Military Deployment >> Multifamily Rental Investing

[Daniel Clark]

Hello BP, I've found myself in a rather fortunate predicament and could use some guidance from experienced investors.

I'll be coming home from a 10-month military deployment with approximately 100k tax free income in the bank.

I've been feverishly educating myself on all things real estate investing and I'm confident that it's the best investment vehicle suited for me.

There are a lot of options on the table, so here are a few parameters:

- VA Loan eligible, but...

- NYC resident with NYC residency requirement for work

- Focused on OOM investing (particular interest in Rust Belt for a variety of reasons: Pitt, Cleveland, Cincy etc.)

- Student loans paid off. Zero debt overall and credit in good standing (thank you Uncle Sam)

My first instinct is to house hack with the VA loan, but with the residency requirement for work, the NYC market severely limits me from finding a deal that makes any sense. 700k+ cash flow negative duplexes in Staten Island don't do the trick for me!

If I put off using the VA Loan until it makes sense (perhaps after a correction to the NYC market), my immediate plan would be to find a cash flowing 4-plex in the Mid-West and BRRRR it. I also have a very solid biz partner which could help speed up the scale process.

What would you guys suggest? How would you get started in my situation?

Thanks and exited to join this community!

Best,

Dan

[Raphael Collazo]

Hey @Daniel Clark!

I agree with @Allan Bishop Jr.'s assessment of the Louisville market. There has been a lot of investment activity, both on the residential and commercial side in recent years. The benefit of the Louisville market is the cost of living is reasonable, it's centrally located (UPS and FedEx both have a strong presence here) and there's more opportunity to acquire cash flowing properties (the median price of a SFH is $162,800). As a commercial broker and real estate investor myself (currently house-hacking a 4-plex), I'm a huge fan of commercial real estate and the opportunities it affords investors. Unlike residential real estate that's appraised based on comparable sales (i.e. comps), commercial real estate is appraised based on its ability to produce income. Therefore, if you purchase a property that is under performing, update the property and raise rents, you're able to "force" the appreciation of the building. Some of the best books I've read pertaining to commercial real estate investing include:

1. "Multi-Family Millions: How Anyone Can Reposition Apartments for Big Profits" by David Lindhal
2. "Crushing it in Apartments And Commercial Real Estate: How a Small Investor Can Make It Big" by Brian Murphy
3. "The Book On Rental Property Investing" by Brandon Turner
4. "What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures" by Frank Gallinelli
5. "Aggressive Tax Avoidance for Real Estate Investors: How to Make Sure You Aren't Paying One More Cent in Taxes Than The Law Requires" by John T. Reed

These books should give you a solid foundation off which to begin growing your commercial real estate portfolio. Hope this helps and good luck on your investment journey!

All the best,