Active Military trying to grow SFH portfolio

Nashville, Tennessee
New Member Introductions
2yFollow

Active Military trying to grow SFH portfolio

Jeff Love
Investor · Member since 2021 · 6 posts · 6 votes

Hey all, 

This is an introductory post. I'm Jeff, active military, as well as a husband and father. I'm looking to expand my SFH and Scale my portfolio throughout the remainder of my career to reach financial independence and to create some level of generational wealth for my children. Currently I only have 1 rental.

My goals for 2024 are to continue my education, and hire a CPA as I consider new ventures. I will accumulate rentals across the country as I progress which I could foresee being a little more challenging as I have to build new networks in each region.

I am Interested in networking with other military investors as well as reading the expertise from other long standing members within the group. 

3Reply
20 views

Most Popular Reply

Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y

Your best bet is your own housing and using your Base Housing allowance.  Also use the tax free sales if 2 out of 5 years primary residence.  

US government pays for your house and the gains $250,000 single or $500,000 married.  

Even if you sale for a loss you can make money.

Keep scaling.

Example.  All depends on your family, base and your needs

Single or just married.  BAH say $15,000 per year.  Buy a trailer with the lot.  Clean up.  Landscape. Add a carport.   Or do nothing.  

Live there 2 years and sell for the same price or more.  You make $30,000 tax free.  No other investment will get you that with less risk.

Now start to scale.  Look for either the worst house in a great neighborhood, school district, resort area, etc.  Again do BAH.  Fix it up.  Sale for same price or more.  Sale with no taxes.  

Try to either get your RE license or sale thru an attorney to save on commissions.  We use Realtors always but I wouldn’t do on quick sales.

Once you have a big enough cash snowball, then either pick an area for permanent investments where you don’t use your BAH.

Then start all over with your BAH.  Another play is look for a property that has extra land you can subdivide and sale.  

Key is to use your BAH to make money but also have a secondary angle making money.  

My brother just made an offer in Italy.  He will make $150,000 using his BAH for the time he is there even if he sales for the purchase price.  But he bought a house with two full living quarters on two floors.  He can also make an additional $15,000 per year or more if he rents during the tourist season.  This is also a value add property and he will make money on the sale.

He did the trailer house step and got his $30,000 cash snowball to get him started.  You can always buy a second trailer if you max out and pay the first one off.   Depends on your family.  

Lots easier to manage the tenants, you, in the above scenarios.

2Reply
See this reply in the discussion

13 Replies

Jump to latestLatest
  • Axel MeierhoeferPro Member
    Rental Property Investor · Escondido, CA · Member since 2017 · 679 posts · 550 votes
    2y

    @Jeff Love Hi Jeff

    I am retired Air Foce (22 years, last assignment Holloman AFB). I have developed a small tribe of people who are investing with me and use my mentoring for support.

    I hope you have a bunch of years left and would love to encourage you to use your VA loan eligibility to get properties while in service. In addition, funds allowing, I can help you with turnkey properties in a clustering approach so you have a great portfolio to reach the goals you described. If you re close to PCS, please act with urgency as you want to use your advantages as much as possible.

    If you like my help, please DM me and we can arrange for a conversation.

    Be well

    Axel

    2Reply
  • Nate MeekerBusiness Member
    Real Estate CPA | California · Member since 2020 · 543 posts · 251 votes
    2y

    @Jeff Love one of the best decisions you will ever make! Make sure your tax pro is familiar with active duty military tax rules. 

    The CPA Realtor 569 Reviews
    WebsiteView Page
    1Reply
  • Hamp Lee IIIPro Member
    Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
    2y

    I'm active duty Air Force and maxed my VA loan benefit with three properties. This is a great way to get started.

    I wish you all the best.

    2Reply
  • Axel MeierhoeferPro Member
    Rental Property Investor · Escondido, CA · Member since 2017 · 679 posts · 550 votes
    2y
    Quote from @Hamp Lee III:

    I'm active duty Air Force and maxed my VA loan benefit with three properties. This is a great way to get started.

    I wish you all the best.


     Depending on how long yu have been investing, you might be able to free up at least one

    0Reply
  • Dj Hume
    Rental Property Investor · Cincinnati, OH · Member since 2019 · 55 posts · 49 votes
    2y

    Welcome to the group @Jeff Love!

