Investing in a buy and hold while serving Active Duty

[Nick Lawler]

I am currently serving active duty in the Navy and am interested in getting started with big and hold real estate investing. However, I don't want to wait until I get out of the Navy to begin. I am interested in Single & multi-family properties to owner occupy at my current duty station with roommates, and then rent once I move on to the next duty station.

I am unsure of how to get started with the right financing process (VA loan, hard lender, heloc, etc.), finding a great property manager once I move to the opposite side of the country, and go about refinancing so I can purchase a property at my next duty station and repeat the process.

My biggest concerns are that I won't have time to attend to an issue at the property if I'm deployed or am unavailable to leave my next duty station to come back and deal with whatever problem arises. Also, I am concerned that not getting a great deal on a property or financing here could leave me with an undesirable debt to income ratio when I am at the next duty station.

If there is anyone that has past experience with this situation, or has worked with someone in my shoes and could provide guidance so I can get started on the right foot , I would appreciate it.

[Jon Lallande]

Hey man, 

Glad to see more active duty members looking into using their VA loans to build wealth. I did something similar while stationed on Camp Pendleton. I used my VA loan to buy a house, lived in it for a while, and rented it out after I moved. If you are looking to use your VA loan you will want to do it while you're in and preferably have at least a year left on your contract or a job offer lined up in a similar field as your current job.

Renting to military families is typically a safe bet. You will have less problems with vacancy, military families move at all times of the year, and your active duty tenants will have a consistent paycheck. Plus, you probably won't have to worry about your tenants doing drugs or committing crimes in the house.

With your VA loan you can get into a house with 0 percent down and not have to pay PMI (private mortgage insurance). You'll also have a better rate than most other loan products with low down payments.

If you are worried about a situation arising while you are on deployment. I would consider hiring a property manager. At the very least, hire a property manager for your deployment and leave a trusted family member in charge of handling any decisions that may come up while you have limited access to your phone. 

I would advise against using hard money for your first property. Especially if you have other options. Hard money loans much more expensive to obtain and have much higher interest rates than traditional loan products. HELOC stands for Home Equity Line of Credit so that will only be an option for you if you already have a house that has equity in it.

If you're looking to get started, do some research on lenders and mortgage companies in your state. They'll be able to get you pre-approved so you know how much house you can afford. I'd also recommend finding an agent that is familiar with your situation and investor friendly. Run your numbers before you buy. Also get multiple opinions on the area and make sure you know what similar houses nearby are renting for! 

Hope this answers some of your questions. 

Best of luck!