Advice and strategies

[Tre Davis]

Hello, 

I am new here, and looking for advice and ways forward. 

I want to first start by saying I am a veteran with full benefits & 50k cash on hand. 

In 2023 I bought a new construction 3bed 2 bath in the best city around the best schools.  There is a mortgage on the house with double payments being made. 

I originally planned in 2026 to rent this house out, then buying another nearly identical house in the same neighborhood (which is still under construction). Rinse and repeat.

I was advised this may not be the optimal choice renting out new builds that aren't paid in full. 

I am looking for advice and strategies to have my money work for me. Any advice and ideas would be appreciated. I can also answer anymore questions if any details are needed. Thanks 

[Melissa Justice]

@Tre Davis,

Thank you for your service - my husband is also a Marine Corps veteran! It’s great that you’re thinking ahead about building wealth and making your money work for you. You’ve already made an impressive move by buying your home, and now you’re in a strong position to grow your portfolio.

Here's my take on your current strategy and some suggestions moving forward:
New Construction vs. Buying Existing Homes
New construction homes are often less ideal for rental properties when you still have a mortgage on them-mainly because:
Appreciation potential is slower compared to homes that have already been rented.
Rental yields might not be as high as older properties with similar square footage but lower purchase prices.
Rent-to-price ratio may not generate enough cash flow unless the mortgage is paid off or nearly paid off.

That being said, new homes are still great assets for long-term appreciation. But for immediate cash flow, you might want to consider existing properties.

Your Strategy Options:
1. Keep your current home and rent it out (in 2026 as planned)
Pros: The home will likely appreciate and you’ll have solid equity by then.
Cons: The mortgage payments are higher, so you’ll have to wait to see significant rental income if the home is still under a mortgage.

2. Consider refinancing and scaling sooner (potentially before 2026)
With $50K in cash, you have a lot of flexibility. Cash-out refinancing could be a great option to tap into your existing equity without selling.

You could use the cash for future investments while keeping your current home as a rental.

3. Look for cash-flowing rental properties
With $50K in cash, you might want to diversify into rental properties that generate immediate cash flow. Focus on markets that are cash-flow positive (outside your current city) and get familiar with turnkey investments-where the property is already renovated, rent-ready, and managed for you.

4. Leverage your VA benefits
You have access to VA loans, which are amazing for house hacking or buying additional properties without a large down payment. Even though your plan is to rent out your current home in 2026, consider using a VA loan to buy a second home now (perhaps in another market) that can be rented out right away.

Next Steps to Consider:
Explore cash-out refis to access equity from your home for future purchases.
Look into turnkey rental properties in solid rental markets (Midwest or Southeast) to get immediate cash flow.
Use your VA benefits for your next property purchase, allowing you to grow your portfolio with little money down.

You’re in a great spot to scale fast-just be strategic about leveraging your cash and existing assets to avoid being “house poor” while you build your portfolio. Let me know if you want to chat more about specific markets or dive deeper into any of these options - always here to help!

Best of luck!