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Updated over 5 years ago, 07/31/2019
Buying Real Estate as an Active Duty Service Member
So I've been in the service for about 2 years now and I've been thinking about buying some property to rent out in the area and also rent out to fellow service members that are trying to get out of Government living quarters. I just want to know how can get started with my first property? I want to bite the bullet, but I'm not sure how to go about it because I've never bought a home before. Do Active Duty/Veterans get any perks in terms of taking out mortgages? Should I even worry about mortgages?
@David Pere hosts a great podcast, From Military to Millionaire. Another great show for you to check out is Active Duty Passive Income.
I don't have that background myself so I can't provide guidance, just point you in the direction of resources. However, I can tell you that it is 100% doable if you put in the work!
@Taylor L. Thanks for the shoutout brother!
@Miguel Luna happy to help in anyway!
@David Pere how are you doin brother
When I was in I used my VA loan to buy a 75k house in Abilene TX. Lived in it for about 2 years until I PCS'd and hired a property management company and it has been a rental for almost 2 years now. The VA loan is a mortgage specific for military/veterans. Its a 0% down payment loan but you do pay a $1,500 funding fee to use the loan which can be added to your mortgage amount. Depending on where you buy you have a limit of up to something close to 450k but you probably won't qualify for anywhere near that. It is a primary home loan so in order to use it you have to state you will be living in the house you buy for at least one year.
If I were you I would try to buy a duplex, triplex, fourplex. You can live in one unit and rent the other units out. I did have a couple roommates through the years I lived in my single family and charged them half their BAH and it covered almost the whole mortgage payment so it wasn't bad.
@Miguel Luna I think it's a great plan. @Gerhard Listander has a great suggestion and I believe this is the best way to start. It's called house-hacking and using your VA loan is a tremendous benefit for those of us in the military. I'd recommend trying to find a local Realtor who is also an investor and can help you find a property that would be good to keep as a rental after you move out of it and PCS. Try starting in the local El Paso, TX discussion forums here on BP. The Realtor will probably have a recommended lender, but make sure the lender has done VA loans. Good luck and let me know if I can help in any way.
@Miguel Luna Great that you are thinking of investing in Real Estate, it's the best way to generate long term wealth, if you do it right you can become financial free in years and not decades!
@Gerhard Listander said it perfectly, you can use a VA loan with a 0% down payment to get a multiunit property (duplex, triplex and 4-plex) live in one unit and lease the other units - you can even lease out the spare rooms in the unit you live in -if you don't mind having housemates of course. If you do it right you can have your renters pay for your housing expenses and benefit from the appreciation and equity buildup.
Hit me up, if you need further assistance - I am local real estate investor and realtor in El Paso, Texas.
Yas
yasireinaudi.com
@Miguel Luna same here man, active duty here in Houston. Already got my first property started. Looking to house hack a multi family next. You really can't beat it with the VA loan. Reach out if you need anything, here to help.
@Abraham Trevino yeah it all sounds good, I just dont know the process of going through with it haha
@Miguel Luna I have a few properties and would be happy to meet on post somewhere or take a quick phone call to help you out with understanding the process. Message me if interested.
@Frank Geiger meeting in person would be awesome!
@Miguel Luna I'm on active duty and just went under contract on my first property (a duplex).
To kick things off I applied for a mortgage through Navy Federal AND Veterans United. Navy Federal has lower interest rates (usually) but they will only allow you to buy a single family or duplex where Veterans United will let you buy 1,2,3, or 4 units. I highly recommend buying a multifamily to start off with. House hacking rooms is a great idea while you are stationed in the area, but when you leave that becomes more difficult. Having multiple units allows you to provide separate spaces for people and have a signed lease to fall back on. An important thing to note about the VA loan is that you are required to occupy the property within a reasonable time after purchasing.
Next I found a real-estate agent. I went through Dave Ramsey's site here and chose the agent that has VA loan experience. One plus of @David Pere's site is that he will help you find an agent that is VA friendly which is extremely important. Have your agent give you automatic updates from the MLS in your price range. This allows you to see properties as soon as they hit the market so that you can be the first to analyze, schedule a viewing, and make an offer. I highly recommend including a personal letter with your offer telling a little about yourself and family, this personal touch goes a long way.
Once you make an offer on a house and have it accepted, you go under contract. This is when the due diligence process starts. Now is the time for the home inspection, reviewing standing leases, title inspections, utility verification, and many other things. It's also the time to get your mortgage finalized and your legal documents (leases you will be using and such) reviewed by a lawyer. This is where I currently am so I will leave it at that.
Overall, the most important thing you can do right now is learn. Read/listen to all the books you can, attend the free weekly webinars on this site, search the forums, and start analyzing properties in your area. Feel free to message me if you have any questions! Good luck!
Hey Miguel,
I'm a local mortgage lender in El Paso and can help answer your VA loan questions, if needed. Shoot me a message and we can meet up.
@Brook thank you for the shoutout, and kind words!