Beginner Investor in Norfolk Virginia. Please help!

11 Replies

Hello all! I'm active duty military moving to Virginia around May next year (2021). I have no experience in real estate investing. I would like to start with house hacking but any advice would be great! Should I look into turnkey duplex or SFH and rent out the rooms? Or should I buy a fixer upper and flip it? I'm am trying to learn the market in this area as I am stationed out of country at this time.

Any advice on where to start would be helpful! Thank you all for your time. 

Very Respectfully,

Cesar Ramirez-Fajardo

Hi @Cesar Ramirez-Fajardo , welcome back to the BP forums!  

A house-hack is a fantastic idea and I suspect you'll have some good opportunities in your new market.

With a house-hack the name of the game is ready-to-rock.  In my opinion you want the home to be ready to move into the day you buy it (preferably with some quality tenants already in place) so that the money you put into the deal is limited.  That's one of the things that makes a house-hack such an investment multiplier: it requires little capital.

Go out there and get it, Cesar!

@Cesar Ramirez-Fajardo that really depends on the price points, availability, and your personality. Personally, I would always lean towards a 4-plex house hack over renting rooms. That being said, I'm renting two rooms out of a SFH right now, and it hasn't been bad. Just depends on what fits your situation and personality the best!

@Cesar Ramirez-Fajardo , I just moved from that area 3 years ago and there is a lot of opportunity to house hack. I concur that it is a great way to get started investing in real estate. Yes a four plex or even duplex or triplex is probably better in the long run, but they are harder to find as well. You can totally start with a SFH, I did for my first several house hacks, and rent out the rooms while you are there and then the house when you PCS. Just make sure the numbers work as if it were a rental now.

I'd reach out to a Realtor now and tell them what you are interested in so they can help you pick a location and start sending you what's available. That will give you a lot of properties to analyze for their investment potential and give you a more realistic idea of what your options will be.

Hey Cesar,

The market has been red hot lately here and everyone seems to want duplexes. It’s been difficult finding ones that will cashflow once you move out. 

I’ve advised most of my clients to look at house hopping (buying, fixing up, and living in a single family). This allows you to pick up a new property every year as you build up your portfolio.

I’d be happy to talk more offline. Hope this helps!

-Dan

Hey Cesar,

I am also an investor and active duty member currently in that area. Currently the market is pretty hot here and we did not see a dramatic impact on the housing market during the beginning of the pandemic, so I think it is safe to assume by May of next year, it is still going to be pretty hot. So just a heads up for planning purposes maybe you can take advantage of the winter season (usually known for the "slower" season of real estate) to, maybe if possible, shop around early in advance and hope for less competition. 

Personally, I started with an outdated SFH that I was able to to renovated slowly between underway and deployments and currently living there and renting it out by the room that covers the mortgage. But my partner he started out with the duplex, rented out the other units, and renting out the other room on the unit he is living in now. Both options are great options because you can still house hack either ways but i think the factor of personal preference that you need to consider are the area and share living space.

Small multifamily properties are most likely located in more dense neighborhood that may have narrow streets, no driveways, and busier part of town. But of course that is not always the case. Also, small multifamily listing are not as many as SFH listing so the competition may be a little higher. But the good thing is you can have your own living space if you want by just renting out the other unit.

Since you have more option with SFH, you have more option on the location. But unfortunately, you have to share a living space, which can be challenging if you have a spouse and kids.

In my personal opinion, it does not matter if you decide multi or SFH as long as the numbers work! Take into account if you have to PCS out of the area in the future, is your rent going to cover the mortgage ON TOP of property management fees, regular maintenance, reserves for vacancy and big ticket items that you have to replace over time (capital expenditures). These factors will determine if you made a great investment or not.

I hope this helps and good luck!
  

Hey Cesar! House hacking is definitely a great way to start off! Especially with the ability to use your VA Loan! Finding small multifamily can be tricky considering a lot of people are looking for it. Finding a house with a lot of bedrooms might be more ideal and easier to find! Being in the military I'm sure you could find roommates very easily. I got out a little over a year ago and decided to stay in this area! I would love to connect more just message me!

Thank you all for your input! 

Knowing now that the market is great for house hacking in this area is very motivating. 

To be honest, I'd rather get into duplex, triplex, or 4-plex because of the livings space but if the better deal is in SFH then I'm all for it.

Like you all mentioned, I will reach out to some realtors and start inquiring about what is available. Any recommendations would be very much appreciated! 

As always, thank you all for your time. 

Very Respectfully, 

Cesar Ramirez-Fajardo

Hey Cesar, 
I think there is a lot of good advice in the responses up above.  The key is to see what options you have with financing and real estate experience and connect that to the best options that are currently in your market.  From my experience in the last 12 months in the Norfolk Virginia beach area, 2-4 plexes have jumped up an insane amount and are super competitive and hard to get.  You "can" get them and we have but just make sure it makes sense when you do.  To me, it's all about making sure you are picking up a property that will become a solid asset and investment property for you no matter what form it takes.  You just might need to be creative and open-minded.  I just assisted some young active-duty military guys that were looking for a Duplex into a single-family home with a detached garage in the back.  They will be renting out the main house per room for some friends and then rent out the detached garage to whoever.  Point is, that where you start looking and what you end up with might be a little different.  Just get that portfolio started with something that is self-sufficient, in your budget, and not in a war zone!  

My First recommendation is to get with a lender ASAP to see what you can afford and qualify for, start building your team, and then start looking at properties online that are in your budget and in neighborhoods your team recommends. That way you can get started while you're away and be ready to potentially pull the trigger on something before or when you get into town.


Good luck and have fun!  

As a PM who has worked with lots of single military who house hack, let me share a problem we have run into so you can avoid it. When the homeowner gets deployed, leaving roommates behind, it almost never goes as planned. Bachelor/bachelorette room renters don’t feel any responsibility to take care of te house, mow the grass, stop leaks, be responsible pet owners, etc after you leave.  In my experience, they never do what they tell you the owner they are  going to do.  The owner ends up calling a PM near the time the remaining roommates are ready to deploy, and the PM finds and reports the deplorable conditions that leave the house unable to show to perspective tenants until after they leave. Things generally go from bad to worst when peeps going onto a ship leave behind massive amounts of things they can’t take with them. They don’t feel they will have any repercussions, because they were renting from a friend. This costs the owner lost rent and way more than he/she had panned in costs to get it rent ready.  Having cleaned up the owner’s mess in this situation MANY times, I assure you, even if think it won’t happen to you, chances are good that it will. 

Avoid this disaster by choosing roommates who are in your same command, or have a lease that requires they leave when or before you do. When the owner is there the roommates behave much better.


Take full advantage of that VA loan and house hack. You can't beat 0% down and if you can lock in a 30 year fixed at these rates, you'll be heading in the right direction.

I would stay away from flips starting out, unless you have prior experience with construction and feel comfortable rehabbing/managing contractors. It is very easy for a new investor to lose their shirt on a flip and that would not be a good start your investing career. I would probably go the turnkey duplex route if I did not have time to look for an off market deal. 

Also, try to network with some other active military investors. There seem to be alot on BP and I am sure that they can provide some better advice then I can in terms of putting that VA loan to use.

Get after it!

-BA