Buy while in military training or wait and use VA loan

[Taylor Westfall]

I am currently in flight school at Fort Rucker, AL. I have roughly 6-8 months left. When I finish here my girlfriend and I will be moving to Texas. I am trying to decide whether I should buy something in Texas now with the small amount of money I have saved up, rent it out until I'm done here, and then refinance to the VA loan; or if I should wait, continue saving money, and just use my VA loan once we are ready to move.

The market doesn't seem to be slowing down and I don't want to miss out on any good deals now. On the other hand it would be nice to have a chunk of money saved up for the move and all the costs that go with it when I am finished with school. Whatever I buy would be something that we would live in for a year or so and then we would most likely turn it into a rental and reuse the VA loan.

any advice, tips, strategies or personal experiences would be much appreciated. Thank you. 

[Scott Trench]

I think that you should start with the end in mind. For example, let's suppose that you have 5 years of service left and you believe you will be assigned to 3-5 duty stations during that time. 

Suppose your goal is to come out of service with $500,000 in net worth across 3-5 properties.

In this case, we can get very specific about a strategy to execute this plan. For example, we could say: 

- In your current market, prices are relatively low. Therefore, you can take advantage of a low down payment conventional loan or FHA loan, and buy a house-hack nearby flight school. Be careful - you must intend to live in the property for one year to use these mortgage products - although orders that reassign you will pre-empt those intentions, I believe. 

- In a future market - let's say you move to Austin, TX - property might be more expensive - like $450,000 on the low end. This would be a great use case for the VA loan product and it's 0% down financing option. Same deal, you can live in this property and house-hack it until your next reassignment. Suppose then that you get assigned to San Diego, and you aren't into that market, and feel it is overpriced. Now, you can use your savings to simply purchase a traditional rental in your first or second market.

- And So on. 

The market conditions are always terrifying. Always. But, if you have a long-term plan that you are willing to execute in an up, down, and sideways market, then that makes the decision-making easier, but never truly easy.