First investment dilemma, suggestions please.

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First investment dilemma, suggestions please.

Krista Patrick
Northwest Arkansas · Member since 2015 · 17 posts · 7 votes

I'll try to be as detailed with this questions as possible while still keeping it under 30 pages. ;) 

My husband and I finally had our plan to purchase our first investment property this summer in Northwest Arkansas. (Relocating from Montana.) We were going to house hack a multi-family using a VA loan. However, I just started calling around and it sounds like my husband needs to have 12 months left on his military contract OR have documentation from a new employer in the same field as his prior MOS (job in the military) if it is less than 12 months. Unfortunately we were planning on doing all of this in July but his current contract is up in mid-April 2017 and we haven't made any decisions whether he will re-enlist, extend, or separate.

So, my question is this: What would you do? 

We could drastically move up our timeline but we would have to close on something prior to April 19, 2016. Which means I would need to fly out to Arkansas, asap to find something. Also, I'll be moving there with my kids, withOUT my husband for awhile. We weren't prepared to leave him that early. So, this option would require us to pay two mortgages for a period of time (which, obviously, we prefer not to do). 

We could wait it out until late summer/fall when he applies for jobs to see if he gets something in his current field or extends in the military to POSSIBLY get a mortgage but I don't really want to put my eggs all in this basket. 

If we DON'T pull the trigger now, and he DOES get out of the service, we are looking at a possibility of our 6 month plan turning into a multi-year plan by the time he has 2 years at a new job to qualify for a mortgage.

Obviously we can't tell the future. Maybe we somehow find enough money to buy a house in cash and the point is mute. But for now, we need a loan and a place to live and a time frame to do it. And I would MUCH rather buy than rent.

Suggestions? To jump on it and buy now, even though it means possibly paying two mortgages and moving a few months early? Or wait and chance not being eligible for a loan anymore? 

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Daniel Lehman
Lender · Carlsbad, CA · Member since 2016 · 90 posts · 56 votes
10y

OK, I can answer this for you...  In REALITY all your husband has to do is INTEND to reenlist, as long as he is able to if he wanted to.  Hypothetically, IF your husband DID intend to reenlist, to solve this issue you would just have to write a letter to the lender that said "I intend to reenlist" and you would also have to get a letter from his command that said he was eligible to reenlist.  In that case you wouldn't need a full year on the contract. 

Later, if intentions were to change, that is none of anyone's business, really.   Stuff happens that changes minds.  

People intend to reenlist and don't all the time.  That's about as specific as I can be on that topic.  

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  • Daniel Lehman
    Lender · Carlsbad, CA · Member since 2016 · 90 posts · 56 votes
    10y

    OK, I can answer this for you...  In REALITY all your husband has to do is INTEND to reenlist, as long as he is able to if he wanted to.  Hypothetically, IF your husband DID intend to reenlist, to solve this issue you would just have to write a letter to the lender that said "I intend to reenlist" and you would also have to get a letter from his command that said he was eligible to reenlist.  In that case you wouldn't need a full year on the contract. 

    Later, if intentions were to change, that is none of anyone's business, really.   Stuff happens that changes minds.  

    People intend to reenlist and don't all the time.  That's about as specific as I can be on that topic.  

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  • Daniel Lehman
    Lender · Carlsbad, CA · Member since 2016 · 90 posts · 56 votes
    10y

    Just to be clear - I am not advising you to say something that you dont mean, or commit any kind of loan fraud.  I am just saying that guidelines state that if you intend to reenlist you can write a letter and verify eligibility with your command.

    Thanks!

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  • Krista Patrick
    OP
    Northwest Arkansas · Member since 2015 · 17 posts · 7 votes
    10y

    @Daniel Lehman, I actually didn't know that. The bank just told me it needed to be 12 months from now. The only issue with showing "intent" is that we just don't know. That's why we are planning to purchase in NWA. Then if he does in fact get out, we will have a place to live, and if he chooses to stay in, we will have met the occupancy requirement and we could just rent from there and move wherever. 

    I guess that does open up another option though. If we wait until the summer when we originally planned to purchase, maybe we will have made some decisions on "intent". 

    Thanks Daniel!

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  • William Porterfield
    Contractor · Little Rock, AR · Member since 2016 · 9 posts · 1 vote
    10y

    Krista, it sounds like you're only considering the VA loan. Obviously it's a good loan product for those that qualify, but it sounds like there are certain restrictions that aren't working for you. I would get in touch with a mortgage broker, explain your situation and see what options are available.

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  • Mike Jimenez
    Investor · Springdale, AR · Member since 2014 · 15 posts · 0 votes
    10y

    Krista, if needed, I would like to partner with you guys as I am local. I don't want anything but will be glad to be your eyes and feet on the ground locally.   Private message me if you are interested. 

    Thanks

    Mike

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  • Bryan O.
    Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    What are the chances he'd be stationed in Arkansas if he does reenlist? Are you happy living away from him and managing the property if he gets stationed somewhere else? I can't offer advice on how to secure the loan, but I would say if you don't even know what your 1.5 year plan is, I'd recommend a little more thinking about it prior to acting...

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  • Paul Thompson
    Investor · Little Rock, AR · Member since 2015 · 130 posts · 119 votes
    10y

    I cannot speak to VA loans or the ins and outs military service. But listening to your situation you could relocate and rent or rent-to-own a place. This way you can learn the market and give yourself time to shop around. You don't have to buy the place you move into. I work with people who need to move out and they lease a place with an option to buy (rent to own) while they rent or lease/option their old place. Once they sell or have tenant/buyer cash out their old place they are then free to qualify for a loan on their new place. Just something to consider.

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  • Krista Patrick
    OP
    Northwest Arkansas · Member since 2015 · 17 posts · 7 votes
    10y

    @William Porterfield, we were considering a VA loan because it's available to us to use but we aren't against other options. Thanks for suggesting. I'll look into that as well.

    @Mike JimenezThanks Mike! I'll send you a message later today. 

    @Bryan O.The chances are pretty good he could get stationed there. But let's be honest, the only thing I KNOW about the military is that I don't know anything. They tend to change their minds very quickly. We aren't worried about living apart though. We've done multiple 12-15 month deployments during his career and part of the reason we are moving now is because, even stateside, he's never home. So if we are going to be apart regardless, at least in Arkansas, we will be apart with family close by. He actually has over a year on his contract right now anyway. Part of the reason we would like to go ahead and purchase is that if he chooses NOT to re-enlist, it would be great to already be set-up somewhere when he joins us. And if he chooses TO enlist, he would be moving about the same time frame and we could choose to join him at that point or continue in Arkansas. If we choose to join him, we would rent the property at that point. We would have lived in it well over a year so we would meet the occupancy requirement. 

    @Paul Thompson, I hadn't really considered a rent-to-own option. That's something I'll look into. Especially if the job requirement gives us trouble. Thanks for the advice! 

    You all have been so helpful! Truly, thank you for taking the time to speak to my situation. 

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