Honolulu, HI · Member since 2019 · 3 posts · 3 votes
Hello everyone, I am currently active duty military (USMC). I have 3 1/2years left on my active contract. I was really interested in real estate before I had joined. I’ve heard of other active duty members buying properties at each duty station, and then renting them out. I thought it was a good idea. That was until I got stationed in Honolulu, Hawaii. Everything is really expensive here. However, I don’t want to be stagnant for 3 1/2 years, but I also don’t want to bite off more than I can chew. I can easily save $1500 per month, just to be safe we’ll say $1000. I have $4000 in that real estate savings account as of right now. My question is, should I think about investing out of state with the position that I am in? (I’m originally from Lincoln, Nebraska) Or should I try and make something happen here in Honolulu?
Rental Property Investor · Santa Rosa Beach, FL · Member since 2018 · 182 posts · 63 votes
7y
@Ronald BredemeierThank you for your service, brother. I wish I had only realized the powerful tools there were available to me as a service member earlier in my career.
First, don't discount HI immediately Yes, it is a tough market, but you have some advantages including this forum. Military members can utilize the VA loan which is as little as 0% down and something around 3.6% interest. Plus, you can put your BAH to the monthly mortgage instead of tossing it away in rent.
However, you are right in one aspect. You don't want to bight off more than you can handle. ...but, instead of going smaller, maybe you should consider going bigger. Anything up to 4-units still qualifies for a traditional mortgage including a VA loan. House hack a quad by living in one unit, rent out the other three, and let your tenants pay off your mortgage. It is without a doubt the easiest way to get into a market like Hawaii's.
VA loan + BAH + house hack = a pretty sure footing for the remaining time you have on station. during that time you can find a solid property manager to take care of things once you get reassigned back to CONUS.
Rental Property Investor · Santa Rosa Beach, FL · Member since 2018 · 182 posts · 63 votes
7y
@Ronald BredemeierThank you for your service, brother. I wish I had only realized the powerful tools there were available to me as a service member earlier in my career.
First, don't discount HI immediately Yes, it is a tough market, but you have some advantages including this forum. Military members can utilize the VA loan which is as little as 0% down and something around 3.6% interest. Plus, you can put your BAH to the monthly mortgage instead of tossing it away in rent.
However, you are right in one aspect. You don't want to bight off more than you can handle. ...but, instead of going smaller, maybe you should consider going bigger. Anything up to 4-units still qualifies for a traditional mortgage including a VA loan. House hack a quad by living in one unit, rent out the other three, and let your tenants pay off your mortgage. It is without a doubt the easiest way to get into a market like Hawaii's.
VA loan + BAH + house hack = a pretty sure footing for the remaining time you have on station. during that time you can find a solid property manager to take care of things once you get reassigned back to CONUS.
Real Estate Agent · Honolulu, HI · Member since 2015 · 450 posts · 196 votes
7y
@Ronald Bredemeier I agree that a VA house hack might be your best bet, since you should be able to live for free if you have at least 3 units. The other alternative would be a live-in-flip--buy a SFH that would pass VA inspection, but needs updating. During the time that you live there, you could update it, and then sell when you leave.
Investor · Parker, CO · Member since 2016 · 550 posts · 389 votes
7y
@Ronald Bredemeier Live where you want to live (or in this case forced to live because your in the military), and invest where the numbers make sense. Don't invest in Honolulu because the numbers don't make sense there. Invest out of state where you can get a better return on your money. If you have connections in Lincoln, Nebraska that would be the first place I would look. Otherwise, look for a team somewhere that you can trust.
Real Estate Agent · Salt Lake City, UT · Member since 2014 · 473 posts · 230 votes
7y
@Ronald Bredemeier Semper Fi to a fellow Marine. I agree that house hacking a small multi in Hawaii could still make sense. That VA loan with 0% down and no PMI is extremely valuable for getting started. I would make that priority #1, and then only look out of state once you have house hacked your first place or figured out it isn't viable.
