Newbie from Chattanooga, TN / Curretnly living in SoCal

12 Replies

Hello everyone,

My name is Chris Porter. I'm a very motivated newbie. Currently living in Southern California interested in creating a portfolio back home in Chattanooga, TN. My intent is have a solid real estate foundation in place by the time I get out of the Marine Corps in mid 2019. This will include both rental properties and Fix n' Flip properties. I will be pursing this a full time endeavor.

Currently I have no personal real estate experience, however, I am reading every book/blog I can find and very actively seeking as much knowledge as I can through other's experiences.

A little info on my current situation and a request for some guidance from those of you who can offer a little direction for starting out here...

I'm 25 years old and I'm an officer in the Marine Corps. I'll be deploying soon and once I return I will have ONE year left on contract here in Southern California. Upon return form this deployment I will be debt free and have significant capital to dive head first in my first investment. my goal during this final year on contract will be to establish as much of a real estate investing foundation as I can in order to enable full time attention once I separate from the Marine Corps.

I would like to gage your opinions on how best to dive into this world of real estate investing upon my return from deployment.

I'll have anywhere from 30-40k in capital devoted to starting this endeavor. Based on your experience, would you recommend starting out with a rental property and using that capital for down payment and having the rest in reserve for a strong cash position? or would you recommend pursing a Fix n' Flip property? I want to be aggressive about this.

I also intend to purchase a home here in CA with my VA loan after deployment. Once I return home after my separation I would like to maintain the property and rent it out.

Sorry for the novel! I'm just very eager and excited to get started on this next chapter in my life.

I'm very happy to have stumbled upon this website and I look forward to being apart of the community here!

Chris

@Chris Porter -- Welcome to BiggerPockets. I'm a former U.S. Marine Infantry Officer living in San Clemente, CA. I'm currently building up an out-of-state portfolio in New Jersey (my old stomping grounds), so I'm familiar with where you are and where you're about to go.

Without responding with a novel, I'm attacking the BRRRR strategy for my properties. I can't speak for Chattanooga, but I've been able to find some "D+ to C-" properties in NJ that I've been able to purchase in "B to B+" areas and improve them for instant equity. I'll be able to refinance within 6-8 months to pull out the cash that I put in. (I'm sure you know of the technique.) So to answer your question: My vote is go for the rental property. Hold it for equity, cash flow, and tax benefits.

Have you been on deployment before? If so, you know there are a lot of ways to financially capitalize on the time you're away. If not, send me a PM and we can discuss.

Best of luck to you.

Semper Fi.

@James Letchford - I'm looking into BRRRR strategy myself. I have a few questions regarding this strategy.

  1. Do you hold the property under your name or LLC before the refi?
  2. Do you hold the property under your name or LLC after the refi?
  3. Why wait 6-8 mo....Does your lender require this seasoning period?
  4. Have you ever been denied a refi on your property after reno, if so why?

@Michael Ramos -- First off, thanks for the vote.

Full disclosure:  I'm in the middle of my first BRRRR project and about to start my second.

With that said, here some answers to your questions:

  1. Although I do have an LLC, the property is not currently owned under its name. It was difficult to get traditional financing (I used a HomeStyle loan for this property) under the LLC.
  2. I do plan on putting the property under the name of my LLC at the refi. I'm hoping to work with a portfolio lender that will allow me a little more flexibility on doing so.
  3. There is a seasoning period. I need to make a minimum of six mortgage payments before being able to refinance.
  4. Like I mentioned above, I haven't refinanced yet, but feel pretty confident that I will be able to. I have an appraisal that gives me ~$65k in equity, so more than enough LTV for the refi.

I can keep you posted on how it goes, but here is my major takeaway so far (and this isn't hard advice to find if you're on BP):

  • Buy Right: I'm making my money on the purchase I made. Because I was able to get a "C-" property in a "B to B+" area at 50% of ARV, I'm sitting pretty for the third "R" in BRRRR.

First off, sorry to "troll" on your post @Chris Porter . Shame on me for doing that. But welcome to BP! I'm on a learning path as well. I was leaning towards flipping initiallly as well but realized I wanted to be a bit more semi-passive based with my approach considering my situation. In my opinion, the more you act the more you start to find clear paths based on your goals and situation. 

@James Letchford - thanks for the clear responses and advice! That all makes perfect sense. I also came across a delayed financing method which may not require seasoning period but I believe you need all cash for purchase and rehab based on my initial research. There are some other restrictions as well. And yes, please keep me posted on how it works out for you. I'll send you a PM. 

@Chris Porter  First of all thanks for your service. Welcome to BP. There is a location where like minded investors gather in Lake Forest, California every month that you should check out.

If you would like to chat before then and talk about investing let me know. I am in Mission Viejo and can get together at my local Starbucks. Your ALL in cost is only a cup of coffee.

I am currently flipping homes in Orange County and teach others how to do so as well. I started a wholesaling group and spend my Saturday mornings with them.

I am looking for my next purchase at the court house steps, while I am working on a few more.

Good Investing...

Welcome @Chris Porter and thanks for your service! So to be THAT guy there is no correct answer anyone on here can recommend to you. If you could should you marry Scarlett Johansson or Mila Kunis? While it's an extreme comparison consider it's a topic you may already be able to provide a response to that someone else may try to convince you of the incorrectness of. Point being the right answer is to discover what aspects of real estate investing best suit your skill set, interests, needs, etc. Someone who is buy and hold could tell you it's the right way to go all day long and a flipper could do the same but what if you find you hate the work that dealing with contractors on a flip brings or the dealing with tenants that buy and hold brings? You have to determine what piques YOUR interest and proceed in that direction. If you are unsure of that answer don't worry you're hardly alone! Keep reading, keep searching, maybe even make a mistake in trial and error, but don't let someone else tell you what best suits you.

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