Financial preparations for buying real estate
My EAS date is January of 2026.
How can I financially prepare myself for buying a first rental property?
How can I properly utilize the VA loan?
What general advice can you give an active duty military member on investing in real estate?
Hey, @Scott P Tumbleson!
My EAS was actually yesterday believe it or not. I began investing in 2020. I have used my VA loan and have since turned it into a rental. Although you will not have to put any money towards a down payment (some exceptions apply), lenders will still want to see a decent LTV ratio, reserves in place, a steady job, etc. So, with those in mind, make sure that you are making your financial picture look as good as possible so that you have the best possible chance of securing a VA loan (extremely powerful tool).
As for investing while active duty, it is very much possible and countless servicemembers amass good-sized portfolios while in. Some get out early, and some just continue doing it while they're in. Have a plan to budget for time, and get to know your market and establish relationships to build a team. It took me a couple years at my duty station to find the right people get them on board, and now execute managing the properties while I am not there anymore.
If you ever want to discuss more in detail, I am happy to help.
REALTOR® CalDRE: 02221003 | CA Bar: 322013
Hey Scott! Starting your real estate portfolio while you're still in is so so so smart! You can use your current income to qualify for an owner occupied purchase (to live in) now and can make that property a rental when you PSC. If you don't want to buy an owner occupied place now, you can buy an investment property now and use your VA eligibility to buy you owner occupied property after your EAS, wherever you go. There are a lot of good options to purchase in Virginia! I am a Lender. I am happy to hash out the options with you so you can make the best financial decisions for your goals. Just let me know.
@Scott P Tumbleson Welcome to BP! Fellow military guy here (active duty Navy).
To financially prepare for your first rental property:
1. Get your credit score up to above 700
2. Spend less than you earn
3. Have money saved up in reserves for AFTER you close. You need to be ready for big ticket repairs/expenses like roof, HVAC, etc. The amount will depend on the condition and age of the home, and a few other factors.
4. Get your spouse on board if you're married
5. Pay off 'bad' consumer debt like credit cards, personal loans, etc. Your debt to income ratio will be a key factor lenders look at when you need to get financing.
To propertly utilize the VA loan:
1. Educate yourself! You're already doing it by being on the forums. Do a search for VA loan and you'll find tons of great info.
2. Connect with others that have purchased a rental with a VA loan (like myself)
3. Chat with VA loan experts like @Erik Browning so you can understand the VA loan and your entitlement as best you can
4. House hack!! This is the best strategy out there, and doing it with a VA loan is super powerful.
5. Go to local real estate meetups
Good luck and let me know if I can help with anything.
Active Duty here as well. If you currently own a house with the VA, you can purchase a second one under the same VA entitlement (research VA entitlement for second property). Turn your first one into a rental and buy a duplex to house hack. Just a suggestion, but this would be an amazing start!