To Buy or Not to Buy: Military Spouse buys first home in Georgia

13 Replies

Hello Bigger Pockets Community,

First I would appreciate any and all feedback to my question: is it a good idea for me to finance our first house?

My question is should I finance the first home my husband and I will purchase? Heres the situation: my husband is active duty military and I am currently working at a financial institution with a year there. We currently rent because we weren't in the position to purchase when we got here to NY but we know we will buy a home at our next place in Georgia. 

I'm sure my husband could get financed, he has the Va loan which is very attractive because you can do no money down no pmi etc, thats always an option. But we have a goal of financing as many properties in each of our names (separately) as possible. I'm considering purchasing an investment property while I am still working my job and when we move there we can move into it. If we like the market, we could, purchase another home in my husbands name without any trouble. I may not be able to qualify for another property for a year or two depending on how quickly I can find a job. 

I'm know there are pros and cons to each, with an investment property we need 20% down, and I would need to convince the lender that my income is stable, which is up in the air, but I would love any feedback I can get. Is this a crazy or bad idea?

Landlording is hard and long distance landlording is harder especially for people new to RE investing.  However, I will say you have made huge strides by simply finding BP, I wish I would have found it when I was a newbie.  

I think you are worried about getting qualified when you get down here and that is a valid concern until you have a new job, but buying simply because you are qualified, particularly in a pretty slow area like I believe Ft Drum area is, probably is not a good idea.  

I'd strongly suggest you start researching RE in Hinesville or Columbus, I guess you could be going to Augusta, too.  Whichever city you are PCSing to.   

I'm sure you or at least your husband knows someone who has recently been assigned to Drum from Stewart, Benning or Gordon.  Ask them about real estate at their former duty station.  

Meanwhile, I'd save as much as I could since that will help you with down payments on investment properties and for your reserves.  

Obviously, all of this is assuming a pcs not an ETS.  

Hi Again :) 

As we talked, my husband is active duty. We got started with our VA loan because it was what we could afford. Than I went back to work and we invested my salary into 2 rentals than we moved again. For us it makes sense to leverage whoever has the best job at the time, since it changes every duty station.

We have done very well self managing our houses at every duty station that we have been transferred too. This has allowed us to save tons of money, although there has been some moments over the years.

The VA loan can be split up. so that is a huge bonus. Here is a VA loan guide I put together for BP.

https://www.biggerpockets.com/renewsblog/2015/12/0...

PM if I can help further! While owning homes has definitely had LOTS of moments while being an active duty spouse. It has also been such an amazing blessing.

VA loans should still be assumable also! If you want to buy, find someone who purchased back when there were foreclosures aplenty who might be for sale right now. It is likely in the MLS some of the smarter agents might even list that the loan is Assumable. Others you will have to dig deeper and or you might know that this neighborhood or that street such and such has a bunch of likely VA loans because they are lived in by military. Just have your agent ask their agent. Or call the listing agent directly. The idea is that you can benefit from their windfall when they purchased when the market was slower, or even purchased a forecloused home using the VA loan to buy. Maybe they will owner finance any big profit they are making or maybe it's not even on the market and go after those first whcih might now be rental homes, unwanted by the owner who is now stationed far away. Most people don't want to be a landlord so that's why I say look for those first.

VA loans are assurance but not attractive to the veteran who is selling. If a veterans loan is assumed by a non-veteran then the veterans entitlement is still tied up in the property. They will probably not want it assumes so that they can get their full entitlement back to buy their next home.

Wow thank you guys for your quick responses! I appreciate the feedback.

@Cal C. We don't want to buy a home here at Fort Drum for a couple of reasons- the main reason we aren't ready financially quite yet and we would rather wait until we are in a good position to get our first place at Fort Stewart. Also, taxes are killer and if the house sat vacant it wouldn't be cheap at all. Also, I would like to be fond of the place we have rentals, and I wouldn't like to have to visit Northern New York again if I didn't have to. We are looking at Hinesville if he's at Fort Stewart but might have to change that if they send him to Hunter.

@Elizabeth Colegrove thanks again for your help :) I think what you're saying makes a lot of sense- get the smartest and best financing possible, when we can get it! I will definitely check out your VA guide. This is what I am leaning towards now. Question: do you continue to self-manage out of state? How does that go?

Originally posted by @Amanda Arredondo :

@Elizabeth Colegrove thanks again for your help :) I think what you're saying makes a lot of sense- get the smartest and best financing possible, when we can get it! I will definitely check out your VA guide. This is what I am leaning towards now. Question: do you continue to self-manage out of state? How does that go?

 Self Managing has had tons of moments but financially it has been beyond beneficial. We save over $15,000 by managing ourselves.

@Amanda Arredondo

Loan assumptions are not very prevalent right now because interest rates are low and borrowing money is cheap. If interest rates were like 10% ten years from now, assuming a mortgage with a 3.5% rate is very attractive. Assuming a mortgage isn't really seller financing because there is still a third party lender and they'll need to approve the new borrower; you essentially take over the payments and pay the owner a negotiated downpayent based on the equity (which is determined by the agreed upon sales price). Most veterans won't want their VA loans assumed by non veterans because their entitlement will still be tied up in the property.

Talk to a local loan officer who handles VA. It is just like qualifying for a regular loan. You still have to have all the right credentials. The advantage is you might be able to get a better overall price and or lower closing costs, but that is why you should talk to a couple different banks or mortgage brokers. Also if you are right on the edge as far as your credit score, don't let each bank check your credit because you will get a ding and possible lower score at the end of the day with too many inquiries.

If your husband is planning to make a career in the military, plan on being a long distance landlord. Make sure you work property management in to all your purchase and hold deals. Second, use the BRRR strategy with a combination of the House Hack. Use your VA loan to purchase a house (I would do a multi-family). You still want to find a good deal this is still an investment (long term?). Rehab it, Rent it, Refinance to get your VA certificate back. REPEAT. Try to keep the house payment to where an E-6 can cover it with their VHA.

I spent 21 years in the military (retired 2010) and regret letting my wife talk me out of buying a property at every station. First got the bug in 92' with the NO MONEY DOWN infomercials. At my ten year mark I purchased an didn't ask her. She came around on Home ownership. It took another ten to get her to investing. Enough about me. Third, get a government job. You may have to take a pay cut at first. But as you travel with your husband you can transfer and not lose seniority and pay each time you PCS. If he retires at 20 (and I do recommend it, best cash flow in the world even beats real estate) you won't be far behind.

@Amanda Arredondo , you should definitely finance but make sure you don't over-leverage. Do you have reserves? Have at least three months of vacancy money set aside and 5 to 10k for CapEx expenses. However, no CAPEX should take you by surprise.

If you are going to live in the home for a year start using the 3.5% FHA loans. Four for you and four for your husband. The VA loan would be great to use on a duplex, triplex, or fourplex. Good luck to you!