(Active duty military) First real estate investment

[Ronald Bredemeier]

Hello everyone, I am currently active duty military (USMC). I have 3 1/2years left on my active contract. I was really interested in real estate before I had joined. I’ve heard of other active duty members buying properties at each duty station, and then renting them out. I thought it was a good idea. That was until I got stationed in Honolulu, Hawaii. Everything is really expensive here. However, I don’t want to be stagnant for 3 1/2 years, but I also don’t want to bite off more than I can chew. I can easily save $1500 per month, just to be safe we’ll say $1000. I have $4000 in that real estate savings account as of right now. My question is, should I think about investing out of state with the position that I am in? (I’m originally from Lincoln, Nebraska) Or should I try and make something happen here in Honolulu?

[Aaron Hale]

@Ronald BredemeierThank you for your service, brother. I wish I had only realized the powerful tools there were available to me as a service member earlier in my career.

First, don't discount HI immediately Yes, it is a tough market, but you have some advantages including this forum. Military members can utilize the VA loan which is as little as 0% down and something around 3.6% interest. Plus, you can put your BAH to the monthly mortgage instead of tossing it away in rent.

However, you are right in one aspect. You don't want to bight off more than you can handle. ...but, instead of going smaller, maybe you should consider going bigger. Anything up to 4-units still qualifies for a traditional mortgage including a VA loan. House hack a quad by living in one unit, rent out the other three, and let your tenants pay off your mortgage. It is without a doubt the easiest way to get into a market like Hawaii's.

VA loan + BAH + house hack = a pretty sure footing for the remaining time you have on station. during that time you can find a solid property manager to take care of things once you get reassigned back to CONUS.