Five - Six left in the military

18 Replies

Situation: 18 yr. Army active duty service. Started out as an E1 and now a CPT. I have no debt and plenty of paper investments. I want to start real estate investment. I created an LCC in my current area, Augusta, GA, which is booming due to the whole Cyber initiative. Have a good CPA and Realtor. However, I am leaving for an overseas tour soon and the Mrs. will have her hands full with four kids, two dogs, and a cat. I do not want to burden with more. I can borrow against my TSP for $10,000 startup cash at 2.8%. I have a couple potential properties that I could make offers.

My Goal: To purchase properties, SFD or Multi, to create $8,000 in passive income within the next five to six years to retire and enough the little time I would have left with my children before they leave my home. 

Experience: None

Concerns: Trying to manage and find properties from across the ocean. Should I continue to pursue this or wait until I return from overseas? 

Any guidence and advice are welcomed. 

Christian

@Christian Wamsley ,  Thank you for your service sir.  I was outbid on the property once by a destroyer captain, who was out at sea, so everything is possible. Asses your position and  find a workable arrangement. Some ideas - vacation (short term) rentals . Get a place, get a company to manage it.  Or go traditional rental route, buy a place, turn it over to a management company. Look for turnkey providers in your area - may work as a start, you will have an option to take over once you are back. Look at partnerships / see if you have a good buddy or two who you can trust at who are into the real estate. If you have funds / means where are all kinds of opportunities to become silent partner / investor. 

Good luck

@Christian Wamsley good day brother. I am stationed overseas as well and I purchased my first property over here.

The biggest thing is having a solid team of people where you plan on investing. I found a property manager as I didn’t want to have my family dealing with the day to day operations of the property.

Just research your market and do your due diligence on your team there and you will be able to do it easily enough. Just ensure you have a fax machine or a printer/scanner so you can receive and send documents.

It is definitely possible and good luck out there. 

-Steve

@Christian Wamsley - Good morning. I’m active duty guy myself (spent some time at Gordon many years ago). One factor to consider is if you’re going overseas for a TCS or PCS. If it’s a TCS then that creates a whole different set of concerns (internet connectivity, available time, etc). If it’s a PCS you’ll have the time & tools it will just be the distance to consider. 

Distance really isn’t an issue but if you’d rather be present for your first deal then as mentioned above you could go in with another investor and partner on deal, just provide the private money loan to an investor, or a hybrid of the two. It just depends on your comfort level. 

@Christian Wamsley and others who have experience on this thread.   Thank you for your service.  Our director of construction was/is a Marine.  He choose to wait until he left active duty.  It does take time, and energy.  Please make sure you are safe (as can be - alert and aware) and not taking away energy to maintain your safety!

@Christian Wamsley you will have access to shop properties online while you are overseas, but this would just be to keep an eye on the market. You should be able to save more money while deployed, but keep in mind it's only 9-12 months. You will be back and the market may have shifted by then. You said things are booming, which means it isn't a great time to buy anyway. Your goal of $8,000 is very realistic in 5 years. It is feasible for you to accomplish that with one real estate deal. Either an apartment complex or a package of turn-keys from an existing landlord that is retiring. Real estate will still be here when you get back, so don't worry about that. Focus on your mission. God bless.

I'm also active duty and have made several purchases out of state (similar to what you want to do).  As others have stated, ensure you have the connectivity to stay actively engaged with your team.  Also, you will need a trusted PM that can perform maintenance / rehab work themselves and provide you with an accurate assessment of the property and costs to get rent-ready.  Finally, you'll need a Lender who can perform closings virtually (e.g., thru a mobile notary) and uses systems like docusign to process paperwork online.  Happy hunting!

Originally posted by @Christian Wamsley :

Situation: 18 yr. Army active duty service. Started out as an E1 and now a CPT. I have no debt and plenty of paper investments. I want to start real estate investment. I created an LCC in my current area, Augusta, GA, which is booming due to the whole Cyber initiative. Have a good CPA and Realtor. However, I am leaving for an overseas tour soon and the Mrs. will have her hands full with four kids, two dogs, and a cat. I do not want to burden with more. I can borrow against my TSP for $10,000 startup cash at 2.8%. I have a couple potential properties that I could make offers.

My Goal: To purchase properties, SFD or Multi, to create $8,000 in passive income within the next five to six years to retire and enough the little time I would have left with my children before they leave my home. 

Experience: None

Concerns: Trying to manage and find properties from across the ocean. Should I continue to pursue this or wait until I return from overseas? 

Any guidence and advice are welcomed. 