    I’m located in Cincinnati, OH. I’ve been investing for 9 years now, started when I was 22.

    I started in Single Family Homes and House Hacking! If you are willing to make some short term sacrifices, I recommend this type of strategy. Low risk and high reward!

    Looking forward to being connected and helping one another!

    1Reply
  • Hamp Lee IIIPro Member
    Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
    2y
    Quote from @Axel Meierhoefer:
    Quote from @Hamp Lee III:

    I'm active duty Air Force and maxed my VA loan benefit with three properties. This is a great way to get started.

    I wish you all the best.


     Depending on how long yu have been investing, you might be able to free up at least one


     The oldest purchase is seven years ago. I’ll retire next year and will stay in my current home. I’ll probably consider it in a few years if I move again.

    0Reply
  • Jasmine Vida
    Investor · Jacksonville, FL · Member since 2019 · 90 posts · 41 votes
    2y
    Quote from @Hamp Lee III:

    I'm active duty Air Force and maxed my VA loan benefit with three properties. This is a great way to get started.

    I wish you all the best.


    Do you move every year and convert your loan? Or do you sell? I've heard you can use the VA loan multiple times, but I'm curious on the steps to do this.

    0Reply
  • Hamp Lee IIIPro Member
    Real Estate Agent · San Antonio, TX · Member since 2019 · 1k+ posts · 832 votes
    2y
    Quote from @Jasmine Vida:
    Quote from @Hamp Lee III:

    I'm active duty Air Force and maxed my VA loan benefit with three properties. This is a great way to get started.

    I wish you all the best.


    Do you move every year and convert your loan? Or do you sell? I've heard you can use the VA loan multiple times, but I'm curious on the steps to do this.


    Two of the VA loans are in the same city. I bought a house with my VA loan during my separation and my ex-wife left the original house and moved to another state. The third house was when I moved to another state a few years later.

    If you remain in the same city, many lenders will require a qualifying event such as marriage, divorce, up-sizing/downsizing, etc. Not all will ask this. My lender didn’t ask me for a qualifying event for my second loan though.

    All of the loans are still VA loans. The first house was converted to a VA loan rental property because I needed to remove my ex-wife's name from the deed and I was already out of the house with no intention to move back in.

    All of the homes were within my loan limits. I’m maxed out now unless I try to purchase a multifamily.

    I hope this helps.

    0Reply
  • Jeff Love
    OP
    Investor · Member since 2021 · 6 posts · 6 votes
    2y
    Quote from @Hamp Lee III:

    maxed my VA loan benefit with three properties. This is a great way to get started

    I currently have one rental under my VA entitlements which is in TN (plenty of entitlement left). I’ll be looking to use VA on the next. I’m looking to turn primary residences into rentals as I move around, but am still interested in finding deals that I could get without using VA loan. It would be nice to have a couple properties in the same area of TN As my first. 
    0Reply
  • Axel MeierhoeferPro Member
    Rental Property Investor · Escondido, CA · Member since 2017 · 679 posts · 550 votes
    2y
    Quote from @Jasmine Vida:
    Quote from @Hamp Lee III:

    I'm active duty Air Force and maxed my VA loan benefit with three properties. This is a great way to get started.

    I wish you all the best.


    Do you move every year and convert your loan? Or do you sell? I've heard you can use the VA loan multiple times, but I'm curious on the steps to do this.

    I am not an expert but can respond based on what I was able to do when I was eligible as a military officer and what VA official sources provide.

    When you say "use that VA loan multiple times", it is different than having and paying for multiple VA loans simultaneously.

    Fundamentally, if you were a career military member, joining at 19 years old and staying till you're 60 and get transferred from duty station to duty station (PCS) or in some cases even after retirement, you can apply for a new VA loan each time. If you have a VA loan at your current station and you move to your new station you can apply and end up having two loans.
    So, depending on how often you are transferred and remain eligible you could have used VA loans 20+ times in your life.

    There are even circumstances where you could have three loans simultaneously. There are a few issues to consider as you can't have an unlimited amount of money as VA loans, so that creates a limit. Also, the program is not in place to allow you to get an investment portfolio with no down payment using VA loans.

