Should I wait for my VA Loan?

Question

I graduated high school this year and couldn't get a student loan to pay for college. I might be lucky that I didn't fall into the student loan trap. So, I decided to join the Air Force and received my shipment date. I have been working a part time job and saved up everything and now have $10,000. I have also been reading books and forums on real estate investing and decided that I should invest in rental properties near military bases since military personnel have BAH (Basic Allowance for Housing) and stable job and would make great tenants. Also, I have read that newer or recently rehabbed properties will have less chance of needing unexpected repairs and maintenance, so I am more interested in the BRRRR method as it would keep the Capex and Repair expenses more predictable. However, I am stuck on choosing when to start. If I wait until I become eligible to live off base, which is at least after three years of service for the Air Force, I could use the VA loan. The VA loan is better in every way as it requires no down payment, competitive interest rates, no PMI, and the entitlement can be restored and reused. Though, it requires me to live in the property for at least a year, and the restoration is a little complicated and I can't use it till I live off base. Creative financing and other loans allow me to start early and are much more flexible (but with trade-offs like higher interest rate, etc.). Which one should I try? Any advice would be much appreciated! Thank you for your time.

Alan Asriants · Answer

VA loan is an amazing program for all the reasons you pointed out earlier.

My recommendation to you would be to continue to save up, find other forms of income if possible, etc. I know with the military you are likely subsidized for housing, food, etc - if so that is a good chunk of change you can put away. Engineering roles in he miliatry pay weell fom my understanding so consider those too.

Put money away into savings but also use this time to put money into other investments like stocks and mutual funds that will work with inflations and grow your money. When you are ready to use the VA loan you will be better prepared and have a good cushion underneath you. Save like an animal. In the meantime, door knock ,find distressed properties you can wholesale or sell to local investors to make more of a savings - your side hustle.

Don't rush to throw that 10k into a risky investment. GRow your money and when you can take advantage of the VA loan and get yourself a small MF 1-4 units.

Hamp Lee III · Answer

I agree with the other comments to wait and save.

I just retired this year from the Air Force after 30 years. I own five properties, with three being VA loans.

If I started at my three year mark, I would have owned a lot more.

Many people look for REI to be a way to get rich quick. There are some avenues like that, but many more build a legacy moving a bit slower.

Use the time to be intentional about educating yourself and saving. This time isn’t wasted if you use it wisely.

I wish you all the best.

Matthew Thornton · Answer

When was the best time to plant a Tree? - Yesterday

When is the next best time? - Today

Ashish Acharya · Answer

Congrats on graduating high school and seriously, I’m impressed you’ve already done this much research at your age. You’ve gotten a great response from Alan already, and honestly, I’d say a lot of the same things.

Since you’re going into the Air Force, take advantage of the benefits you have right now. Keep saving as much as you can, consider high-yield savings accounts or other options Alan mentioned to get more bang for your buck, and use the time to learn the basics you've already been doing, and maybe try to find a mentor who can help you learn more about renovating.

If you're able to, house hacking is one of the best ways to start, getting a loan in your name so you get the lower interest rate, live in the property, and rent out the extra rooms. That lets you cover most (or all) of your mortgage and learn how to manage a property hands-on. If you wait to use the VA loan, you could do this with no money down, live in the property for a year, and still write off the rental portion (repairs, interest, depreciation). It’s a tax-efficient start.

From a tax angle, house hacking lets you write off part of your expenses and then, once you move out, the property becomes a full rental with depreciation and other tax benefits. But it does sound like there are good opportunities near those military bases, so keep an eye on those as you grow your funds and figure out what you want to do.

As you get deeper into real estate, always keep the tax strategy in mind. A lot of people get into real estate specifically because of the tax benefits, things like depreciation, write-offs, and the ability to offset income. Even as a military professional, you already get certain tax advantages (like tax-free BAH and sometimes tax-free income in certain duty zones), so layering real estate tax strategy on top of that can put you in a really strong position. And as your career grows, the tax strategy becomes just as important as the cash flow, that’s really how people build long-term wealth.

Should I wait for my VA Loan?

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