Good day everybody, as my title suggest I’m A active Duty service member and I am looking to start my journey to financial freedom by diversifying my income within real estate options. I am completely just beginning at this, so any info will help much. Anyone have ideas?
@Ladarius Peterson first of all thanks for your service. I grew up near the Great Lakes area in Illinois, and still do a lot of business with friends in that area.
Most of my friends that are in the military run across the idea of using VA loans to purchase homes to live in with the intention of renting them out. I would tell you, like I tell all of them, to start with the end in mind. Pick a location where you want your portfolio to be, and begin purchasing in that location. Maybe you have a duty station where family lives or something that would be an ideal place to invest. You will need "boots on the ground" when you are deployed.
The people who get burned in my experience are the ones who are purchasing houses at every duty station. Your portfolio is too spread out to be managed effectively.
Yes I couldn’t agree more, the Home I purchased with my VA loan is in a great upcoming developing neighborhood. I’m now looking into another home to turn into a rental property , just not sure where to start
@Ladarius Peterson In my opinion the best way to start is to find someone who has been doing it for a while and see if there are any partnership opportunities. Not only will you learn more by doing, you'll have someone there to mentor you through the process. Find someone who is doing what you want to be doing and latch on. If you can add value to their business in some way (i.e money, time, effort, contacts, etc), they will happily bring you on and show you the ropes.
@Stuart Grazier thanks. I am looking for a mentor, I just do not know where to start. It’s so many “real estate mentoring” programs and individuals it’s hard to actual find someone on a personal note to latch too.
@Ladarius Peterson , I think this mentoring thing is oversold right now. Find a mentor, build a team, etc, etc. You see posts on here all the time about people looking for a mentor or looking to build a team to get started, but that is backwards in the vast majority of cases. Get started and you come across people that you will want on your team or that will turn into a mentor.
Check out TRIG. I was going to that meetup when I was stationed down there and it was good. Network with other people in the business, or just be around them. See and hear what other real estate investors are doing. And start doing some deals. The rest of it will come.
Exactly my point. I feel like everyone now a days are mentoring just to add income to theirself not really to think anyone else methods . What is TRIG if you don’t mind me asking
Tidewater Real Estate Investing Group. There are several REIAs in the area, but that is one of the oldest and largest. They bring in national speakers twice a year that have something to pitch, but mostly it is just good information and networking. Like most groups there a ton of people that will never do a deal, but there are plenty of heavy hitters their as well.
I'm not opposed to paying for coaching or mentoring, but I think you do that to up your game, not get it started. Like Stuart pointed out, you want someone to partner with or work for that will turn into a mentor, not someone that is "mentoring" nationwide because they had a hit TV show. That's what I'm doing here. I have extensive real estate, financial, and life experience, but I found a heavy hitter in my market that is letting me work some leads for him. It's grunt work and probably won't pay much, but the experience and connections are priceless.
Stu thanks for the mention. Ladarius I had and continue to have great success in the Hampton Roads market. Hit me up with a direct message and we can talk over email, text, and phone if you would like.
@Ladarius Peterson It depends what your end goes is. If you're active duty, you'll have to factor moving again when your tour is up. I'm not sure if you're thinking of wholesaling, rehabbing or buy and hold. You may want to start networking with property management companies so you'll have a few to work with then the time comes. Definitely check out your local real estate investment club. I'm sure you'll meet a few key players and make referrals there. Good luck with your journey!
Hi! I am in the military and have been investing/LLing for 16 Years. I am in the MT National Guard, but have been deployed/stationed all over the US. I invest in my home town (also where the Guard base is), but it just happens to also be a solid stable market. I started with a duplex, and lived in half of it. I’d like to say I did this on purpose, but I sort of stumbled on it. My mom is a lender in the same town, and she encouraged me to do this for multiple reasons. First, I was 21 and uncomfortable spending a lot of money; secondly, it was after 9/11 and I was being sent all over the world ALOT so it didn’t make sense to have an empty house with a mortgage 6 months a year; finally, living next door to my tenants was a great way to get my feet wet as a LL. I highly recommend house hacking if you can do it. Might not work if you have a family, but if you are single...do it!
