Help Buying "Temporary" Primary Home

[Andrew Martel]

Hi all,

I'm looking for a little help.  I'm in the Military and about to PCS (move) to the San Antonio area.  I have about 4 months until I have to head that way and would like to purchase a home there prior to my arrival. My train of thought is this... I would like to find a solid deal on a 4bd 2bth home.  Something that has some built in equity so that when I move in next 4 years I have the option to sell or rent and make some decent profit/cash flow. 

I'm very handy in the home so a house that's a little beat up doesn't scare me.  Where should I look? I initially started with foreclosure properties, but it seems like they are being listed at the same price as "normal" properties!? So then I started my search for potential short sales, and I have no clue what I'm doing here. I'm trying to find some but I don't have  a solid vector on where to look.  I've found a few, but I have zero experience with shorts and don't know how much I can offer below the listing price.

I've got a realtor who claims he's a foreclosure expert and will "find the best deal" but all he's sending me is homes listing at exactly market..

So, where do I go from here? I would like to use my VA to finance the property and have already gotten pre-qualified through a lender, so I'm good to go there. Should I seek out a wholesaler? If so how do I find these folks? Google searches don't turn up much.

Any help is GREATLY appreciated, and as always, you guys rock.  Thanks!

-Drew

[Raj Gandhi]

This isn't what you're going to want to hear... can you think of a different plan?

First, a 4BR/2BA is a nice place to live but not so great with rental cash flow. (In my area a 4BR 2BA would sell for $300k and rent for $2k/mo.) Second, location is really important for appreciation (everything in real estate).  Without being local, you're taking a real risk. 

Four years is medium-term but still too short to build significant equity in a 4BR/2BA home.  On the back end you'll lose 7% to sales commissions plus you're paying insurance and taxes.  Over the course of four years, you'll end up spending about 25% of your income per year on housing but only build a few percent equity.

If your goal is to have a nice place to live then discount the cons I've listed (and try searching craigslist).  However, if your goal is to gain wealth, I think you should try something different.  Could you find a local partner / property manager and buy a 4-plex?  You live in one unit, property manager in another (paying rent) and rent two more?  The main benefit here would be to decrease your cost of living and build something that will have much more reasonable cash flow in four years.  (In a less nice area but safe, 4-plex (all 3BR 1BA) selling for $300k would gross rent $4k/mo.)  

The benefit of having a local property manager / partner is to have someone local with skin in the game, not just looking for a one-shot commission.  Find a junior guy/gal looking for discount rent.  Can you use your military connections to spread the word you're looking?  

Btw, thanks for your service!