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Updated about 5 years ago, 10/16/2019
Suggestions on Next steps for REI
I currently live in Alexandria, VA in a 2 bd 2 bt condo. I'm looking to kick start REI but unsure on the direction I should go. I currently have ~$13k in condo equity. I am a military veteran so I know I have the VA loan to my benefit. With that comes the caveat of living in the next residency I purchase for at least a year. Originally I thought about upgrading to a townhome but financially I can't afford it with the steep HOA fees associated with many. I've considered the BRRRR approach but am hesitant since I do not have much money to play with when it comes to renovations. Any suggestions or recommendations on the direction I should take would be greatly appreciated!
Thank you!
Justin
A lot of it is going to depend on your situation and goals. Are you married with kids? Single, no kids? What are your goals? BRRRR style buy and hold? Passive investments? Or the best option, IMO, the Military House Hack. Glad to discuss with you (fellow Veteran investor).
@Eric Upchurch I'm a Veteran as well and would like to know more about the Military House Hack. Is that any different then House Hacking?
@Justin Pisarcik I'm in Alexandria as well and a Prior Veteran. I Plan on Buying a Townhouse with no down VA loan and house hacking it. Potentially I will do the BRRRR approach aswell. I personally have plenty of liquidity available, because I have been investing nearly 80% of my income for the last 15 years. I've always lived well bellow my means.
I think house hacking a townhouse and saving the money saved by house hacking and using it to renovate may be a good strategy for you. It may require you to stay there longer, but you got to start somewhere
We wrote a (free) book called Military House Hacking. It talks about using your VA benefits, buying a 1-4 unit (no money down, no PMI), living in one unit for a year and a day (at least), refinancing to conventional loan and doing it again at your next duty station. There are some more details obviously, but that's the short version of the Military House Hack. Pretty cool way to accumulate properties (essentially for FREE) while you serve. Can be done out of the service too, but sometimes life/family/obligations can get in the way. Either way, I'm a huge fan of the VA loan strategy and I've even written for BP on the topic as a blog contributor!
@Adam Bankoff Thanks for the feedback! I'm feeling like the townhouse route might be the best option for me personally since I can't swing anything in the area over $300k. That's even difficult finding with HOA fees that are associated with many of the communities around here.
@Justin Pisarcik @Adam Bankoff Definitely take advantage of your VA loan benefit; you can essentially get into a property for zero money. Most of the time your personal property wouldn't be considered an asset, but if you decide to house hack and have someone else pay your mortgage for you via renting out rooms, this is a fantastic way to start. Once you start building up some capital through increasing your savings rate, you can then go invest in other rental properties; I'd recommend looking outside of Virginia in markets that have better cash flow.
@Stuart Grazier Thank you for the recommendation! The only caveat I am experiencing is that I have to live in the next property I purchase for at least a year. That would make it difficult if I try to keep my full time job.
@Stuart Grazier I have plenty of savings, but I figured house hacking is a good way to reduce my cost of living, and to acquire a property that I could rent out while learning the process. I'm also a disabled veteran, so from what I understand Is that I can put 0% down and have no funding or closing costs. I figure i can live at the location for a year and then rent it out completely, and do it again. My biggest concern is if there is a big enough variance in the monthly costs vs rental income in this area. I would think I need to find a fixer upper that is selling well bellow value to provide a big enough buffer to justify the purchase.
my husband and i have a home in San Antonio we’re leasing out while stationed here in japan. How do we get started with investing although we aren’t local?