Goals: Can you relate???

17 Replies

Hi Everybody! 

Felt the need to share this with BP. I want any Active-Duty, Reservist, or Veteran to know that with a plan anything can be accomplished! 

Recently leaving the military last June I can understand the need to invest and utilize every single resource the military gives us. My Fiance' and I just bought our home in Las Vegas using our VA Home Loan and let me tell you; piece of cake! We didn't pay anything down and we got a rate of 3.6% which is hard to beat compared to a regular conventional loan. Our plan is to either move to Texas or Georgia in a year and purchase a 4-Plex with one of our VA Home Loan Entitlements since we're both Veterans and plan to live in one unit while we rent out the other three having our tenants pay our mortgage off for us. Then, after the refinance seasoning period is up in a year we'll cash out refinance on our 4-Plex and then use the other VA Home Loan we have and repeat the process in 2 years we will have 8 units, 3 years 16 Units, 4 years 24 Units, 5 years, 50 Units. We're both 26, by the time we're 35 I would like for us to have over 100 Units generating pure cash flow bringing in at least 60-80k/Month becoming financially free in our mid thirties!!!

If anybody can relate to this plan please let me know! I Love talking Real Estate and I Love receiving feedback becoming aware of different people's perspectives. 

R,

Jairmiya 

I'm looking to do something similar, I'm still trying to figure out which state would be the best to invest in. I'm currently in California and real estate prices are extremely high. I was wondering since you didn't put any money down, is the mortgage payment really high? I still haven't used my VA loan and was wondering what the process is like.

@Jairmiya St. Hilaire are you expecting a lot of appreciation? If you don’t get a lot of appreciation you will have a hard time refinancing to conventional after a year, unless you plan on buying the third and so forth with conventional after the both of you use your VA.

Thank you for your service. Good luck!

@Caleb Heimsoth , hey caleb sounds like angreat plan. I can totally relate my wife and are both veterans i’m still actuve and we have already started this path. We have 8 units as it atands and we will be refi our first one to a conventional unit herein a few months and jumping in to another 4plex. Not sure if we are going to cash out refi because there is not much equity in that unit we will have only owned it for 2 years at the time. This plan theortically seems good just wondering if you/we are going to run into issues with lenders once there is a pattern of requesting loans for the same types of units? Have you spoke to anyone about that yet? Ive spoke to a few lenders, one told me no way but i contacted another lender that can def make it happen for at the very least our next unit. Also, with interest rates going up are you concerned at all with all of that leverage? Either way great plan im excited for you guys! 

You're going to need a lot more than 100 units if you plan on taking 60-80K per month in cash flow with the CAP rates being squished as far as they are currently, and only getting worse.

As for the VA loan, yes, great tool for getting in with low money out of pocket (no down payment or PMI but origination fees are high) and a low interest rate. Nothing can beat it. Also, you can do 100% LTV cash out refi on a VA cash out loan. I haven't tried this myself yet but I don't see how it can be a bad thing as long as your tenants pay the note for you...or at least most of it.

@Russell Gronsky I wish I had starting thinking like you at your age. It’s my 40s I plan to retire by :) I always encourage active duty to start investing. If I had know I would own places in Manhattan, Kansas; Columbus, Georgia; and Southern Pines, North Carolina. Good for you man!

@Joett Ocasio The payment for our $300K house came to about $1,800/month after taxes and insurance was tacked on, but get this. We have 3 extra bedrooms since its a 4 bd 2.5 bath and we are going to rent out two of the rooms for $700/door so total money out of our pocket every month is only $400! Still technically not an asset because the money is coming out of our pocket but its a start and its  our first home, we don't plan on staying here for long anyway. Also, don't limit yourself to just Cali's inventory. If you are from Cali I understand its all you know but if you can look at Las Vegas, Florida, Colorado, Texas, or Georgia all have really cheap real estate where you can make some good cash flow. 

@caleb 

@Caleb Heimsoth Yes Caleb thats exactly what were our planning on doing so that we can free up our VA Home Loan Entitlement and use it again on another property. The only problem that we might run into is the fact that rates are rising and prices are peaking which means that we might not be able to even refinance if the house doesn't appreciate enough, it would be worth it after closing costs we'd have nothing left to invest! lol

@Ryan

Yes I do think about what would happen if the market peaked, interest rates continued to rise and I wouldn't be able to cash out refi but oh well, at least I still have an asset that I can rent out and have my mortgage paid down and then in another 2-3 years I will start to take advantage of the decreasing rate and appreciation. This is why most of my money will be made when I first buy the property at the right price in order to protect my downside when the market turns for the worst. 

