How can I up my game in Real Estate Investment

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How can I up my game in Real Estate Investment

Lisa Landivar
Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes

Hello BP community!  I am really excited I found this website! 

My name is Lisa and I live in MD where I just started running an AirBnb business out of my home(really excited about it, going good so far). 

I own a home in WA (Whidbey Island) that I am currently renting out, but I am about to put on the market for sale because the market has skyrocketed in the area.  

I keep buying houses where we go because its really easy with the VA loan, plus we get to be owners and not RENTERS where ever we go, and lets be honest, the NO MONEY down is the best part!

My whole plan was to buy houses where the military puts us, and live in them until the military moves us, fix it if needed, rent it, and then sell it when the market is high to make money. 

But recently I have been thinking about uping my game in real estate investment. I want to maybe purchase a duplex, or tri-plex, of course we would have to void out the VA loan because you have to live in the property you buy for at least 2 years with VA. So, I feel after we sell our home in WA we will have some good money to invest into a property using a conventional loan maybe?

I was wondering if anyone had any ideas considering my current status, maybe a particular area I should consider for buying? Is it smart to buy a condo? I am open to any suggestions and ideas!

I want to be bolder and make more riskier choices, The buy and hold of single family homes is pretty good, but I can't find no return on my investment until I sell it seems like.

Thank you so much!

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Jeff Dulla
Lender · Western Springs, IL · Member since 2015 · 472 posts · 245 votes
9y

Lisa - Multi-unit all the way. Four unit if possible. And you can definitely use VA to finance that property. You need to check your entitlement but you should be able to continue to put 0% down.

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  • Corina Eufinger
    Rental Property Investor · Oconomowoc, WI · Member since 2016 · 996 posts · 432 votes
    9y

    First, welcome! 

    The VA loans are wonderful asset for you to have in this journey.

    SFH (single family home) is a difficult type of property to cash flow on in various parts of the country. It works in some areas, in other it doesn't. Your mortgage, taxes and insurance payment may be 900, but you can only get $825 in your area for the type of property. Blue collar towns do not have the income to support homes rented out, typically.

    I do not recommend a condo purchase for a rental.  Condo's come with their own bag of headaches because you do not have complete control over the property. To begin with as well, you would have to be sure the condo allows for renting out units. 

    You could us conventional financing for a multifamily.  But the down payment would likely have to be between 10-20% for less than 4 units.   If you buy 5 or more, you are looking at a commercial loan which usually requires 20-25% down. If you are able to network and get some deal analysis under your belt, you could go for PML (private money lender). Terms can be more flexible, down payment may be less, etc. 

    I applaud you wanting to scale up your game.  Maybe your best strategy is to pick one area of the country you like (maybe you've lived there) and focus all your investing there.  That you can enlist one property manager (or company) to look after your portfolio and you are always dealing with the same demographics.     

    1Reply
  • Jeff Dulla
    Lender · Western Springs, IL · Member since 2015 · 472 posts · 245 votes
    9y

    Lisa - Multi-unit all the way. Four unit if possible. And you can definitely use VA to finance that property. You need to check your entitlement but you should be able to continue to put 0% down.

    2Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y

    Thank you both so much for your input! I have been doing some more research here in Bigger Pockets and have learned that multi-family is really the way to go just as you both suggested. 

    I am currently attending a seminar to get started with rental property investing. I am so excited to see what I learn.

    0Reply
  • Steven Preston
    California, MD · Member since 2017 · 17 posts · 14 votes
    9y

    @Lisa Landivar Not sure if you’re considering buying a duplex or triplex in Southern Maryland or elsewhere, but if you’re looking for a small multifamily in Southern Maryland it seems there aren’t many in the area.  There are few small multifamilies around locally but single families are much more prevalent.

    1Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y

    @Steven Preston, yes i looked around, I see nothing near me unfortunately. I already own a home thanks to the VA in Lexington park(greenbrier). I am doing airbnb with the extra bedroom and bath I have so I can make more money for future duplex/triplex purchase in other areas (still researching). Its going really well so far.

    My home in WA will be on the market to sell, I hope to make a good return so I can purchase something maybe in FL. The military only keeps us here for 2 more years, and I am hoping to move down to FL next. When we move, my home will be up for rent, the market is not doing to well in Southern Maryland it seems, at least not for owners like me, I hope it picks up in 2 years and I can find someone to rent it out to.

    I have also been considering becoming a REAL ESTATE AGENT, any thoughts on the process or advice?

    Thanks so much!

    0Reply
  • Jeff Dulla
    Lender · Western Springs, IL · Member since 2015 · 472 posts · 245 votes
    9y

    There are certainly lots of people that pick up real estate part time but I wouldn't expect too much unless you are going to fully dive into it. I have seen lots of realtors come and go. The ones that don't treat it like a full time job and are passionate about learning everything they can about their market of choice. 

    1Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    9y

    Agents farm markets for years to gain traction, know valuations and build a client base.  Tough to have to start over every few years.

    I have a bro-in-law on Whiidbey Island who may be looking to buy a rental if you haven't listed it yet, Lisa.

