Where shoud I start?

Question

Where should I start? I have so many questions.

Any recommendations on certain books I should read? and podcast I should listen to?

For a beginner investor in RE with limited finances (I am Active Duty Military), What would be your first investment property  and how would you go about doing it?

Any and all advice is much appreciated. Thanks for taking your time to read my post, this website is very helpful.

Mike Foster · Answer

@Jacob Ferguson What do you mean, 'Where do I start?' You just did!! Congrats!!You will find more than your share of knowledge and resources here in Bigger Pockets. The advice you have received already is spot on. Definitely start with your VA loan. Zero money down, and the ability to buy New Construction, Multi-family, single family.. They will even give you $35,000 for a renovation now! Read books from other successful investors, listen to podcasts, and join your local Real Estate Investing Association. But the BEST piece of advice anyone can give you... Don't let anyone tell you you CAN'T do something. No matter what it is. House Hacking may not be for everyone, but it is definitely for those who are hungry for a great start. And there are SO many ways to House Hack! If done properly, you can raise 10-20% of you mortgage in your first year. Then re-finance at the end, put your home into a conventional loan, rent it out, then take 100% of your VA loan and do it again!! The sky is literally the limit, and we have SO many benefits as military members. So make sure you take advantage of all of them!!Feel free to reach out if you have any questions, and best of luck!!!

Ron Flatt · Answer

First off, Thank you for your service, My daughter is in the military also, she makes me proud.

Always read, maybe look into some local Real Estate Groups for your area, or an area that you are interested in investing in.

The easiest way for you to start is using your VA and find a duplex up to a fourplex and jump in.  You will live in it, using your BAH to pay for it, the renters will be also paying for it.  You can either pile the cash for your next property or pay on the note.  I would recommend the former.  (make sure you budget for property management.)

When you are shipped to next duty station look again.

The multifamily was not what my daughter wanted, so when we knew she was going to San Antonio, we found a foreclosure.  We bought a less than 10 year old home with 5 bedrooms for $100K.  It did not qualify for VA, so I bought the property, we did the repairs and she used her VA to purchase the property from me.  She since has been shipped to Germany, but her housing allowance has made the payments, she did make some improvements and sold the home.  She netted a profit of over $50K, even with all the over improving she did.  That is not a bad profit for an enlisted air force to make in one lick.  Since it was her home, that money was not taxed.  Now while she is overseas, she has partnered with me on a rental in my area, so she is getting better returns than putting it in a bank for very little return.  When she gets her orders, I will liquidate the two properties we own together and payoff the mortgages and she will hopefully have a bigger nest egg to purchase something state side at her new duty station, 3-4 years down the road.

Remember to fall in love with the deal, not the property.  It is just property, a tool to make you cash flow, ( all our service folks and even the rest of us need CASH FLOW).  Invest on, Good luck and again THANK YOU FOR YOUR SERVICE.

Andrew Syrios · Answer

Start with The Millionaire Real Estate Investor and The Ultimate Beginner's Guide to Real Estate Investing, which you can find here: https://www.biggerpockets.com/guides

Daniel Winsor · Answer

@Jacob Ferguson

Just getting started on that journey myself. Couple things I’ve learned to consider.

Depending where you are stationed, it may be a good idea to own next to your base. I bought in Lemoore, so that base isn’t going anywhere. That said, I didn’t run numbers before and now I have a home which only provides $270 a month, not factoring in maintenance, capex, PM, or other expenses. Might not bite me, but it might too. The problem, I did a no money down VA loan, so I have no real equity in the home, and the amount of origination fees, funding fees, and seller costs would mean I lose on the deal unless appreciation saves me or I figure something else out. Lesson learned.

Consider possible base closures. Some never will, but others might. I’m much more willing to buy where there is more to the area than the base, because if it’s shuttered in the next downturn, your property will maintain its value.

Consider who your tenants will be. Consider BAH rates and lean towards the rentable 3/2 if possible.

You can learn a lot prowling the forums, read everything, analyze deals (I have run about 50 now and I feel I’ve learned the most from this), listen to podcasts for motivation, attend webinars, and ask questions. Good luck!

Kurt Pauley · Answer

@Jacob Ferguson

I saw first step is to go to the bank and see the total dollar amount you can get with your VA loan and look for a property to househack. Remember it doesn't have to be a multi-family if you wanted to rent out bedrooms to friends. I do think multifamily is your best option though. Go for 4 units!!

Jacob Ferguson · Answer

@Mike Foster,

Thank you for the advice!  I am more than excited to get into the door of REI hopefully to one day be Financially Free.

Allan Bishop Jr. · Answer

@Jacob Ferguson - Correction - In my earlier post it seems that my phone autocorrected a word for me. I meant to say that I CAN concur with @Ron Flatt. House hacking is a great way to get started on your first property (especially if it’s a multi-family property).

Daniel Winsor · Answer

@Jacob Ferguson

Moving from San Diego to one of those locations is going to be wild. I'm in the opposite boat; BAH just more than doubled. Keep that in mind for your future prospects as I can imagine that will be a HUGE change! Luckily, I am hoping to close a deal that will lower my own living expenses so I will be "cashflowing" big time.

Definitely soak up as much as you can. You have a similar gameplan to me. With all of my capital to be taken up by the deal I am working now, I will have about 6-12 months to sit and learn. I'm going to look into a market or two I'd like to invest in remotely, learn everything I can about them, and be ready to go when the time comes.

I'm no expert, but I've worked VA in the past and have learned a lot about multiple VA loans and some of the other intricacies of them. Feel free to get in touch if you have any questions and I'll try to answer.

Jacob Ferguson · Answer

@Daniel Winsor  Hey thanks for that advice. I transfer in a year and that's when im going to jump into REI.  I am trying to soak up as much knowledge as I can and have a set plan so when I do transfer all I have to do is put it into action.

Ron Flatt · Answer

House hacking is not for everyone, I agree @Allen Bishop Jr.,  my wife and I have never house hacked, and my daughter did not.  Many people can house hack and are successful.  I recommended house hacking so he could use his VA loan.  Otherwise he can purchase something on his own with traditional financing or just do as my daughter did and find a property for himself, then either turn it into rental when he moves to next duty station or flip it.

Many folks under estimate the cost of the rehab and think that it is worth more than it is after the work is complete.  Be Careful on a fix and flips, you can get in trouble, even if you have some construction experience.

Where shoud I start?

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