Would love some input. First off, I'm very interested in real estate. Don't won't to call myself a newbie investor since I haven't invested at all yet. So, I'm overseas working in Saudi for about another 7-8 months. By the time, I come home I should have around 60-70k saved up. From what I keep reading is how the market is a tight market now and a correction is coming soon. My niche I'm very interested I, is multifamily. I also see that it can be a high entry fee to get into. I don't own a house and I'm also a Veterans so I have my VA loan still available. My questions I have, 1. Should I Just continue learning, networking, latching on to an investor/ mentor and continue to just build my capital up and wait for the market to correct itself or 2 start out with either a FHA or VA loan and find a Small multifamily to get myself in the game. All input is welcome. Also, haven't really found a market yet I live in MD but don't really see much potential there so thinking of out of state investing at some point. Thank you all.
It’s nearly impossible to predict a market correction. You could be on the sidelines for years if you do that. Just make sure you buy low at the middle of the market. It’s the high end that gets slammed the most in a correction.
Find a mentor I your local market and some good reputable wholesalers and you can locate a deal.
Thank you for the advice. I’ll keep learning and find me a mentor.
“1. Should I Just continue learning, networking, latching on to an investor/ mentor and continue to just build my capital up and wait for the market to correct itself or 2 start out with either a FHA or VA loan and find a Small multifamily to get myself in the game."
@Dantuna Pernell, am no expert but a great mentor who also happens to be my buyer's agent once told me, "why wait!".I get the same from watching real estate podcasts and learning all I can about real estate (check out BP Podcasts and others such as Grant Cardone).Sometimes the best way to learn is just getting in there.Seems to me that you are in a great position with your eligibility for VA loans, I regret missing out on that opportunity (my service time fell short slightly so I could not do a VA loan).At 70K saved up, VA Loan, I don't see why you would even consider waiting. What are you waiting for?Best way to learn is to jump in and get started NOW!Sorry not screaming at you, rather just encouraging you to get moving.What if the market takes 2 or 3 years to correct itself?No one really knows when that is going to happen.While you wait, the rest of us motivated buyers are buying up properties that you would have been in the lead position for.If you are in a position to buy, though I see that you are still overseas for another 7-8 months so not sure how that works, but if you are looking to get into the market and can do so remotely, then why not?If your lack of experience is the only thing that stands in the way, I see get out there and go for it and then keep up with BP forums, while also learning from doing and those that have succeeded at doing.Sometimes the best mentors are on the BP forums and you find them for free! Just my two cents, all the best.
Thank you very much. Yea it’s hard to do it remotely seems like since I’m new at it all I still need to see properties and know if the deal is good or not. I do practice on the BP calculators often when I do come across a deal. Thank you again for the encouraging words.
Hi Dantuna, I am a newbie as well but I took a course on tax liens and really wanted to purchase, but I sat back trying to research as much as I could. In the meantime, my classmates jumped right in and purchased the tax liens and this September 28 out of 30 people were able to get the deeds to their properties. They paid from $500 to $1600, most were single units, but a few were duplexes and multi-unit. These properties are located in Gary, IN and you can purchase outright on your own or you can partner with the instructor of the course and he manages everything if you are out of state (or you just hire a property manager). If you have ever considered getting your property through tax liens, I would take a look. I went ahead and purchased two tax liens (online auction) and will there in person in March for their next auction when all properties start at $500. The instructor of the course also provides mentorship if that is what you are more interested in as well.
You are so right, it is hard to do it remotely. I like your fire though, so keep that burning and once you get back, let nothing stop you men, the sky is the limit. Thank you for your service :)!
@Dantuna Pernell it sounds like you will be in a great position to invest when you get home. If I was you I’d do a few things: 1. Start searching Zillow/Trulia for multi family homes 4 units and below. Learn the market values and learn what rents are in the areas you are interested in.
2. Find a good realtor to set you up with email alerts any time a new 2-4 unit becomes available in your areas of interest.
3. If you are looking to implement the BRRRR strategy start trying to find good General Contractors. This way you can have a few people who you already know to reach out to when you are ready to buy and rehab. (if you aren’t familiar with BRRRR I highly recommend you read up on it. )
By the time you get home or maybe even before you’ll really know your market and be able to spot a killer deal. If I was you I’d either use the VA loan to house hack a fixer upper four plex. Then you can use your cash to rehab the units then pull your money back out on a refi once everything is fixed up. Then repeat the process. So many pluses to doing it that way.
@Ryan E. thanks for the advice.
I am a vet and now a MD Realtor. Yea, there are not too many multi units to invest in here in MD but you do see them occasionally. There are plenty of single families to invest in though. An option you might want to look into is purchasing a primary residence then moving out and turning it into a rental. With the VA loan, you have a maximum cap for your loan and this is determined by the county you are purchasing in. For example, Anne Arundel County MD is $500K. So what this means is you could purchase a home for $250K then move out and rent it then purchase a second home for $250K. The property just needs to be your primary residence at the time of purchase. Only real tricky part is your lender usually won't give you your second loan unless you have had a tenant paying you rent for at least 3 months.
