All Forum Posts by: Kevin Hunter

PITI reserve is Principal, Interest, Tax and Insurance. A mortgage lender will require you to have six months, usually, of reserve of these four amounts before they will approve a mortgage on a rental property. Since this will be an owner occupy, meaning you will live in one unit, they may be flexible on the six month requirement, but that will depend on the bank. Navy Federal, USAA and other big banks, will not be. This is why I never use those banks for my deals. I always use smaller local banks. All deals are not "standard" for them, they don't treat every deal exactly the same.

I think you are on the right track with multi-family houses. If I had my druthers I would do the same, but my family situation is different. My opinion would be to limit your risk, at least until you pick up E-6 and start collecting BAH. For that reason, the less units would be better, two being optimal.

@Bryan C. is right about the TSP option but I would caution you to use this as a last resort until you get a bit more money invested in it. If you have 36K in it right now, you can only borrow 18K of it. The VA loan is a far smarter bet in your current situation. All of your TSP will count toward your reserve though so you will be covered for a mortgage as high as 450K. That doesn't mean you will be approved for a loan that high, just that your TSP will cover the PITI reserve for six months for that mortgage amount.

Another option is to apply for BAH Own right.  Unlikely, yes, but still worth a shot.  If you are in good standing, and have a smart plan, and good reasoning for needing it, it may be considered.  Wanting to buy an investment property is not a good enough answer, but wanting to generate supplemental income in order to pay for school in four years would at least open a conversation.  Food for thought.

What areas are you looking at?

@Jimmy Watson

I am in the same exact boat as you. I am an active duty Marine as well. I have used the buy and hold strategy since 2003 but have stuck with single family homes. I just closed on my sixth investment property in June and would love to discuss further if you like. I have used VA twice, FHA once, and conventional three times. The key is owner occupancy if you have limited capital to put down. I chose SFH because I have a family but I understand the profit potential is not quite as good.

Your TSP balance can be used to count toward the 6 month PITI reserve so ensure your broker knows about that up front, which is a major reason I try to max that investment out annually, and you should too!

I know your area well and shied away from it on my last tour, just PCS'd away in June, but only bc of my SFH preferences.

  Answer a couple of questions and I can help you more with specifics:

1.  When is your EAS?  Ballpark is fine, just give me an idea of how long you will be able to live in it before you PCS or get out.

2.  How long have you been in?  I won't ask your rank in the public forum but length of service will help me to understand a little better where you are at.  

You're definitely on the right track and asking good questions.  -Kevin

@Nilesh Makhija, I know it has been a while, but how has this been working out.  I finally got back here in July.  @Justin Pierce and I worked on a deal together and it turned out pretty well.  I didn't get in at a 20% discount but it was close.  Let me know how it is going...

@Matt Schwaberow, did you have any luck linking up with any wholesalers.  I am moving back that way in a couple of months and need to link up with a wholesaler as well.  Anyone else no any reputable wholesalers in the northern Virginia area?

  Thanks.

Mark,
I apologize for the delay in responding. My place is in Santee. It has done "ok" over the years. I have had two sets of bad tenants in the six years I have been renting it out. I had to evict one set and the other just up and left. Other than those two we have been very fortunate. I bought it at the height of the market as a primary residence and then rented out two years later when I moved. That has made for a very low return but the rent is covering the mortgage. Where are your properties?

Hi Christine and welcome. There are plenty of folks from NoVa around the site. I am currently in San Diego but am moving back there this spring. I will be looking for a rehab property in the falls church, fairfax, alexandria area so if you come across anything there, please float it my way. Where is your rental property located?

Thanks all... I look forward to chatting with all of you.

Brad, I used an agent on four of my properties. The first property I bought was an investment SFH in Las Vegas that I bought in 2003 and sold in the beginning of 2005. I used a realtor for that. The property in SD and the two in Virginia I used a realtor for as well. The 2 in Virginia I used a realtor that was also a property manager. After the purchases I negotiated a year of free management. I didn't use a realtor in Myrtle Beach bc I had the house built so I worked with the builder. I did consult a realtor just to ensure I wasn't missing anything though.

The property management piece is a difficult one because the spectrum of good to bad is huge. My suggestion is to interview many managers and find the one that works the best. Also, set expectations early. What kind of feedback do you want, how often do you expect them to inspect the property, etc... Some managers act like rent collectors only, so after the lease ends they find out there was a bunch of damage to the property and are completely shocked by it. If they had inspected the home periodically they would have caught it earlier or deterred it.

Hey Derek, thanks for the response. Managing the out of state rentals can be simple or difficult, just what you want to hear right?!! My SC property is rented under a long term lease and I do it myself. I havent't had too many issues but I don't have a lot of contacts there so when something arises I have to do some searching. The Virginia properties are managed by a PM but he is really good. He is negotiable on his fees and he does most of the work himself. The SD property is another story. I bought it in 2005 and moved to VA in 2008. I tried to manage it myself but had tenants who took advantage of me. I hired a PM and they have managed it since. They are not great but it prevents me from having to deal with alot of the issues. I will tell you that every time I make a purchase, I factor 10% for property management fees into my worksheet whether I plan to use one or not. This prevents me from having a cash flow positive turn into a cash flow negative if I have to turn to a property manager. I have a job that requires me to move somewhat regularly though so I don't have too much choice.

Hello all, my name is Kevin and I am a new member at BP. I have a full-time job and am a part-time real estate investor on the side, although I would prefer it to be the other way around. I currently own four investment properties, all SFH. I have two in northern VA, one in Myrtle Beach, SC and one in San Diego. I look forward to discussions with you all.