Over the years, I’ve also purchased at other Duty stations. I am currently doing 1031 exchanges on both of those properties to upgrade and get them into the same market as my other properties. Why? I’ve had terrible luck with PMs, I just happen to live in a solid (although expensive) market, and my husband just earned his real estate license in our market. We will look for other ways to diversify our portfolio where we don’t have to be so hands-on in the future....maybe buy into a syndication??
I am hardly an expert, but let me know if I can help!
@Rachel H. well just real briefly, I plan on having a self sustaining source of income in rental properties to the point where if I wanted to leave active duty I can and be able to manage and Persue other investing full time. I know ultimately that is everyone’s goal. But I want to pretty much have a diverse cash flow income.
@alissaengel did being in the military benefits help you in anyway?
I recommend listening to BiggerPockets Podcast 23, 163 and 268. These are all military personnel and can share some tips/examples in both rehabbing and buy & hold.
Being military myself, and having managed a rental from across the world, I can tell you that it is possible, but will take some planning and proactive thought.
I do think it helped in ways.
1. I made a good income starting at a young age.
2. I completed my degrees using the GI Bill. Most people have student loans, but the GI Bill allowed me to finish school without debt. This has kept my debt to income low.
3. I started contributing to my TSP early. TSP is a great resource, because it's considered cash in the eyes of a lender. It differs from other retirement accounts in this way, because you can easily borrow from it for real estate. You pay an interest rate equal to the G fund (very low). BUT....and this is the best part, you pay the interest back to yourself! There's a lot of info about this on the TSP website.
4. I recently (after 17 Years) used my VA loan. This is not always the best choice, so use it wisely. I experienced the last recession and the only thing that kept me alive was the fact I'd alway put a solid 20% down. Getting 100% funding can be a bad choice in certain instances. Also, the funding fee is actually more expensive than mortgage insurance unless you plan to stay long-term. But overall, it's a good resource if used wisely.
Hello @Alissa Engel , just to clarify what you said, so you can pull money or borrow from your TSP funds and use for whatever you need real estate wise, then pay the interest back into your account again?
@Christopher Rodriguez , you are correct. You borrow money FROM your account. That is an important distinction because you are pulling money out of the market to borrow it. And then your "return" is coming from money that you already made so is not really a return at all. The opportunity cost of this strategy is much higher than people anticipate. It is, however, an option and for the right deal it could totally be worth it. It's just that most people do not fully understand what it is costing them to do it.
Ok ok now I understand a little better, thank you for the clarification !
A question about managing from overseas was posed directly to me, but I will post it here in case it is helpful to someone else.
I own a joint venture condo with another military member in Atlanta. The unit itself was about 6 yrs old, but brand new and had never been sold due to the market crash so we bought it from the builder. Having grown up and gone to college in Atlanta, I am quite familiar with the area. We have rented it for 4 years to college students.
During that time, we both deployed and were away from the unit for over a year, where I was mostly in charge of the management. Some things that helped me to accomplishment:
1. Screening tenants. We screen each tenant ourselves. This included application, background check and an in-person meeting. This gave us an idea of who we were working with. If you can't do an in-person meeting because you are away, then I recommend either finding someone you trust and is a good judge of character to do it, or schedule a video conference.
2. We manage through email and Cozy.co. This makes it easy to collect rent and add additional charges as needed. My tenants are pretty responsive and have been very good accept a few minor hiccups.
3. I used a family member to assist us with any maintenance issues. There weren't many, but when they popped up, the tenants had someone local they could speak to and coordinate with as needed.
4. A bit of luck. Our renters have been college students. Both sets were juniors and continued to rent through their senior year. Overall they have been low maintenance and any issues were able to be solved by communicating via email.
If there are any other specific questions, I'd be more than happy to answer.
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