All Forum Posts by: Robert Johnson

@Doug Spence I don't know his exact financial situation, but why wait if he can afford to buy now? He can collect rent while deployed, building equity and potentially cash-flowing while he has next to zero living expenses overseas. On the other side of the deployment, would he be in a better situation having bought and rented or waiting outside the market? I'd bet on the former!

If I were deploying in three months, I would be buying as many turn-key rentals as possible and interviewing & hiring property managers to handle them while I was gone. Even if they didn't cash-flow right away, I'd be living with near-zero living expenses on tax-free deployment money and letting rents appreciate through the year, building an equity nest-egg and taking advantage of the tax benefits.

Again, my thoughts could change depending on his financial or family situation, but I'd recommend buying before a deployment for most people in most situations. Definitely spend the deployment time learning and saving money, but he can read and own at the same time!

Doug, correct me if I'm wrong, but I don't believe a deployment counts against your intent to occupy requirement with a VA loan, even if you know the deployment is coming. The military/VA still considers that house your primary residence, even if they are pulling you away from it temporarily. This article seems to support what I'm saying, though it doesn't go into much depth (8 Keys to Understanding VA Loan Occupancy Rules | Military.com).

This could actually be a beneficial loophole where you can use a VA loan, but still legally plan to rent it out in the first year while on a deployment. It's almost like the military considers it a house-hack even if you aren't actually there. Definitely check with the lender/lawyers though - I am not qualified to give legal advice.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $178,000
Cash invested: $35,000

The property that got us started... My wife and I purchased this property in 2020 to live in and decided to rent it out when we moved in 2023. It was such a great asset that we decided we needed more and are starting to build the portfolio!

What made you interested in investing in this type of deal?

The Covid appreciation of prices, rent, and interest made it a much better deal to hold & rent than to sell!

How did you find this deal and how did you negotiate it?

Standard first-time home buying experience to begin with. We did not know we would rent it out when we bought it. In fact, we bought it sight-unseen and was not even in the same state until 5 months later.

How did you finance this deal?

0% down 30-year VA loan at 3.5% fixed.

How did you add value to the deal?

We bought it knowing a few capital expenses were needed. While living there, we replaced the roof, added gutters, encapsulated the crawlspace, replaced the two HVAC units, and rebuilt the deck with Trex. In total, we spent around $35k over the three years we were there.

What was the outcome?

We eventually hired a property manager and rented it out to a coworker who lives there with her husband now.

Lessons learned? Challenges?

The water heater sprung a leak during the tenant's very first week, soaking everything in the garage and spraying her with water when she opened the door in the morning. Thankfully, there was no significant water damage and the unit was replaced the same day.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

TBD! This is only a few months old, so time will tell on the PM.