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Updated almost 5 years ago, 01/24/2020
First Rental Property
I am stationed in Norfolk Virginia and I want to start building up real estate. I am only an E-4 in the Navy and I have a car payment along with a few other bills so I really do not have money to throw out. I’ve read posts, listened to podcasts, watched seminars, and read a few finance books but I am still afraid to get started. Even after the success stories I still fear I will crash and burn. Is there any advice on how to get past that fear and get started? Thanks,
Tim
Hey @Timothy Allen,
Congratulations on getting into BP and reaching out for advice. I would start by reading Scott Trench's book Set for Life. Save as much as you can to build up reserves, pay off debt as fast as you can and take full advantage of the cheapest living situation that you can. (On-base housing and food can suck, but it's way more affordable than the alternatives! Small sacrifices now will allow you to succeed later!)
Once you have some money saved up for a solid "emergency fund", look into house hacking your first property. You have access to an INCREDIBLE loan product called the VA loan. It's one of only a handful of loans that does not require a down payment and does not penalize you with mortgage insurance. Depending on your market, you may be able to find a small SFH and get roommates or you could get a multifamily property (duplex, tri or fourplex) and rent out each unit separately. If you can get your living expenses down, utilize your VA loan effectively and get an income producing primary residence, it's hard to go wrong!
@Timothy Allen My best advice would be to reach out to local investors in your area via meetups. Seasoned investors can help guide you in the right direction and may even be willing to partner with you on a venture. You will also want save up enough cash for a hefty emergency fund. Having reserves is not only a necessity when investing in Real estate but good practice for your personal finances.
Personally I'd pay off my car note as soon as possible to minimize my debts but that is not necessary.
Another resource you might check out is using a VA loan to purchase a primary residence to house hack. I recently helped one of my clients purchase a duplex using a VA loan. He will rent out the spare rooms on the side of the duplex that he is living in and have a tenant on the other side of the duplex.
Landlording is not for everyone. You definitely want to get a taste of what its like managing tenants before you expand your porfolio.
Hi Timothy, You're already on the right track just by being here on BP! For me personally, it helped to meet other investors in the area and learn from their stories. It's always great to have a support system and connections who can help you through the process - especially for your first one!
If you go to BiggerPockets.com > Network (In the top ribbon) > Events, you can put in your zipcode and a ton of amazing meetups will pop up.
You got this!!!
Welcome. I have a multifamily in Portsmouth. Recommend joining TRIG (Tidewater Real Estate Investing Group) and going to some meetings. Lots of investors in the area!
Welcome Timothy! I have no advice nor experience to give to you, but I just wanted to encourage you and wish you the best!
Good luck and keep us posted on your success!
Cheers
Hello Tim,
I am currently Active Duty Navy as well. I have a few friends of mine who are investing in the Hampton Roads and Norfolk Area. Are you apart of the Active Duty Passive Income group? Let me know, and I can get you in touch with the network.
Looking forward to following your journey. Hope I can be a resource.
Best, Hersh
@Timothy Allen I’m an investor in the area. I say go to a lot of the different meetup soups around from meetup.com and network with different people and learn from the presentations given
@Cassi Justiz That’s very helpful thank you !!
@Ralph Justiz Awesome thank you !
@Taylor Hudgins I will look at that thank you !
@Kevin Sack I will look it up, thanks !
@Koki Agata Thanks for the support !
@Hersh Rai I am not familiar with the group you mentioned could you tell me more about it ?
@Timothy Allen it is a group dedicated to Active Duty service members only to build wealth through real estate. Has a network of realtors, lenders, and experienced investors who are in the military or veterans across the U.S.
Get with an agent that is able to recommend properties that will cash flow for you. Instead of digging around everywhere you can focus on a set course. You are fortunate to have the option of using your VA loan which will make things much easier. You will have to live in the properties for a set amount of time before you can rent it out per VA guidelines. There are plenty of VA loan specialists in our area that can help guide you. Otherwise just realize that with risk comes reward and it is totally normal to be nervous. This stuff is exciting!
Hi Tim, active duty Air Force here. Is house hacking an option for you? I’m super new at all this too but accidental house hacking is how I got started and it helps ease you into real estate and being a landlord. Works especially well with military since it’s usually a really tight knit group, friends/co-workers can refer others, steady income stream, and people PCS in and out all the time.
Even if you buy just one property and house hack at every new duty station, that's 6-9 properties or more over the course of a 20 year career. I only have one SFH since I just started getting into it as well, but looking at a few MFH and SFH in other areas now and house-hacking in conjunction with everything I learned and am still learning from BP helped me build the confidence to expand.
There are a ton of amazing benefits out there for military like interest free loans that you can use for down payments (I got a $24K 3-year loan with 0% interest a few months ago) or to pay off higher interest loans, SCRA/MLA benefits on credit cards (waived annual fees and additional benefits.. I haven't paid for a flight or hotel in years), VA loans (no down payment necessary, great interest rates), etc.
Every mission/operation has some risk, the trick is to find ways to mitigate that risk to acceptable levels.
Feel free to hit me up if you have any questions, I’m still learning too! Good luck.
@Timothy Allen - IMO the best way for you to get started would be to use your VA loan benefit to buy a multi-unit. Live in one unit and rent the rest. You can buy a 1-4 unit and will be most likly living for free with a duplex or cash flowing from the point you have tenant's occupying for a 3-4 unit.
- Patti Robertson
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