    1Reply
  • Steven Preston
    California, MD · Member since 2017 · 17 posts · 14 votes
    9y

    @Lisa Landivar Here are the requirements for getting a real estate salesperson license in Maryland.

    http://mgaleg.maryland.gov/webmga/frmStatutesText.aspx?article=gbo§ion=17-303&ext=html&session=2016RS&tab=subject5

    Not sure if you're considering a career as an agent or just want MLS access and to save or earn some money representing yourself in transactions, but below is a how to guide from BP.

    https://www.biggerpockets.com/renewsblog/2015/12/04/how-to-become-a-real-estate-agent/

    1Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y

    @Steve Vaughan I have not listed as of yet, my real estate guy is Gerry Oliver with GOREALTY in Oak Harbor. Nor sure if my address will appear on the forms. 635 NW 3RD AVE, OAK HARBOR, WA 98277 is the address. Have him take a look and communicate with me if interested. We are going to be asking 339K for it.

    Thanks for the advice. It is very tough to build a client base moving every three years, which is why I am hesitant on going through with my real estate license.

    1Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y

    @Steven Preston Thank you very much for this info. Very good stuff. BP has so much info, its easy to overlook things sometimes. I have only been on this site for a few days so its taking me a bit to discover all the good info it has.

    I am really considering real estate licenses for MLS access and to save money by representing myself. Honestly, its hard to think about making a career out of real estate agent for me because I am constantly moving due to the military. I also have a really good paying job currently that I am happy with.

    0Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y

    @Jeff Dulla I understand what you mean. I would like to become a full time real estate agent for sure! I have always considered it, something about showing someone their future home and walking them through the steps and closing just sounds so attractive to me. Managing tenants and organization is my thing! 

    But I move around every 3 years due to the military, so what good would it really do for me to build a client base to just lose it? Also, I currently have a really good paying job right now, and the market in MD seems really slow regardless.

    I still want to get my real estate license to learn more by attending the courses and maybe working part time to gain some live experience, after all we learn best when we apply things to the real world. But also, having my license means I can represent myself in future deals and save money!

    0Reply
  • Jeff Dulla
    Lender · Western Springs, IL · Member since 2015 · 472 posts · 245 votes
    9y
    No harm in that. And certainly good to have for investments as well as just an outlet for something you are clearly passionate about. Wishing you good luck with all of it and thanks for your service.
    1Reply
  • Dan Krupa
    Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
    9y

    @Lisa Landivar , did the VA change the lending rules? The property should be your primary home for six months. After that, if you get PCSed that isn't your fault. So use the VA loan. Have you considered becoming an agent?

    1Reply
  • Michelle KrupaPro Member
    Property Manager · Kansas City, MO · Member since 2015 · 41 posts · 36 votes
    9y

    Hi @Lisa Landivar, 

    I'm a fellow military spouse. I have started getting my real estate license in 2 other states and then were suddenly PCS'd, BUT I finally just became an agent in Missouri! Third times a charm. I actually took the pre-license course in Maryland, did it online, and it was pretty straight forward but then plans changed so I never got my license there. Being PCS'd has it's disadvantages but don't let that discourage you as a milspouse. If you get your license in Maryland, in most states, they will wave the national portion of the test and you'll just have to take the state specific test since the laws are different. If Florida is where you hope to go next, I would look into the rules the Florida Real Estate Commission has in regards to out-of-state agents getting their FL licenses and just plan for it. If there are a ton of hoops to jump through, maybe wait until you get to Florida. Also, consider becoming a USAA recommended agent to help supplement your client base. I am working on it right now.

    Unless the rules changed, my husband @Dan Krupa, is right about the amount of time you have to live in a home purchased with a VA loan. Have you considered house hacking and living in the multifamily that you buy so that you could utilize your VA loan? You can use it to by up to a fourplex. You can also buy multiple properties using your VA loan. BP member, Elizabeth Colegrove, did a nice blog on the VA loan you should check out.

    Anyways, this post is getting long, but I'd love to help a fellow military spouse in REI so please PM me with any questions!

    1Reply
  • William Allen
    Investor / Wholesaler · Nashville, TN · Member since 2014 · 1k+ posts · 667 votes
    9y

    @Lisa Landivar, my first flip was in Greenbriar and I still have a rental up there in California, MD. Where in Florida are you guys looking to go next? I have moved 12 times in the last 14 years with the military and have been investing for 8 of those. It can be done, you just need to be smart about what you do. This is a relationship business so continue to network and find a niche that works for your military life. If I can give you any advice it's to find that one focus and get very good at it. Good luck and reach out if you need anything. 

    1Reply
  • Kevin Hunter
    Rental Property Investor · Carlisle, PA · Member since 2013 · 1k+ posts · 543 votes
    9y

    @Lisa, first of all congrats on the investing thus far. It looks like you are doing a fantastic job already. My suggestion is to tailor your investing to the area that you are moving to. For example, when I PCS'd to the Washington DC area, I focused on the SFH market. The multi-family market here, at least in northern Virginia, is small and saturated. However, my investments in the northeast are multi-family. The multi-family market there is more manageable and easier to get in to. In southern california, the entry price is so high. I own a townhouse there.

