Hey everybody! My name is Mike and my wife and I are just in the beginning stages of investing and wanted to ask some questions and make some connections. I am an active duty Marine so my family and I are always moving and we really want to get into investing. Our questions are probably going to seem pretty stupid basic but I figured the best people to ask are the ones in the game now. So here are the questions:
1. Before buying our first rental property, do we need a business license(s)?
2. What is the first step? Is it finding a property? Is it obtaining licenses?
3. Is a duplex or threeplex the best place to start or if something bigger comes up, should we take advantage of that?
4. Any newcomer suggestions?
Thanks for the help!
Welcome to BP Mike.
I'm retired military and have been a real estate investor for 35 years. I bought rental houses at every location I was stationed at. Became a millionaire at 29. It's not hard because if I can do it anyone can. I suggest you study BP and learn as much as you can. If you care to read my success story the link is below.
Semper Fi Michael and welcome to BP!
My only regret after 25 years in the Corps was not buying a multiplex I had my eye on in Oceanside back in ‘98.
Not sure which market you’re in but first get your financing lined up. NFCU, PMCU, USAA, PenFed are all great options for you. You’ll get most ‘bang for your buck’ on a VA loan buying a fourplex (4-plex, quadplex) provided you don’t hit the loan cap (you can Google by County what the VA lending cap is). While you’re doing that, drive the areas you’re interested in. Stop and talk to folks, visit the local businesses... get a feel. Download the Redfin app and the Realtor.com app. Start screening properties. Then when you have 5-6 solid potentials, I would contact a Realtor. A great Realtor is worth their weight in gold. Shop for the best.
Tons more to offer, feel free to PM me.
@Michael Andre I would add to contact a realtor that specializes in VA loans. You can find one with the Military Relocation Professional (MRP) designation showing they have taken extra time to learn about the military and more importantly to you the VA loan. Better yet find an MRP certified realtor who is also an investor.
A few things you need to understand about the loan most people don’t.
There is actually a funding fee that is wrapping into the loan (unless you have VA disability) which increases the loan cost by about 2.5% (exact amount depends on how you earned the loan (active vs reserve) and how many times you have used it.
The loan is not considered as strong as a conventional loan offer by listing agents and therefore their sellers. This is because the VA loan requires a VA appraisal which requires the home to meet the 3 Ss; safe, structurally sounds, and sanitary. This means no major fixer uppers. In fact, the actual lenders letter you use is a major part of your offer. If you use a VA loan with a large national lender with no local presence vs a well known local lender that is known in the local industry well; the first is much a much weaker offer than the second. I always suggest to my clients to get pre-qualified by both.
You can ask up to 4% of closing costs, prepaids, and reserves be covered by the seller. This can literally make your loan 0% down. Know that these must be factored into the strength of your overall offer however.
Best of luck to you!
Mike, where are you stationed at?