22 y/o Active Duty, Buy or Rent in Pensacola, FL?

26 Replies

So here's the situation, I'm a 22 year old single male who is about to graduate from the U.S. Coast Guard Academy.  I'll be reporting to flight training located in Pensacola, FL with the Navy following graduation.  I will be located in Florida for about 1 year before having to relocate to Texas for advanced fixed wing training. 

The idea of home ownership appeals to me, and I'm also eager to invest in real estate on the side.  My current plan is to buy a single family home near Pensacola and house-hack to other young people in the area.  I'm curious as to if anyone believes this is feasible?  One of my biggest fears is that I will not be able to successfully rent out my house as I will be living out of state within the year.

Would it be more financially responsible to simply rent until I settle down in one location?

Additionally, I've gotten in contact with a few VA Loan lenders as well as a real estate agent in Florida, in case I decide to buy a house. I've done a few calculations, and the VA Loan seems like a decent idea with the low down payment and no PMI. If I decided to use the VA Loan for this purchase I would put 10% down on approximately a $180,000 house to secure the lowest VA Loan funding fee.

Thank you for taking the time to read this, I appreciate any input

VA loans are fantastic, use them if you qualify!

My opinion is that you really need to find a good property manager for when you go away to watch over your building.  Make sure you allocate money for this in your spreadsheet (10% of gross income).  Are you sure you can house-hack in the amount of time you have?  It would stink to not finish a rehab and have to move!

@Cody Bain ,

You just gotta run the numbers to see if it makes sense. If yo can't buy it now as a good rental with 0%-10% down then I would not count on it working out in a year. It does not make sense to buy at every duty station. For example, I did not buy in Monterrey, CA or Northern VA when I was stationed there. It's better to just rent and wait for when the numbers make more sense. Keep your rent low by renting from someone who did not run the numbers if necessary.

Also, $18k is good chunk of change that you could invest in many places that make sense.  

@Cody Bain . I would suggest you Rent in Pensacola & Corpus Christi (Advanced Flight Training). Your activity level in Flight School will be intense at times, and I would suggest you don't need other distractions from concentrating on perfecting your aviation skills. 

Once you get to a "permanent" location (I put in quotes as no military assignment is permanent) you'll have more time to devote to real estate investing, and more financial acumen to make it happen.

@Cody Bain congrats on your upcoming graduation and your decision to get started investing early.  I actively invest and sell real estate in Pensacola and I think it’s a great town for buy and hold.  I think buying is a solid choice as long as you make some good contacts while your hear, most importantly a good property manager but also try to find a good handyman for service calls, a good cleaner, good yard person, ect.  If I can help you with anything here in Pensacola just let me know!

Cody you can buy here if you find a good house.  Pace is a good rental area for the $180K market, rents can be between 1400-1600 for that type of a place (look at school districts when purchasing as that will facilitate a better long term tenant and higher rent in this market).  Remember make sure the numbers work for the long term.  As long as you realize it is not your forever home, you can make a good purchase.  I would do less down if it works, as the funding fee will be spread out over years and keep the cash in hand for your next purchase.  

Several of my friends have bought houses here during flight school and lived in them as IPs too.  Or just let them be rentals forever!

Biggest thing is, your ONE goal is to kick butt in flight school, not just pass.  

If you can find a good deal then I would buy and rent out the other 2 rooms like you said. I'm sure you will be able to do that, might even find 2 other military people to rent the rooms to. I'd take all the money and either pay down the mortgage all year long or save the money for the next down payment. 

@Cody Bain Flight training sounds like fun lol good for you! I was going to say why not just buy a house. Then I read @Jim Cummings comment. Sounds like he knows what he's talking about and gave great advice. Focusing on flight school for now is probably most beneficial for you now and in the future.

@Cody Bain I think it is a great idea and wish that I would have bought a home and rented out my rooms to roommates when I was in flight school in Pensacola. I wish I would have bought multiple houses when I was there. I didn't start down that path until I moved to San Diego, which was way more expensive!

Look for a house that you can hold as a rental after you leave. Crunch the numbers before you buy and make sure it will cash flow once you put renters in place. Try to find a property that will fall under the 1% rule (Rents = 1% of purchase price). Ensure you include all of the expense calculations when number crunching (property management, vacancies, maintenance, capital expenditures, property taxes, and insurance). I disagree with @Jim Cummings as owning a home will not take away your focus on being successful in flight school. You have to live somewhere so you might as well buy and start building your wealth. And, finding roommates to help pay your mortgage will boost your cash flow that much more.

Talk to @Adam Schroeter and @William Allen about good areas and finding properties. 

Thanks for the mention @Jay Helms  

Hey Cory,

You’re a smart man for taking these steps before you make a huge decision. 

First, thanks for your service! 