    When interest rates are relatively low as they used to be between 2018 - 2021, you could get a VA loan for your residence, get PCS'd, keep the loan, rent out the house, get a new loan at the new station and if you get PCS'd again a few years later, you would refi the original first loan, unless you still had enough eligibility versus the maximum loan amount the VA is giving. So in certain circumstances you could have a total of three loans. By that time, typically about 3 years after you started renting the property with your first loan, you should have been able to increase the value of the property and pay down some of the loan so a traditional loan with 20% down and 80% financed would work.

    These days this is much harder because a VA loan you received say in 2019 with 3% interest would refi now to an investment loan with 8% interest. What might still work is the value increase. A lot of properties have increased by 50% in value and rents have gone up a bunch as well, so the math might still work but it has gotten harder to retain these properties.

    What you could do is to sell the original property and take the equity to buy an investment property in a well-performing market. That's what I ended up doing. The places I bought using the equity were not where I was stationed and I did not get VA loans (obviously) but the program helped a lot to get started.

    I know this is all a bit complex to describe in a post, so if you like to chat about it, send a DM. Happy to provide what I learned.

    0Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    2y

    Your best bet is your own housing and using your Base Housing allowance.  Also use the tax free sales if 2 out of 5 years primary residence.  

    US government pays for your house and the gains $250,000 single or $500,000 married.  

    Even if you sale for a loss you can make money.

    Keep scaling.

    Example.  All depends on your family, base and your needs

    Single or just married.  BAH say $15,000 per year.  Buy a trailer with the lot.  Clean up.  Landscape. Add a carport.   Or do nothing.  

    Live there 2 years and sell for the same price or more.  You make $30,000 tax free.  No other investment will get you that with less risk.

    Now start to scale.  Look for either the worst house in a great neighborhood, school district, resort area, etc.  Again do BAH.  Fix it up.  Sale for same price or more.  Sale with no taxes.  

    Try to either get your RE license or sale thru an attorney to save on commissions.  We use Realtors always but I wouldn’t do on quick sales.

    Once you have a big enough cash snowball, then either pick an area for permanent investments where you don’t use your BAH.

    Then start all over with your BAH.  Another play is look for a property that has extra land you can subdivide and sale.  

    Key is to use your BAH to make money but also have a secondary angle making money.  

    My brother just made an offer in Italy.  He will make $150,000 using his BAH for the time he is there even if he sales for the purchase price.  But he bought a house with two full living quarters on two floors.  He can also make an additional $15,000 per year or more if he rents during the tourist season.  This is also a value add property and he will make money on the sale.

    He did the trailer house step and got his $30,000 cash snowball to get him started.  You can always buy a second trailer if you max out and pay the first one off.   Depends on your family.  

    Lots easier to manage the tenants, you, in the above scenarios.

    2Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    2y
    Quote from @Jeff Love:

    Hey all, 

    This is an introductory post. I'm Jeff, active military, as well as a husband and father. I'm looking to expand my SFH and Scale my portfolio throughout the remainder of my career to reach financial independence and to create some level of generational wealth for my children. Currently I only have 1 rental.

    My goals for 2024 are to continue my education, and hire a CPA as I consider new ventures. I will accumulate rentals across the country as I progress which I could foresee being a little more challenging as I have to build new networks in each region.

    I am Interested in networking with other military investors as well as reading the expertise from other long standing members within the group. 


     Welcome to the forum. I've never been in the military but my partner worked for a Defense Contractor for 20+ years and many of his bosses were ex-military. He told me a story of his favorite boss who purchased a home everywhere he was stationed and he never sold them.  By the time he retired from the military he had a nice portfolio.  

    What you'll have to prepare for as you build your portfolio- Learning how to manage them from afar. Build the systems required to manage a spread-out portfolio now. Don't wait until the portfolio is in place.

    312-681-7487
    0Reply
  • John WilliamsBusiness Member
    Property Manager · Clarksville, TN · Member since 2018 · 443 posts · 210 votes
    2y

    Hey Jeff, I am property manager and real estate broker up here in Clarksville, TN. I have similar goals and I am a Veteran as well! Thank you for your service. Let me know if I can help in any way!

    [email protected]931-272-3065
    Rent My Home - Property Management4.8207 Reviews
    WebsiteView Page
    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free