Getting started in Jacksonville, FL

[Louis Sutton]

Hey guys, I'm currently in the military and I'll be moving to JAX, FL in May. I've been on Biggerpockets for a year, lurking & searching, deployments, listening to podcasts, and anaylzing everything on Zillow lol. I'm now ready to launch my Real-Estate business. I'm in the process of getting pre-qualified now for a VA home loan. I want to House-hack to get started. Any leads or advice would be greatly appreciated starting out because you guys are really the only well of knowledge/support group I have. Thanks

[Kevin Hunter]

@Louis Sutton, as a current active duty military member who buys a house at every duty station I will give you my two cents.  First, get to know the BAH rates.  Not just for you, but for your target audience.  When you leave, who do you intend to rent to?  Are you looking for two or three E-4s or E-5s to rent your place or do you want an E-7 or O-3 family.  Once you determine who you want to rent to after you leave, then you can start to work your numbers.  One thing that is really nice about this method is it takes a lot of the emotion out of the deal very early on.

After you identify your target renter, look at the market and where you want to find a property. That will be driven by what commute you are willing to make and what commute you think your tenants will be willing to make.  During this step, I would also reach out to folks at the base that you are joining.  Ask them where the (insert your desired rank here) are living.  

Once you identify your target area, start running the rental comps.  Figure out what the average rent price is per bedroom, or square foot, to understand what sailors in the area are paying for housing.  Keep in mind that there will be variables which will affect this number, i.e.: garage, yard, pool, etc...  You can also reach out to a property manager for this step.  I would avoid asking your real estate agent as they can be conflicted.  Reach out to a property manager that you get recommended from BP and ask them how much you can assume to get in rent.  

Now that you have identified the the best area to purchase, and rent comps in that particular area, you can work your numbers backward to figure out what you can spend in order to get into that area and still maintain your goals on the backside.   There are things that you will want to consider when buying even though they won't be a factor until you leave.  For example, you need to factor in a monthly property management fee.  Even if you can't possibly imagine needing a PM, plan for it.  It will cost you 8-10% of that monthly rent.  Capital expenses are a big one that people usually forget.  Plan for 10%.  Does Jacksonville require an owner to pay any utilities?  If so, factor that in.  

Now that you have identified your target renter, target area, figured out what the rental comps will be, and worked your numbers backward to figure out what you can pay, you can start shopping for properties in that price range.  What you need to remember, and I know this from experience, is that this should not be emotional.  Many folks move to an area and want the perfect home in the perfect neighborhood etc...  If this is truly an investment strategy for you, than there is no emotion.  The numbers are the numbers.  It has to work.  You make money when you buy the property not when you rent it out, or when you sell it!

Good luck.   Feel free to reach out for any further discussion.