Investing while in Marines?

Question

Hows everyone doing? Hope you guys are killing it.

Anyway, Im a 19 yr old currently deployed in the Marine Corps. Ive spent everyday this year trying to develop my mindset and financial IQ. I save up almost everything I make, and want to get started with real estate investing hopefully by the end of this year. Getting the ball rolling is the hardest part.

I find trouble in knowing where to get started, because of where im located. Ofcourse its best to be able to personally see and manage the property from within driving distance, but being stationed In California when I get back, I know its an expensive and hard market to start out with, especially with only the 20k im aiming to have by the end of this year.

Correct me if im wrong, but the VA loan has to be used on a house youre going to “live in”. So unless theres a loophole, using the VA loan I would have to buy somewhere close in California to where im at.

Even if I were to have family manage a property in another market, one lives in New York and the other in Florida. Also markets I dont think Id be able to afford right now.

Basically, what are my options?

Would it be smart to use VA loan on a house im california, thats probably over my price range?

Should I partner with someone on a property here?

What if one of my parents moved to a cheaper market and could “house hack” there while managing it?

What could I do in the meantime until the end of the year when im back in the US and able buy?

or should I wait for... the bubble to pop?

I have time to decide, but want to start preparing, the sooner the better.

Donald E Appleberry · Answer

Hey man!

You're on the right track. CA (San Diego in particular) can be tricky but its definitely doable. @Brian Koons, @Lawrence Feder, @Zach Ripka have all done it with multifamily properties and all got insane deals. Each has its own strategy, but all worked very well. I host military REI meet ups for situation exactly like this, since you're not around, feel free to PM and we can talk strategy or I can put you on a zoom call for the Meet up.

@David Pere has the "From Military to Millionaire" community on Facebook I'd suggest joining as thats a great source of knowledge as well. @Jon Lallande is a go to source for the VA loan and has been crushing it. He also has a rental in oceanside.

I was a Recon guy for 5 years out here before going into real estate full time. I actually served with @Morgan McConnell who commented above. As I mentioned San Diego can be tricky, but depending on your goals and the strategy you want to use you can find something that fits. It's a pretty competitive market right now, so be prepared for that, but IMO San Diego RE is one of the best investment markets in the nation. Literally the whole reason I stayed out here when I got out. Hahha.

Matthew Irish-Jones · Answer

@Anthony Aguilar Thank you for your service.  As far as I know you have to live in the property to use a VA loan.

That does not mean you cannot use your Capital to invest in an income property and save the VA loan for your personal residence when you are ready to buy.

There are definitely markets you can get into with 20K cash.  If you are going to buy a property outside of where you live you will need to find an agent and a property manager.  This is not as difficult as it sounds they exist in every city.

You mentioned NY being expensive.  NY is a massive state with many different cities.  You cannot afford to buy in NYC, but you can afford to buy in Buffalo, Rochester, Syracuse, Utica, etc...

Analyzing different markets for cash on cash return would be a good place to start.  If you do decide to invest outside of where you live, there is a lot of information on this site on how to accomplish it.

In a nutshell you need to figure property management costs into your investing analysis.

Good luck!

Morgan McConnell · Answer

@Anthony Aguilar I’ve been in the Marine Corps for 12 years now and I’ve used the VA loan 3 times now. It does have to be your primary residence when you buy it but that doesn’t prevent you from keeping it once you PCS to a new location. I bought my first place in FL and then got orders to CA 8 months later. My wife and I kept it as a rental for 3 years while also using the VA loan to buy another house in CA. We sold both of them a few years ago and made about $35k on each due to appreciation. I wish we would have kept them but the capital we made helped us pay off some bad debt. San Diego is a tough market but I would highly recommend buying something cheap so you can do a live in flip and either keep it as a rental when you PCS/ get out or sell it and use the profits to fund your next investment. Send me a message if you have any other questions!

Brian Koons · Answer

Based off past and current data of the housing market, along with the demand vs. supply ratio In San Diego the likelihood of a bubble pop is very unlikely. I would focus on continuing to save as much as possible, ensure your are doing all things related to improving your credit score, and gathering a knowledge base for housing/rent prices in the area you would like to invest. That, along with continual learning, will set you up for the highest chance of success once you're ready to pull the trigger

Anthony Aguilar · Answer

@Anthony Aguilar No idea why the spacing between the paragraphs are so tall. Sorry for the weird looking post.

Investing while in Marines?

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