Second, I moved to Pensacola about a year ago and I had  similar ideas you are currently having. 

I decided to go with a 203k loan on a 4plex with the intentions of moving into one unit and renting out the others. 

Fast forward a year... that 4plex is rehabbed, fully rented out, and cash flowing $500 per door. 

I am now under contract to purchase a triplex using my VA loan with a tehab component, where will will live in a great home in one of the most desirable neighborhoods around, while renting out the two units in back.

Moral... there are countless opportunities. It’s about your research, diligence and the right people. 

I understand your fear of your units being vacant but if you are in the right location, and you can commit to proving clean, safe, affordable housing, the demand is incredible. 

Good luck and let me know if I can help!

Hey @Cody Bain ! I actually just started primary up in Milton, and I am 22 as well! I purchased a new construction home right in downtown Pensacola a few weeks back with a VA loan and am house hacking. I never thought new construction would work out, but the numbers actually made sense. I have two roommates paying almost my entire mortgage, leaving me to only cover about $100 at the end of the month. It would have been a better investment to purchase something to add value to, but the fast pace of flight school makes it hard to renovate something that you actually have to live in. Also the location is just incredible and we're all super happy about our living situation so it was worth it in my opinion.

I'm currently doing market research on the multifamily market around here and looking to get into at least a duplex within the next 3-6 months. Cap rates tend to hover around 10% here. Let me know when you have some time and maybe we can sit down and talk about things!

Just make sure you're partner up with a realtor that understand cash flow. If not, they're just taking you to over priced deals and they're not sure how to analyze it. 

Also, have a metric when it comes to your cash flow metric. For example, mine $150 a door for net profit. This is how I analyzed my duplex before I bought it on VA.

If you're really want to get into the house hacking direction, I would prioritize multi family and then single family if you can't find anything. You're buying more than one house for the price of one. Your route isn't bad. Make sure you're tight with numbers and you know what you're goal financially will be after you buy it. 

Mine was to save up to 20k after I bought my duplex. 

Good luck shipmate. 

@Cody Bain , I thought I replied to this when I was tagged but I guess not.  Sorry about that. 

Step 1 = Focus on flight school.  However, if you can get the house purchase figured out, the roommates lined up before coming down here, and the numbers work then go for it.  I rent most of my houses to flight students now as I can usually justify a little more rent since they are basically paying by the room.  The wear and tear goes up with that many adults living in the house and everyone knows what goes on during flight school.  Just find the right place and run the numbers as if it was being rented to a family instead of "will it work for the first year with 3 of my buddies renting rooms."  

Lastly, don't put down 10% on your VA loan. Put down 0% and get the seller to pay concessions so you don't come out of pocket at all. When I used mine, I got paid $1k to buy the house. Yeah the funding fee is a little higher but I'd rather have that 10% to put down on my next one or keep it invested elsewhere where I'm earning more than 4% or whatever a conventional loan interest rate is these days.

Good luck and let me know when you get down here.  There are a few meetups and REIAs that would be worth attending when you have time.  But again, don't forget about Step 1!

@Cody Bain you are considering one of the most common mistakes of active duty personnel. You should not buy as long as you know that you are going to move frequently. You have the rest of your life to buy a house. It's just a house. There is one on every corner. You should focus on flight training for the next year. When it's time to leave, give notice to the landlord and move out. Having a house in another state is a great way to lose a lot of money.

Hey Cody,

BLUF: Buy a dang house. It’s not that bad. Academy kids have been doing it for years, including several recent people you probably know. Two of us 2017ers own houses down here already. Do your research, run the numbers, and make it happen. You’ll probably have 2+ months of free time once you arrive.

VA loan with 10% down is a bad idea in my opinion. The 0% down VA loan is the greatest thing since sliced bread. You'll likely end up paying about $4,000 out of pocket in closing costs even with a 0% down payment. Hang on tight to your cash and use it for your second property in a year or two. It is way harder than you think to save up another $18k once it's gone. It's well worth the extra VA funding fee to me.

Don’t forget to include these monthly expenses in your calculations: capital expenditures, vacancy, management. People leave these out and think they are cash flowing when they are not.

Biggerpockets has a calculator that makes this much easier for you. Under the tools tab, click on “rental property”

Pensacola/Pace/Milton area is a great market. Property is relatively cheap compared to many places we might go from here. Ratio of rent to property cost is also relatively good. Finding a 1% deal here that is somewhat turnkey is very possible (I did it). I don’t recommend looking for a major project, mainly because you don’t have to here in order for the math to work. Keep in mind the 1% rule gets significantly more challenging to satisfy as you look at bigger, more expensive properties. My 3/2 house in Milton was $84k and will rent for about $900. A house that’s twice as expensive probably won’t rent for twice as much.

