need.
Lastly, don’t give up on creative financing; lease options, subject-to-deals (when the house is not free and clear), or finding motivated sellers could allow you to secure another property without disturbing that fantastic interest rate. Keep exploring and stay persistent—there are opportunities out there that can help you expand your portfolio.
Remember to incorporate tax savings into your strategy. If your household income is less than $150,000, you can save on taxes without a complicated strategy.

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Ryan Cheek

Member since 2024 · 92 posts · 43 votes

2y

Quote from @Bear Naisang:

Hey everyone,

I converted my previous residence into a rental and have a VA loan locked in at 2.75% for 175,000. I'm renting it out while I'm stationed in CA and its been a success so far. I recently got preapproved for a HELOC at approximately 38,000 and the house is worth around 285,000. Cash flow is solid, tenants just signed on for a second year after I increased rent 100 a month.

I'm looking to use this as a platform for more investments but am having trouble figuring out how to finance other deals in the area. Normally I'd refinance but I can't let go of that interest rate (especially these days) or else I'd destroy my cashflow.

I've tried working the seller finance option, but without any success since none of the sellers seem to own their houses free and clear. I'm fine with combing the market for deals, just trying to find a way to legally secure financing without a due on sale clause raining on my parade. We could all be in the same boat?

Open to any advice whatsoever. Thanks in advance!

Hey, congrats on converting your previous residence into a rental! Holding onto that VA loan at 2.75% is a great call, especially with today's interest rates.

Regarding your next steps, it sounds like you’ve built a solid foundation and now need financing options that won’t disrupt your cash flow. Here are a few ideas to explore:

HELOC Strategy: You've already got that HELOC lined up, which can be a great tool for down payments on new properties. One strategy could be to use it to secure an investment property in a lower-cost, higher-cash-flow market—essentially, using your funds to maximize returns without tapping into that 2.75% loan.
Creative Financing: While seller financing can be tough in some markets (especially where sellers still have mortgages), you might want to explore subject-to deals. In this strategy, you take over the seller’s mortgage payments while leaving the loan in their name, without triggering the due-on-sale clause. It’s a more niche option, but it can work if you find the right seller.
Out-of-State Investments: I know it can be frustrating trying to find deals in pricier markets, but investing out of state might be worth considering—especially since you’re already managing a property remotely. In markets like Indianapolis, you can find new construction duplexes with solid rental returns at a much lower price point, often in the $400k range or lower, with better cash flow than many coastal markets.

I work with Neu Real Estate Group, and we specialize in new construction duplexes for investors, specifically designed to maximize rental income. We help investors like yourself secure properties with solid returns, without needing to give up great interest rates or cash flow on their current properties.

If you're open to exploring the Indy market, feel free to reach out. We could chat about some options that fit your goals.

Good luck on your journey—feel free to hit me up if you have any questions or want to brainstorm some more!

Best,
Ryan Cheek

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Travis Main

Lender · Orlando, FL · Member since 2023 · 220 posts · 183 votes

2y

Hey Bear,

Thank you for your service!

It sounds like you've done a great job with your first rental property, especially locking in that low VA loan rate. Given your situation, using your HELOC to fund your next property purchase is a smart move. With the $38,000 from the HELOC, you can cover down payments, closing costs, or even some light renovations on a new property.

One strategy you might consider is the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat).

This approach lets you leverage the equity in your current property without sacrificing your cash flow. It’s a powerful way to grow your portfolio steadily while keeping your financing costs low.

If you need any help with financing or want to explore other options, feel free to reach out. You’re definitely on the right track, and I’m here to support your investment journey.

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Active Duty Military Investor In Need of Ideas

Active Duty Military Investor In Need of Ideas

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