Honolulu, HI · Member since 2019 · 3 posts · 3 votes
7y
@Aaron Hale I don't believe I get BAH yet. I've only been in the marine corps 6 months. I'm an E-2 and I pretty sure I have to be E-5 to rate BAH or be married (my mother would kill me if I got married just to get BAH) As far as the VA loan I just hit the 181 day active duty requirement yesterday, so I can definitely go that route. I need to speak to professionals to see what I'll be able to afford. Have you worked with a user of the VA loan here in Honolulu? @Duc Ong
Waikoloa, HI · Member since 2017 · 19 posts · 4 votes
7y
@Ronald Bredemeier check out @David Pere he’s a marine currently stationed on Oahu that is very active in real estate investing. Search for “From Military to Millionaire” on Facebook or google. He has a wealth of knowledge especially for investing while active duty.
@Ronald Bredemeier I host a monthly event (my last one before PCS is on May 7 --> check the events tab) would love to see you out there and help answer some questions. In the meantime, perhaps we can find some time to grab a coffee or something so I can help you out.
@Stuart Grazier is right...that is why my rentals are out of state. It can work on Oahu, but it isn't easy. Without BAH I would ABSOLUTELY NOT buy a property in Oahu, it won't make sense at all. That said, there are still great ways to invest here...wholesale, flip, etc. Or you can use this time to invest in the mainland, and/or build capital. Either way, I would love to chat brother! Semper Fi
Lender · St. Louis, MO · Member since 2019 · 45 posts · 27 votes
7y
@Ronald Bredemeier I was in the Army from 2003-2011 and mobilized twice during that time. The VA loan is one of the best for house hacking! On a 1-4 unit, you can finance 100% of the lesser of sales price or VA Reasonable Value. In Hawaii, the max loan amount is $726,525. This looks like it could be a good deal for you for sure.
I don't believe I get BAH yet. I've only been in the marine corps 6 months. I'm an E-2 and I pretty sure I have to be E-5 to rate BAH or be married (my mother would kill me if I got married just to get BAH) As far as the VA loan I just hit the 181 day active duty requirement yesterday, so I can definitely go that route. I need to speak to professionals to see what I'll be able to afford. Have you worked with a user of the VA loan here in Honolulu
If you are authorized to live off-post, you should be receiving BAH. however, BAH is not as important as the authorization to live off-post itself. In order to qualify for the VA loan, you must be a primary resident of the dwelling. As an E2 you may have to request for special permission from your CO.
...and definitely do NOT get married just to earn the BAH! Those kinds of arrangements COST you so much more in the long run than any benefits you may make. Besides, your mother killing you would negate any of your REI efforts.
Real Estate Agent · Honolulu, HI · Member since 2015 · 450 posts · 196 votes
7y
@Ronald Bredemeier
Yes, I have done several VA deals recently. The first step is to connect with a lender, who would be able to look at your financial situation to see what you can qualify for. I'll PM you.
Investor · Klamath Falls, OR · Member since 2017 · 28 posts · 9 votes
7y
@Ronald Bredemeier Without BAH, I highly recommend you do not even attempt to purchase any RE here. With BAH, I only recommend it to those who like taking well-calculated risks. You can only use your VA loan benefit if you plan to live in the residence (which you will be unable to do being a single E-2, unless you are taking care of a relative who has special needs & get approval from command).
If you truly would like to invest (and stay single), try to negotiate an owner finance deal to potentially fix up & rent out on an affordable residence back home (provided you have trusted family willing to help fix/manage it). Other than that, might be best to trade stocks or find other investments; don't let money sit doing nothing & lose out on inflation.
@Ronald Bredemeier Without BAH, I highly recommend you do not even attempt to purchase any RE here. With BAH, I only recommend it to those who like taking well-calculated risks. You can only use your VA loan benefit if you plan to live in the residence (which you will be unable to do being a single E-2, unless you are taking care of a relative who has special needs & get approval from command).
If you truly would like to invest (and stay single), try to negotiate an owner finance deal to potentially fix up & rent out on an affordable residence back home (provided you have trusted family willing to help fix/manage it). Other than that, might be best to trade stocks or find other investments; don't let money sit doing nothing & lose out on inflation.
This is just what I'd consider doing, personally.
What if you have money to invest into 20% down? Can you do that?