Military wanting to invest in rental property. enlisted

12 Replies

Iam currently in the barracks (enlisted in the military) and want to invest in rental properties. Will banks finance any of my properties? The problem is Iam not going to be living in any of the properties I buy cause Iam forced to stay in the barracks. I just joined I am 19 have 20k saved up want to buy a sfh for 100k need 80k financing

Hi John. If you have sufficient income, good credit and you can put 20-25% down, I don't think getting financing will be an issue for you. You should be able to confirm your ability to borrow by simply calling a few lenders. Having some reserves set aside for unexpected expenses is important too.

Would you be able to manage a property while you are serving? If not, you should think about who will manage the property for you and budget accordingly.

If you have not already, I hope you take the time out to read up on real estate investing and to network with some seasoned investors here. Learn from other people's mistakes and successes before you fork out your own money. Check out all the BP Podcasts too. They are very informative.

This post has been removed.

Where are you looking to buy? My experience from, from a prior enlisted standpoint, is the banks like for you to be at least an E-4 or above before they will consider you. May not be the case any longer... Just check with your bank. Have you considered negotiating a seller financing deal? 20k is a significant down payment for seller financing. I am about to sign the paperwork for 7 rentals that cash flow about $800/mo with only $5k of my own cash. Tenants will pay the mortgage for the next 10years, then I enter into a 3-year 0% seller financing deal. Point is... Use your money wisely. Don't fall into the trap of borrowing from the banks if you don't have to.

Yep, banks will finance them if you qualify. No problem, and doesn't matter where you are living or where the properties are. You just have to put down 20-25% down (SFR or MFR) and it will be an investment loan. Other than that, nothing much else to it!

@John Carter  

be extremely careful.... you may be better suited to partner with some one on a fix and flip get some experience before you take on rental properties... lots of risk in rentals DIY at those price points.

I just purchased a duplex with the VA loan with no money down. You can use your VA loan to purchase a multi property live in one side and have a tenant pay most or all the mortgage which makes it rent free for you. Being new to the military and not having BAH yet is going to be rough at first till you make E-5. Consult a VA Loan specialist they can assist you. If you want to do a FHA loan you'll have a down payment due and also PMI.

That is amazing to have that much in the bank so young! You are off to an amazing start!!! Yes you can buy a house with 20% down. On the other hand, you are young and you have a long career ahead of you. You are also in California where the house costs are high. We have been very successful investing in the military.  We started off with personals and have branched into pure rentals.

How long do you expect to be in the military? Have you thought about making it a career? Have you looked into the awesome benefits they have to provide for your income? You are allowed to live off base sooner than later. Have you thought about attacking your real estate in a two prong attack.

1) Earning Rank- therefore being allow to live off base, earning more money increasing your saving AND your W2 income. You can do this buy getting your education. The navy will pay for 16 credits a year. They offer free class on base and the boat. Take advantage of the free, getting you the education and rank while preserving your investing money.

2) Investing- This is where you buy houses at each duty station renting out the rooms to your buddies. At first you use your VA loans and than you do 5% down. Than as you find great rentals, you buy them with all that money you have saved at 20-25% down. 25% is when you get to 4+ rentals. Don't forget you will have to have reserves. The bank requires 6 months of mortgage payments in the bank. They will count your retirement money. So I recommend you put X amount in your TSP account from the very again. This will allow you to build a second basket while making sure the reserves aren't a reason why you can't buy the house!

I know it seems daunting now at 19! You read this site. Your exited and you want to LEAP into real estate. We have done VERY well and grown very fast. We have done 5 house in 3 years. We are on track for 3 more in the next 6 months. The key was building up this backbone so that when we started we could grow QUICKLY and successfully! For us this backbone meant establishing our careers, having the W2 income and being able to handle the stress of real estate management

So take the time to build your systems. Babystep it to your success. Before you know you will have outgrown many of us!

PM me if I can HELP!!! Always happy to pay it forward. I wish you the best of luck! you have your shoulders screwed on right. Now you just need to get your tool box in shape!

@Elizabeth Colegrove thanks Elizabeth great information Iam already E3 in about one year I will be E4 with probably more savings and I expect to be in the military for at least another 29 years.  do u have any military background?     

@Damien Christian  thanks Damien appreciate all the help.

@Dennis Chavious  thanks for the notice Dennis

@Matt Lawhun  hey Matt I'm looking to purchase somewhere around Kansas or Texas and how does the seller financing work?

@Ali Boone  thanks Ali

@Jay Hinrichs  thanks for the advice jay

@Todd Hall  thanks todd

@John Carter  

My husband is active duty navy. I am just the spouse ;) we have done well turning this crazy lifestyle into a great place to build our "empire" through our transient lifestyle. 

@John Carter  I know being in the military can make things complicated. As long as you can qualify for the loans and have the knowledge base you can do well in real estate. Depending on your chain of command it may be possible to live off post even if you maintain a barracks room, but that really does depend on your leadership. I have soldiers who live off post even though they are technically single. I hope everything goes great for you, good luck.

@John Carter  

Welcome to the site and thank you for your service!  I love seeing other military folks making moves!

Also as others have recognized, congrats on saving up so much so early in your career!

I'm active duty AF and understand that no matter where we invest, our rentals eventually become out of state investments whether we like it or not!  For that reason, I've actually focused my investing on wherever I can get the best returns. With the exception of my first property that turned into a rental when we PCSed, we have stuck to out of state investments in order to maximize return on investment in markets where the numbers work. My last assignment was three years in the Netherlands, and now I'm in DC. In both cases, buying locally was not going to provide me with solid cash flow. So I started looking for ways to invest in locations where the prices were low and rents were high. For me, I've found what I was looking for in Cleveland and Indianapolis. It took some extra research to find people I trusted and were comfortable with, but it's been worth it for us!  That may be a good option for you and plenty of people here can recommend companies or other investors to work with if you want to go that route.  One option for you might be to use a reputable turnkey provider in a market you're interested in because you could learn the process while remaining fairly hands off.

I would definitely buy locally if I'm moved somewhere the numbers work down the road, but until then I'm happy buying where they do! The only down side is that you won't be able to use a VA loan for investment properties so you're stuck putting 20%+ as a down payment or using non-conventional financing. Again, for me it's been worth it but you have to decide what your goals are.

Best of luck and let me know if I can help answer any questions along the way!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here