Military Advice: ETS

[Eric Schenck]

I am grateful for BP and those that offer their advice in the forums.  I'd be in a completely different situation without it.

I am 18 months from the termination of my military service contract (ETS).  I'm in my reenlistment window and am on the radar for nominative assignments.  However, toll on health and time the Army demands is making that retirement paycheck seem less and less appealing.  

I really want to start my own business.  I've always been interested in real estate and want to build a business in that field.  My current job is extremely time consuming which is forcing me to focus my efforts.  I've been hitting up the library for Real Estate Investing books and listening to the BP podcasts in effort to learn the biz and choose my niche. 

I'm wondering what advice those that have gone before me might have to offer.  I'm very interested in your ETS AAR.  What did you do right?  What do you wish you would have done differently?

[Mike Makkar]

Welcome to the forums, Eric

One added advantage you have is that you'll qualify for VA loans for rock-bottom rates. I think VA's get at least a point lower than others for a fixed loan. That's going to mean at least $100 extra cash flow. If buy and hold is your goal, go with the 1.2% to 2% rule in real estate. That is you want your monthly rent to be more than 1.2% of your purchase price. For eg. if you buy a property for $100k.

$100,000 x 1.2% = $1200 per month

Then your rent should be over $1200 per month. Ofcourse this going to depend greatly in your market. People in cities of California (SFO or LA) would have to drive 2-3 hours away to find properties to cross the 1% market. Where as people in Kansas City or Houston or San Antonio, 1.2% are dime a dozen. They usually shoot for 2% returns. I did a quick check in SC and I think you'd be able to do the latter.

But combined with your eligibility to qualify for VA loans and being in SC, you've taken the first step to our road to freedom, my friend!

Good luck!