All Forum Posts by: Elizabeth Colegrove

Welcome!!

So great to see another military family. My husband is active duty. We have 8 rentals that we self manage in 3 different states. While it has had LOTS of ulcer inducing moments, financially it has been so amazing. We got started by buying a house that we lived in and than rented out once we were transferred. 

Let me know if I can help in any way!

Welcome!!

My husband is active duty Navy. We are buy and hold investors. We self manage all 8 rentals, that are located in 3 different states. We got started with his VA loan in 2011. Since than we have bough a house at every duty station that has made sense and rented it out when we left. Let me know if I can help! Good luck and welcome!!

It's a very personal question and depends on your long term goals. We have two houses in Charleston that are very similar. They have appreciated tons, are great rentals but I HATE the HOA and I would like to move the house to a different area as I am over the high taxes and insurance. While I am a big "hold" investor my goal with these is to wait out the market for another year to get the needed appreciation and than 1031 them into better more expensive long term (less hassle) investments.

Food for thought when you sell, don't forget about selling costs. That's why we plan on doing a 1031 exchange for these houses as we won't have to pay capital gains or repay deprecation. 

Look at turn key, many people love them. Personally I would rather buy a great deal on the mls and install my own tenant. I get to reap the benefits of a under value house, and than put a tenant that "I" have installed. All of the houses we have bought as pure investments have made that much money from day 1. Plus they had a significant amount of equity too!

That is exactly how we got started in buy and hold. We bought a foreclosure using my husband VA loan. We lived in the house while we fixed it up. When my husband received orders we rented the house out. Our first tenant offered to buy it 2 months in but we decided to keep it as a rental. We would have made $20-$40k off that house and we did nothing right ;)

We know many military who do the strategy you are discussing. They move into the house, live in it while they fix it up. Since they are living in it they can use "personal property" financing aka VA loan, convention 5% or FHA financing. Than they fix it up and sell it being cover by the capital gains protections. So the money is tax free.

There are a lot of positives with this method. The negatives is that this is time consuming as you have to occupy the house for 2 years for the capital gains protection, 1 year for the mortgage good faith.

We didn't do this as we preferred to keep them as rentals as we have made more out of rentals than we have if we sold them as flips.

Good Luck!

My husband is active duty and we move every 3 years. For us we buy a personal property turned rental . . Therefore we typically we look for single family homes. So we look in the best schools or second best elementary schools. Than we look for worst house in the best neighborhood. By looking at the elementary schools it helps us narrow neighborhoods as elementary school derive neighborhoods. Obviously this doesn't work in areas that the area doesn't derive the schools.

Like everything it really depends WHERE! As @jay Henrichs mention it really depends where the house is located. As a military spouse you see this alot. I know those who have been stationed in big cities make 500,000-600,000 in one 3 year station, while other have made 50-60k during the same boom. I know for my family growing up in the DC area getting their foot in the door in a great school district with a house that has appreciate a huge amount. Was a huge factor in their finances. 

I personally am a huge believer in owning a house. Everyone has to live someone where. If you own your home you have more options. You can rent a mother in law suite, rooms out, etc if you need money. Unless your rent control, owning a house locks in prices, as only taxes/insurance increase.  Of course, these aren't as sexy as the NY time article ;) 

Congratulations on selling your house in Charleston. We have 2 in Summerville, that I plan on holding for another year and than selling. Good luck moving to Phoenix. Did you do a 1031 with the gains or were you capitalizing on the capital gains rules? 

We plan on doing a 1031 to take the money to DC deferring the taxes.

Look  at the stuff that others won't look at.  I have been looking in our market for over 6 months. If all goes well we found an amazing deal, because it was labeled commercial (but didn't appeal to commercial people) and was almost impossible to show (took us over a month). While it was a diamond in the rough, it certainly was rough. So look at everything and not just what fits in your current parameters.

Hope that helps! Good lucks.

@Christine Swaidan I totally understand where you are coming from. I saw my parents self-manage and DIY on repairs and said that would never be me. Than I went to hire my first property manager and the contracts were wusch as disaster I decided to give it a shot. 5 years later I was able to leave my corporate job, but it has had MANY moments in between. The biggest thing I have learned is anyone is replaceable and to treat it like a business. 

You have found an AMAZING group and all everyone wants to do is help each other out. If you are available in Aug you should come to @J. Martin summit. It is semi local in San Francisco and will be an even better place to network!

Just know that you are not alone, and you found an amazing community!