@Jairmiya St. Hilaire that’s not bad at all, specially since you didn’t have to put anything down. I’m actually from Puerto Rico , I was stationed in Cali and decided to stay  but then the housing prices started to sky rocket., so it made start looking else where for real estate investments.  I’ve been interested in Florida and Chicago , Texas sounds interesting as well.

@Russell Gronsky You make a very valid point, but as you may know the cap rates all depends on what class type of property you're buying to the location you're buying it in. Will I purchase a property that has  12% cap rate but on;y 60-70% occupancy hell no! but will over pay for a slow and steady investment in a A Class neighborhood that has 95-100% occupancy every month, no I wouldn't buy that either. I'm extremely strict and only look to invest my money in a building that has decent cap rate maybe 6-8% with an occupancy rate of 80-90% but where there is still room to add some type of force appreciation to the building, typically a C Class investment. 

You can always negotiate an origination fee as well. 

The 100+ Units I own will be diversified some profiting a lot more than others., but you are absolutely right I will need to almost multiply that number of units by 10x if I expect to receive the type of Cash Flow I need to deemed successful in my books. 

@Jared Viernes Thanks bud! I'v been hearing that a lot, I would like to be as successful as all the people in the books I've read and I've come to realize that once you develop a rhythm for investing in real estate there's literally nothing holding you back from reaching financial freedom. 

@Joett Ocasio I know that's the name of the game in Cali no matter where you go in that state its super expensive! I'm from Florida there is tons of opportunity there and its good for business owners when you retire regarding taxes given the fact that there aren't any state taxes and the homestead exemption is literally limitless if the estate is under 1 acre. Texas has a lot of opportunity but be careful when you buy, I hear that you can get in trouble as an investor in the event you buy too high because Texas' appreciate rate is one of the lowest in the country due to the fact that there is so much land there's excess supply and little demand even in today's market!  

Originally posted by @Jairmiya St. Hilaire :

Hi Everybody! 

Felt the need to share this with BP. I want any Active-Duty, Reservist, or Veteran to know that with a plan anything can be accomplished! 

Recently leaving the military last June I can understand the need to invest and utilize every single resource the military gives us. My Fiance' and I just bought our home in Las Vegas using our VA Home Loan and let me tell you; piece of cake! We didn't pay anything down and we got a rate of 3.6% which is hard to beat compared to a regular conventional loan. Our plan is to either move to Texas or Georgia in a year and purchase a 4-Plex with one of our VA Home Loan Entitlements since we're both Veterans and plan to live in one unit while we rent out the other three having our tenants pay our mortgage off for us. Then, after the refinance seasoning period is up in a year we'll cash out refinance on our 4-Plex and then use the other VA Home Loan we have and repeat the process in 2 years we will have 8 units, 3 years 16 Units, 4 years 24 Units, 5 years, 50 Units. We're both 26, by the time we're 35 I would like for us to have over 100 Units generating pure cash flow bringing in at least 60-80k/Month becoming financially free in our mid thirties!!!

If anybody can relate to this plan please let me know! I Love talking Real Estate and I Love receiving feedback becoming aware of different people's perspectives. 

R,

Jairmiya 

 Hi Jairmiya, 

Have you looked into areas in the midwest to get the kind of returns and unit counts you mentioned in your post?  Columbus, Ohio is experiencing tremendous growth and there are really good investment opportunities available all over Ohio.  Good luck with everything! 

Robert,

Not yet, but I'll tell you what I just got off the phone with one of my close buddys that practices real estate in Florida and he is open to doing a joint venture on an apartment building in Ohio. If you know of any off market deals let me know and you have my word that we will use you as our agent if you practice commercial real estate. If you aren't licensed in commercial we can still kick you back a finders fee of 1% of the Purchase price. Let me know. 

Criteria is as follows: 

Apartment building

10-50 Units

C-Class Neightborhood

400K-600K

Occupancy of at least 70% or higher 

Current Cap Rate of 6-10% 

Room for Rent Bump up

Room for forced appreciation. 

OWNER MUST HAVE AT LEAST 30-40% EQUITY IN PROPERTY!

Jairmiya 

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