Christian

Welcome to the site Christian. Don't forget about your VA loan. Buy yourself a house using that then move out after 1 yr turning it into a rental property.

@James Wise that plan hasn't worked out for millions of Veterans. No money down also means no equity. When the market slips, you are instantly upside down. Then when the Army give you a new assignment in 2 years, you can't afford to sell the place, so you rent it out and it doesn't cash flow. I've seen this so many times that it should be part of basic training.

Thanks, everyone for your kind words and wisdom. I feel it is wiser for me to educate myself instead of trying to handle this from afar. I am more of a hands-on individual. Additionally, I do not have a well-established team and trying to make a square peg go into a round hole is not good business. 

I recently attended an REIA meeting, and the topic was about wholesaling. This concept sounds very interesting. If anyone has information or guidence about the subject, just point me in the right direction.

Thanks 

Christian

Originally posted by @Anthony Dooley :

@James Wise that plan hasn't worked out for millions of Veterans. No money down also means no equity. When the market slips, you are instantly upside down. Then when the Army give you a new assignment in 2 years, you can't afford to sell the place, so you rent it out and it doesn't cash flow. I've seen this so many times that it should be part of basic training.

 Rental property investing as a business model in general is a sound business. Simply throwing the best financing terms on top of a sound business does not make it a less sound business. If the vet buys the right property for the right price they are in a great position. The vets whom you've seen run into issues didn't do so because they had a better loan product available to them.

@Christian Wamsley     Welcome to BP.    I also did a couple of tours i @ Gordon and have a house there that i have turned over to a PM.  It was a deal where i lived in it , fixed it up and then turned it over to the PM when I  PCS'ed.    Augusta certainly has a positive  rental market.   

My suggestion would be go on your overseas tour, save up , continue your education  and when you get back try and find a small multi (2-4) unit that you can house hack and rent our your current residence .    you can fix up the multi doing some hands on work, and gain experience as a landlord while your build up your portfolio 

@Christian Wamsley Thanks for your service! I'm an Augusta native and have been personally investing in the area since 2006. It's definitely getting a little crazy out here.. Flipping seems to be the good move as far as investing because of the shrinking inventories, especially in the more expensive areas. I focus on Richmond and Columbia counties, but across the river in Aiken and Edgefield county SC we are also seeing similar activity. Lately I have been getting crazy good returns in South Augusta flips (and they go under contract in a couple days), but demand for Columbia County and West Augusta distressed property has been too strong and overpriced IMO. I see folks happy with 5-10% projected returns on flips, which is WAYYY too risky for me. I'm enjoying 20-50% returns in South Augusta/Hephzibah right now and loving it. Just don't expect to find anything on the MLS. Off-market deals are the play right now because there are too many sharks out there making offers every day (me included).

I've been told by some "old-timers" that military towns are fairly insulated from macroeconomic factors, particularly in lower-priced markets like Augusta, GA.  The price/rent ratios are strong in Richmond county (unfortunately have been shrinking rapidly the last several years) and there are plenty of great "C" class areas to choose from.  This leads to cash-flowing rentals, which is the retirement strategy..

Feel free to reach out if you would like to discuss Augusta real estate.

Chris,

IMO do some in depth market research if you haven't already. Basically conduct an IPB of your market, schools, median incomes, appreciation, future business developments, etc. etc. That will give you a great idea of what area you want to target. Then find some turnkey properties in that target and go for it. If they provide reputable properties for a good price, and they cash flow, I don't see a reason why you can't make the purchase from overseas. Next, interview as many property managers in town as you can. Last time I deployed my PM was horrible and it caused a lot of headache. So, find a good PM, a good property, and it shouldn't cause any stress, just a nice check. I deploy in Feb and still plan on buying more while i'm gone.

Christian, you hit the point about having a trusted, vetted, and established team in place. I'd advise not to go solo in an investment operation while you're in the service. 

@Christian Wamsley With technology anything is possible. Is the LLC in both you and your wife’s name. You could set the operating agreement to allow for her to sign everything if you find a deal.

@Chris Majors Thanks for the in-depth advice in Augusta. I happen to agree with you. I just found an OK deal on MLS and I notify the agent that I am working with and when she got back to me that property was under contract. Things are moving fast. I PM you a while back. Hit me up and let see if we can work something out.

@Joseph Burell   I feel I have an OK team. My spouse is assisting with leads and I have a couple wholesalers looking out for me. The only thing I lack is having a good contractor to call on for estimates and work. Still looking

@Kyle Bergren Thanks for the advice. I believe that is a lot of good people that want to help. My failure on my part was to build a solid team before flying oversea 

Account Closed Yes, the LLC is set up that way she can do the signing.

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