Active Duty Real Estate Investing (Long)
I am on active duty and have an opportunity to attend grad school for a 2 year program while still on AD, which means free tuition, full military/health benefits, and housing allowance based on the zip code. I want to maximize this opportunity by buying and then when I leave turn that property into an investment property for passive rental income.
CURRENT REAL ESTATE HOLDING
Currently, I own my current own, purchased in 2015 ($195k total, $100k remaining on the loan), and do not own any other properties.
BAY AREA PURCHASE IN SUMMER 2020
I was accepted to a 2-year MBA program in San Francisco, so as of summer 2020, I will move out there with my family. I am currently on the East Coast.
The BAH (Basic Allowance for Housing) for the zip code of my program based on my rank (and "with dependents" status) is a tax-free $5,134 a month (in addition to my taxable base pay of approximately $6,241), which I would receive regardless of if I rent or buy. If I was single, I'd consider an RV or a shoebox to pocket the vast majority, but I think the divorce costs would ultimately outweigh that profit lmao I do not plan to buy *IN* the city as even as high as that is, it's still not enough to really get anything comfortable. Does anyone have any experience with SF real estate? I was thinking in/around the San Bruno area (which I recognize is still not cheap). Realistically, $850k (with 5-10% down via a Jumbo VA loan) is my limit (and that's an *UPPER* limit). Any thoughts on specific locations, especially with great rental potential? I feel that south SF is a prime location because of being between SF and San Jose as well as proximity to the SFO airport. I was originally looking north of SF (Marin area just north of the bridge), however I feel it would just be too far? Also, same with the east side of the bay. Again, I would be there for two years before moving back to the East Coast (most likely the DC area) upon completion of the program.INVESTMENT PROPERTY AT CURRENT LOCATION
I would like to procure a property in the next few months (duplex/triplex/quadplex) to rent out to start with passive income. The plan is then to rent out my current house with an expectation of 10-20% over the monthly PITI cost when rented out.
I am confident a du/tri/quadplex would do the same at a minimum, but with an expectation of even better. Can anyone direct me to some resources on how to properly look for these kinds of properties (and what to look for)? I am struggling to search via zillow, etc. and I'm not sure if there aren't that many in the area (doubtful) or if I'm not looking in the right place. The intent would be to 1) add a property to my portfolio and then 2) use the next 12-14 months to gain experience as a property manager/landlord before doing so remotely. I am looking in the $150k (max) price range, and can secure a 5% down VA-"like" loan (which negates the occupancy requirement associated with typical VA loans).FURTHERMORE - TAXES
One thing that I have always hesitated to dive fully in when it comes to real estate investing is the tax. Not only would I love to know thoughts on the new tax bill and property ownership, but just the profitability in general when it comes to PITI and then tax returns (I pay no state taxes on income thanks to FL residence).
Would love any insight on how to make either a reality (or to be dissuaded and brought back to reality lol) As always, I really appreciate the attention to detail and deliberate effort this forum goes to in order to provide guidance. It's much appreciated :)