    My suggestion is to be flexible, while sticking to your numbers and making sure that the deal you find/purchase makes sense and works financially for you.

    Also, if you are looking in the Maryland area, I suggest reaching out to @Russell Brazil.  He is the expert in that area.

    Good luck!

    1Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y

    @Dan Krupa @Michelle Krupa Thank you so much for the advice! You guys really give me hope, I wish my husband and I can be a power couple like you guys. I will be sure to check out the blog about VA loans further. I thought I could only purchase single fam homes with VA, but I will double check and see if we can do Multi fam, I lean more towards that goal.

    The only issue my husband and I are facing now is having to live in one of the units, we are so used to big homes all to our selves, I am having a hard time convincing him to buy a 3 or 4plex and living in it for a bit haha.

    The rules have not really changed, you do have to live in the home you buy under VA, however, I thought it needs to be for at least 2 years, not just six months. Of course, if you get PCSed earlier that rule is voided. That is never a problem for us anyways since PCS orders are for 3 years +.

    I will be selling my home in OAK HARBOR WA soon and I hope to make some good extra cash to invest in a multi-fam place where ever we move next (hoping FL). Just in case I cant convince the hubby to live in one of the units.

    0Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y

    @William Allen that's really good to know, wow what a small world lol. I love my home here in Greenbriar and it sucks to think I will have to move in about 2 more years or so and have to rent it out. That's another problem my hubby and I run into, is that we end up falling in love with properties instead of thinking of them as investments.

    We want to go to Jacksonville, FL next, but of course its never for certain, we will have to wait another 1.5 years to find out exactly. Thank you so much for the advice and help!

    0Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y

    @Kevin Hunter that's genius! I suppose I have been tailoring to each specific area we have moved to ; without even knowing it. Oak Harbor is more of a single family home area, and as far as I can tell so is Lexington Park, and I bought single family homes in both (thank you VA for the no money down lol) I just need to continue on that path, and be confident I am doing the right thing. I am already a real estate investor. Thanks for reminding me :)

    If i become more interested in getting my real estate license or buying more properties in MD I will reach out to Russell. Thank you so much for the advice!

    0Reply
  • Dan Krupa
    Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
    9y

    @Lisa Landivar, we understand. We are leaving the Army after 12 years. You definitely can buy a duplex, triplex, or four plex with a VA loan. As long as it passes VA inspection. If you are going to sell your home in WA make sure you 1031 it, if you haven't lived there for two years or more.

    1Reply
  • Lisa Landivar
    OP
    Investor · Lexington Park, MD · Member since 2017 · 26 posts · 5 votes
    9y
    Originally posted by @Dan Krupa:

    @Lisa Landivar, we understand. We are leaving the Army after 12 years. You definitely can buy a duplex, triplex, or four plex with a VA loan. As long as it passes VA inspection. If you are going to sell your home in WA make sure you 1031 it, if you haven't lived there for two years or more.

     @Dan Krupa what's 1031?? We lived there for only 20 months so this might apply to us, but I don't know what it is.

    0Reply
  • Maxwell Lee
    Real Estate Investor · Miami, FL · Member since 2013 · 474 posts · 214 votes
    9y

    @Lisa Landivar Welcome to Jax, if you ever do make it down here! 1031 exchange is a way to defer taxes on profit when you sell property. As long as you take the proceeds and invest into actual real estate you can continue to defer your capital gains. I am no expert and there are guidelines and deadlines you must follow, but that's the basic idea. 

    1Reply
  • Dan Krupa
    Real Estate Broker · Phoenix, AZ · Member since 2013 · 749 posts · 399 votes
    9y

    @Lisa Landivar, PM me. It is a way to sell and pay no taxes on the sale.  

    1Reply
  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    9y

    @Lisa Landivar, The 1031 exchange is one of two ways that you can sell appreciated or significantly depreciated property and not have to pay tax on the gain or the depreciation recapture.  However 1031 is only for investment property.  For your primary residence you are given an exemption in sec. 121 which says that if you have lived in a property you own for two out of the previous five years you can take the first $500K in gain tax free if married.  $250K if single.  Sec 1031 is for investment property and when you do a 1031 exchange on investment property you are selling property and purchasing new investment property using a qualified intermediary to handle the 1031 part of the process and following a specific process.  By doing that you get to defer the payment of tax on any gain.

    You cannot take the primary exemption for investment property and you cannot 1031 your primary residence.  However, if you own a MF property and live in part then you can take advantage of both sections of the code to create some tax free and some tax deferred gain.

    It's a pretty powerful way to use deferred tax to enhance building your portfolio and move the property geographically and change type without having to  pay tax.

    The 1031 Investor5140 Reviews
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    2Reply
  • Turner Monroe
    Real Estate Investor · Arlington, VA · Member since 2016 · 84 posts · 26 votes
    9y

    Here's a BP thread about someone using a VA loan to fund a multi-family that you might find interesting [LINK]. Although I'm sure the intent is that you need to have it as your primary residence for a year or so, seems like the fact that the military might move you must be a known issue. I'm sure there are other people that have dealt with this. 

    1Reply
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