Also, several people are saying “Just focus on your flight training.” I think what they’re envisioning is you taking on some massive rehab project that will overwhelm you with your already demanding job. I think that’s not what you’re looking for. You’re looking for a perfectly livable property that makes sense as an investment. Owning one of those is the easiest thing ever, the hard part is finding it and getting it under contract. You’ll have plenty of time to worry about a property manager and all that later on. Like a year from now. It’s not that bad.

If you can visit the area during your 30 days of leave and actually look at several properties with a realtor, that would be really helpful. I did this over spring break and again during my 30 days last year. I made an offer during the 30 days of leave, and I closed on it from New London by the time I reported in August.

Lastly, it’s ok to have mood swings about rent vs. buy. I definitely did. It has to be your own decision. I’m definitely glad I decided to buy and found a deal that worked.

(678)544-8064 Text me so I’ll have your number. I’ll be glad to help you however I can, including checking out a couple properties or helping you run the numbers on a few.


@Cody Bain - thank you for your service. Sounds like @Jim Cummings is giving you some great advice. Investing in Pensacola since 2014, I can also tell you the market is hot, doesn't mean you can't find a deal but it will take time which is more than likely a luxury you won't have. Best thing, when you arrive come join the local and very active PIG led by @Matt Robinson to get associated with link minded (and many military) people. 

Thank you everyone for the replies, I've got a little bit of time to sit on this information.  But I appreciate all the insight!

@Cody Bain , I think @Stuart Grazier and I are the only ones that can truly answer this since we have both been through flight school in Pensacola and understand the daily routine etc...  If I could go back to 1999 and do it over, I would absolutely buy a property.  Run your numbers before you get there.  Use the 2ndLt BAH rates as a good starting point for the rental income and talk to several property managers.  I waited to start until I got back from my first deployment in 2003, but wish I had started in flight school.  Do your homework, but get started now!!!  Line up your roommates before you get there and it will make it even smoother.....

I am from Pensacola but live in Houston now. I would buy a house, especially being a junior officer. This would get you into both the military and civilian buyer or renter. Using the VA loan is a good option but depending on time you have left to transfer to Pensacola there is always a way to use private lender if your wanting this as an investment property. Most of the time the housing is unavailable on base, most enlisted are in the barracks that are in tech school and the officer housing is usually taken. The freedom of being off military installation and decompress is a nice remedy that is solved living off base. Where the location of NAS Pensacola is between Perdido key and Pensacola beach. It’s about 20minutes to downtown depending on what side of base you live on and same to perdido key. I hope this helps and best of luck to your future endeavors in the coastguard!
Giovanni Luna

Hey @Cody Bain it sounds like you've already got a good bit of advice from a lot of good people on here. I can vouch for three of the people on this thread with great reputations. @Tim Kelly @Jay Helms @William Allen    All of those guys are a part of PIG (Professional Investors Guild) or were at one point. If you plan on holding onto the property after moving out of Pensacola later in your career, I don't think you can go wrong. I purchased 7 properties in about three and a half years and have never had an issue finding a tenant in any of them. With that said, I don't want to come across as just another Realtor who thinks you should buy for the sake of buying. If you're not going to hang onto the property for at least 3 years, you're probably better off just renting a place out. If you do plan on buying, and you'd like me to preview some properties for you before you're in the area, just let me know. I work with quite a few military guys and out of state investors, so I'm used to going to properties and getting a video to send it off to a prospective buyer. Let me know if there's anything I can do to help. 

Cody - shout out to a fellow Coastie! I was reserved a long time ago and loved my time in the service.

I bought 5 units in Pensacola about 3 years age. Those properties have soared in value. The whole has been one of the hot markets in the US. I do t go a week without receiving 1-2 offers to buy me out in the mail.

That said I can’t recommend house hacking enough. Find a four plex if you can and live in it while renting the rest. Then when you move turn it over to a PM. I highly recommend Realty Masters - founded by a retired Navy Captain. They do good work.

Good luck - always happy to answer questions.


@Korey Rademacher Glad to hear some reassurance that the advice I'm receiving is solid.  Also thank you for the off, that'd be a huge favor!  But I'll be coming down to Mobile, AL in the next month for a few temporary duties and plan on touring properties while I'm in town.

Origin/Pacally posted by @Cody Bain :

@Korey Rademacher Glad to hear some reassurance that the advice I'm receiving is solid.  Also thank you for the off, that'd be a huge favor!  But I'll be coming down to Mobile, AL in the next month for a few temporary duties and plan on touring properties while I'm in town.

 Cody, do you have a Realtor or need one? If you need one, I am currently closing on a home down in Milton/Pace and my realtor is insanely good. I can pass you her contact info if you need/want it.

@Tim Kelly , I am inbound to NAS Whiting Field for some 3-year IP goodness. Would like to link up and talk with you some time once I'm stable and moved in, if you're down?

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