The biggest advantage to going this route though is you can make these purchases with $0 down and get a great interest rate of probably around 4%. A typical loan for an investment property is around 7% - 8%
What area in MD Maryland do you live in?
When you come back, I would determine where I want to live and then buy a multi-family house using FHA. Then I would move to more than 50 miles so I could use FHA on another multi-family again after a year. Then I would find yet another multi-family and finance it using VA. After I'd gotten those properties going and kept my powder dry (cash in the bank and continued to earn and had those houses paying for themselves) then I would either refinance the third house into conventional financing or purchase another home to live in using Fannie Mae or Freddie Mac or if the property is right, find a distress sale that will do owner financing.
Be creative. You're in a great position
@Stephanie P. thats a great and creatative idea thank you very much for giving me a way to look at things. My idea was to look at going the FHA route. My plan was to be a owner operator for a year while im gone overseas then once i get back refi out and buy another one.
@Malcolm Lawson when I first wanted to get into investing I wanted to go the SFR route but I love the idea of how MFR work with the more people under one roof. I love your idea and the way you explain getting the @ houses with the VA loan and I would love to explore that route as well. I to live in Southern md just a little more south than you in Calvert county Lusby. Would love to maybe meet up for lunch or coffee once im back if you have some free time. Thanks again for your ideas and replying back.
@Dantuna Pernell, when you return home, look up Southern Maryland Real Estate Investors Group (SOMDREIG) it's a free meetup that meets in La Plata on the 3rd Tuesday of every month. Great way to learn what the locals are doing.
@Steve Cavanaugh thank you, I’ll make sure I check it out when I get back.
Timing the housing market is like timing a stock price. Humans are notoriously bad at timing the market accurately. Unless you have a crystal ball and can predict the future, you should get into investing when you are back in the States with your saved up funds. Multiunits are a great investments. If you can house hack, even better.
Whatever and whenever you buy, always buy below market. Meaning find a property at a discount that needs work, find off-market deals so that you are not competing with everyone on a MLS listed property, talk to family and friends and see if they are selling their house and maybe willing to do seller finance. Buying below market affords you some some cushion in a down market.
Hey @Dantuna Pernell I am familiar with Lusby, I live in Waldorf MD and do most my business in Southern Maryland. We can get together when your free and talk. I almost purchased a rental in Lexington Park a few weeks ago but ended up coming in to low and losing the deal. Homes are really cheap there and with the Navy base there you always have potential renters. Waldorf and La Plata are also good if you are hoping to get renters from Andrews AFB.
@Paul Choi thanks for the advice, just kept reading so much about market so high and didnt want to make a rookie mistake by coming into the market at its peak and next thing you know the market corrects and I scew myself. From all the advice im recieving i'll start doing my research to jump in once I get back.
@Malcolm Lawson I would to love to get together and chat once I return home. I see properties in St marys all the times my problem is I dont know the baseline there to even know whats a good deal or what I should even offer if I think its a good deal. I been thinking waldorf and the la plata area because of DC and Andrews. I plan on going out 2-3 more times to continue saving more. One of the main reason I wanted to find multifamily was use FHA or VA loan while im away and have someone paying my mortgage down for the year while im gone then refi out after a year and do it one more time before i move back home for good then have captial to start buying with 20% down.
Thank you for your service.
@John Parshall you very welcome
I am in the same boat as you and looking to invest in the same type of properties however, I am in Germany and also have the VA loan available to me but since I am going to be here for at least another year I got preapproved for a conventional loan and lined up other financing options as well and I am looking to purchase my next property before the year ends.
My question for you is where do you plan on buying your MF property? If in Maryland, aside from Baltimore the Hagerstown area is the only other place I know that has a lot of MF's available (this is just from looking on zillow and trulia, etc). Also if you plan on using your VA or FHA loan you will have to live in the property for a certain period of time (which I am sure you are aware of) so my next question is do you know where in the states next you will be going? If you already know you should definitely research the area now.
I would love to connect with you and bounce ideas off of since we are both in the same boat.
@Catalino Rodriguez yea from what I have seen so far only places to find the MF are the Baltimore area, Hagerstown then some of the small western towns in MD. I’m really looking into maybe checking out some other states and their MF. That’s nice that you have already got your pre approval out the way. The great thing about my job is I get to go away for a year and that why I want to get a property with FHA or VA while I’m away for the year then by the time I come back I can refi hopefully out of the property into another fha or va back loan.
@Catalino Rodriguez I work with an investor who was stationed in South East Asia and bought his first 6 units in Hagerstown from the other side of the planet. He's under contract for another duplex and has managed the whole process without seeing his units in person. The true definition of leverage... He's built great relationships with his Agent, property manager, inspector, contractors, Lender & insurance all done with a cell phone and email. I think we had to fedex docs for wet signatures but that was it. He's smart and successful and making it happen.
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