Real Estate Investing While in the Military?

Question

I am 18 and in my senior year of High School. I want to eventually start investing in and renting out properties. But I also want to join the military to save up some money and for the benefits like the free school and the VA loan. My questions are how can I start investing in real estate while in the military, what are some tips while doing it, and should I / am I able to get my real estate license now while in high school before I join the military to learn more about real estate and to benefit myself for when I start investing?

Rich Carey · Answer

@Ben Pepin

I'm a friend of @David Pere and know him well, and he's a real estate investor who is still active duty.  I myself am an active duty military member who invested in real estate even though I spent most of my career overseas.  I'm up to 30 doors now.

There is no correlation between investing in real estate and getting your license.  It probably won't help you much at this point.

My advice for joining the military and investing is this:  You need money to invest in real estate.  The military isn't the best choice for that.  If you insist on joining the military, I would join as an officer.  I'm talking purely from a financial perspective, if being financially well-off is a goal of yours.

Also, you need to invest in TSP and IRAs while investing in real estate.  Again, this takes money.  Forget that no money down crap most gurus peddle.  It'll land you in a world of hurt.

Listen to David's podcast as well as mine.  We've both been on this websites podcast.  Look around our blogs as well.

David Pere · Answer

Good afternoon @Ben Pepin,

First, let me commend you on thinking ahead, and for deciding to embark on the great journey that is military service. You most certainly can invest in real estate while in the military. There are actually a lot of  military real estate investors floating around the service.

You can get your real estate license once you turn 18, but i don't think it is necessary. For one thing, you will most likely not get stationed in the state you get licensed in, so you would need to transfer your license anyway. This isn't a big deal, but you can always get your license while in the military. Secondly, you don't need a license to invest. You absolutely can, and I am personally licensed, but it hasn't directly helped my real estate investing at all.

As for tips, i would suggest that you 100% learn about the Thrift Savings Plan (Google TSP Strategies) the military version of a 401k, and immediately start putting 10, 20, 30% of your paycheck in there. That will earn compound interest over the years and grow to a great amount of money, plus it can serve as your emergency reserves, and cash reserves towards mortgage payments.

As for real estate investing, learn everything you can from books, podcasts, and mentors. Then network with people who have already achieved what you want in life, and when your financial foundation is set, take action and buy a home. I love the idea of house hacking with the VA loan as a first strategy!

David Pere · Answer

@David M. That is incorrect. The military accepted a new retirement system (The blended retirement system) on 20180101, which matches up to 5% of your contributions to the TSP.

@Ben Pepin I have some YouTube videos about the TSP (Google TSP Strategies and they will pop up) that will answer all of your questions, but ultimately the TSP is better than moth civilian IRA's. That being said, you can absolutely contribute to both, but make sure you at least take advantage of the 5% matching contribution in the TSP.

Andy Rousch · Answer

@Ben Pepin I talked to David Pere a couple years back to get the courage to invest long distance. After reading David Greene's book on long distance real estate investing (twice) and talking to Dave a bit I went for it and things have been going good (knock on wood). You are making a wise decision but definitely read the book and keep making connections in order to make educated decisions!

Best of luck!!

Ben Pepin · Answer

@Bryan Snyder

Hey Bryan, yes I joined the military. I’ve been in the Navy for about 10 months now. I should be finding out soon where they are sending me for the rest of my contract and I plan on hopefully buying a property wherever that is.

Bryan Snyder · Answer

@Ben Pepin  I see this post is a couple years old... did you end up joining the military?

David Pere · Answer

@David M. That is correct, anybody who joined after 20180101 is automatically in the new system, which receives a 1% match automatically, and 5% match if they contribute 5% or more. The 5% matching contribution automatically goes into the traditional TSP Lifecycle fund, but you can change the allocation, and YOUR contribution can still go into the ROTH TSP.

David M. · Answer

@David Pere

Oh of course.  Sorry, I keep thinking of the 'old school 20 and out' who can contribute to the TSP but don't get matching.  Haven't spoken with many new active duty folks.  For those that chose to convert or the new enlistees, they are in the "new retirement system" I believe which does the 5% matching in the same manner as GS civilians, right?  Thanks for pointing that out.

@Ben Pepin the TSP is better than most 401k's because of the fees are ultra-low.  The Gov't seems to have done this one right.  The TSP website has bulletins / info brochures selling you on this.

David M. · Answer

@Ben Pepin

I believe military members don’t get matching funds for TSP.  Civilian employees get matching funds.  The tsp functions like a 401k.  After you are discharged, your tsp account stays yours.  You just can’t contribute to it unless you re-enlist or obtain federal employment.

Ben Pepin · Answer

@David Pere

Just one question about the TSP? I plan on being in the military for 4 years. How does the TSP work after I get out? And I already have a ROTH IRA so should I try to invest in both of those while I’m in?

Real Estate Investing While in the Military?

Most Popular Reply