Guam Purchase $528,000

[Nick Nesseth]

Offer accepted on a house in Talofofo, Guam. The house is a new construction 4 bedroom 3.5 bath, two stall garage, big lot, concrete fence w/ electric gate and beautiful uncontested oceanview. 

I had originally intended on purchasing in the 200k-300k range, however the houses seem like a bag of worms. Guam REI will understand that houses here are made from concrete construction materials and that space on the island is limited, so prices are already higher than normal for the stateside equivalent. Even in the 400k-500k range it is tough to find houses that are in good condition. I was also planning on buying and selling the house in a relatively short period of time. I changed my mind on this front and instead will be holding on to the property and relying on the continued military presence to provide tenants to pay down the loan.

While I am still in the military, paying the mortgage will be easy. With current interest rates, I'm looking at a monthly payment of ~2600/month. Comparative houses in the area easily clear 2600/month. Military Overseas Housing Allowance will pay the same 2450/month for a very wide range of housing quality and location and a Cost of Living Allowance of ~1000/month. My target market will be Navy military (South of highway 4 for navy schools) with families. I'm expecting rent to be around 3000/month, however it is not unheard of for these "Executive Homes" to list for 4400/month. The builders of this house built two identical houses adjacent to it, the house that is higher up has a slightly obstructed oceanview however the builders/sellers have the perception that higher is better even though competing buyers all prefer the house that we have an offer accepted on. The higher elevation home was sold for 540,000. We got a sympathy card for a previous offer falling through on the fault of the seller, so we were offered this house for the same price as the previous house. Much better house for the price.

I am married and child free, with dual income. This will be our first home purchase. 

Rambled a bit here, but I just wanted to get my thoughts out and see what you guys think. I am definitely taking a risk, however I believe that we are making the right decision. Though I think this is gonna scare a lot of folks.

Thanks for your time!

[Rolland Wimberley]

Nice. Congratulations on the closing and hope all is going well now. How are things going so far? 
I am doing the same thing on a smaller level. Purchased an updated 2 bed, 2 bath condo in Chalan Pago with the plan to live in it and house hack the other room for now. Then have military rent the full apartment for the $2205 when I move off island. 
Are you planning on self managing or do you have someone picked out to be a property manager?

I would be interesting in meeting other REI here on island.