A New Military Investor

[Kevin Taylor]

How's it going BP community? 

My name is Kevin and I am 26 years old from Paso Robles CA and this is my first time posting a forum in the BP community. Actually, this is my first time ever posting on a public forum. My passions are traveling, camping and fishing. I've been to several different countries and plan on adding more to my list. I would say that my favorite memories of traveling were when I got the opportunity to be an AFS exchange student to Norway when I was in high school. I have to say that it changed my life.   

I've been serving in the Air Force for almost 7 years as a meteorologist. I plan on doing my 20 years and retiring (hopefully financially free and never work again). I've been stationed in a few different places. My first station was Joint Base Pearl Harbor-Hickam and was there for 3 awesome years. I was then sent to Fort Hood TX, where I am currently living. I've been deployed to Afghanistan and I am currently on a deployment to the OIR area (for security reasons I can't say where I am at on a public forum).

I've made it my goal to learn something new on every deployment. My first deployment I got in the best shape of my life as well as finished 3/4 of my bachelors degree, which I finished shortly after I got back. On this deployment I read Robert Kiyosaki's book, "Rich Dad Poor Dad". This book got me thinking about the importance of financial freedom and helped me look at money in a different way. I went ahead and read the rest of Robert Kiyosaki's books, "Increase your Financial IQ" and "Cash Flow Quadrant". I also read Brandon Turner's book on "How to Invest in Rental Properties" and "How to Invest With Little or No Money Down". I have about 6 or 7 more books I would like to finish about real estate investing before I return home and have 100 different distractions. 

I am currently looking at buying a Quadplex in the Killeen area with my VA loan and house hacking one of the units. I found one quadplex that will give me over a 50% cash on cash return and $100 a door even with no money down. I am putting an offer on it now. Unfortunately, I didn't realize how hard it would be to find deals while being deployed but that hasn't stopped me from putting in offers.

From everything I learned since I've been on this deployment the most important thing I learned was from Napoleon Hill's book "Think and Grow Rich" which was to write down your goals and look at them everyday. Well, I wrote down my goals and it is to produce $50,000 of cash flow in 5 years through buy and hold multi-family real estate and house hacking. I believe that this goal is achievable and I have even higher hopes of achieving it after I read the "7 years to 7 figure income". 

After I return from my deployment I will be moving to the Frederick MD area at the end of the year and I will be looking at investing in that area when I am settled in at my new assignment at Camp David. I have been looking on Trulia.com and Realtor.com to research the markets around that area. It seems like a tight market to invest in so if you have any advice for investing in that area I would love to hear it. I am excited about my real estate investing adventure. Let's do this!!!! 

[Cara Lonsdale]

Welcome to BP!  And thank you for your continued service!

I LOVE the Rich Dad series.  Total game changer.  I am glad to see some of your top picks.  You should consider adding THe Millionaire Real Estate Investor by Gary Keller, Dave Jenks and Jay Papasan.  There is also a book called FLIP by Rick Villani that is good if you intend to include flipping in your strategy.

Will the VA allow you to purchase a home while not being able to live in it through your deployment? Usually, there is a 60 day requirement that will require you to occupy within 60 days of the closing. However, I don't know how that would affect you during an active duty deployment. So, this would be a good question for a lender or maybe the VA itself.

$50K in cash flow in 5 years sounds aggressive with a mortgage purchasing strategy, but hey, I want to only offer you encouragement to reach that goal.  All the power to you!!  

When evaluating deals, a good rule of thumb is to be able to clear $100 per door/unit.  Obivoulsy more is better, but if less, I would take a deeper look at the deal, OR evaluate the upside of the ability to raise rents as renewals come around.  Underperforming properties CAN be good deals as far as the acquisition cost, as long as you have a plan for upping the rents.

Regardless of the expenses given to you by the owner, ALWAYS account for 50% of the rental rate toward expenses.  This will be another good rule of thumb.

Best of luck to you, and reach out if you need answers.