Real Estate Investing While Active Duty Military

16 Replies

Hello All!

My name is Tim. I am 25 years old and currently in the United States Army and am stationed at Joint Base Lewis - McChord, Washington. I have been stationed here for over 5 years now and as of January 2020, my wife and I closed on our first home. My wife and I do not come from wealthy backgrounds and have lived in rental homes or apartments nearly our entire lives. ( My father was in the Navy and so I have lived in some military housing as well ) Therefore, we don't have any family members or people close to us that we can use to ask questions about real estate and investing in it. Purchasing our first home was an eye opening process for us and our family.

Instead of spending hours of my life mindlessly scrolling through posts from "influencers" on instagram or other forms of social media during the COVID-19 Pandemic, I decided to pick up some books and look into other ways of making money outside of my income from the military. Books like Rich Dad Poor Dad by Robert Kiyosaki and How to Invest in Real Estate by Josh Dorkin and Brandon Turner (which I actually finished about 30 min ago) have peaked my interest in pursuing financial freedom through real estate investing.

Though it is my goal to make a career in the military, I understand that there will come a time where my service will end. In the mean time, I'd like to learn as much as I possibly can about how to invest in real estate - especially in competitive markets such as the one in the Olympia, Tacoma, and Seattle area - while serving in the military and hopefully the experiences and knowledge I attain can help me transition to civilian life outside of the military.

Is there anyone out there who might be coming from a similar background that can share any information or experiences they've had investing in Real Estate while serving in the Military? What were some of your first steps? How did you balance deployments and training events with your investments? Are there any service members currently stationed in JBLM, WA that are investing in real estate in the south puget sound area?

Thanks,

Tim.

For some reason I can't see posts when I'm the first comment...

I'll be back later when I can read the post  


¯\_(ツ)_/¯

For me I found it best to just do the BRRRR method. Buy what you and your wife like after it's rehabbed, look for another one to go do it again. Anything you and your wife like will probably also be liked by other military members. I try to pick in good school districts and I target BAH for E6-E8. I like renting to military but will rent to who ever is best qualified. You can join my page on FB Military Owned and Operated Rental Homes! You might see someone from your area. That's page allows military members to rent or sale homes without agents.

Good on you taking the time to be productive and learn something new during these crazy times! Investing as active duty is extremely doable. Would be more challenging to self manage if you deploy, and would likely need to outsource or rely on your spouse, but the latter could be a lot to ask! I would just make sure that all your deals make sense with outside management, and either go that route right away, or be prepared to. Other than that, get in the game and keep learning! 

Hey Timothy,

Awesome to hear you're looking to get into REI and pursue a life of financial freedom! I'm currently deployed and have taken this time overseas to do a great deal of self education. I'm now very eager to return to the states confident that I've taken the steps necessary to hit the ground running in the REI game.

I would highly suggest Scott Trench's book "Set For Life" as he covers some fundamentals to achieving a life of financial independence and may help give some direction in your approach to real estate investing. Podcasts and audiobooks are great as they can be listened to almost anytime. Which anyone in the service knows there is no shortage of downtime. Of course the BiggerPockets podcast is a good place to start, as well as the new Real Estate Rookie show which has tons of helpful information for beginners.

Continuing to learn and develop connections is crucial to anything in life, especially true in this business. I wish you the best of luck in your endeavors, let me know how I can help! 

@Timothy Lynch welcome to BiggerPockets brother!

There are a lot more military REI guys/gals than you might think, and several communities of military real estate investors floating around! You're already off to a great start by reading books and getting educated. I would be happy to jump on a call sometime and answer any questions you might have if you'd like.

I live in Poulsbo, Kitsap County. Strong Navy presence here, and there are a lot of folks who buy, rent it out while deployed, and come back eventually. Or sell. (The seller of my house was on a sub in Guam while we were going through closing.) Yes, you'll need a good plan for managing while deployed, but agreed it's totally doable. Good luck! Ping me if you have questions about Kitsap.

I can see the post now... 

Like others have said, your story sounds very familiar. A lot of people come from middle class, join the military, and find their way into real estate investing. Sometimes by choice, sometimes by chance. 

Real Estate is fun and super easy, once it gets going. If you target Military, then turn over should be between 3-5 years depending on when they catch orders. This is just how it has been for me; I am sure other people have horrible stories. So, for me again it's easy because I just have to work to get it rented, then it's on auto pilot for 3-5 years. I don't raise rents once they move in. This is just how I do it, everyone has their own technique. Also, because I live in the home prior to renting it, I know everything about the home and become friends with the neighbors. The neighbors inform me when things look odd. Some frown on that but again it is just something I do. With all that said don't just stop with Real Estate you can rent out your car through online Apps like Turo. You can even test the waters as property manager by renting a room in your home out. If you can handle a roommate living with you then I am sure you can handle managing a rental.

RV life is also another great deal. Some people do this because they can test the waters by renting their home as they live nearby in an RV. If the renters don’t work out, then you can move back into the home. Then they can use the RV like everyone else, by only using it for vacations. If the renter’s workout then they will be turbo charging their saving account and be able to buy fixer uppers. Then they can park the RV in the driveway while doing a full rehab on a property. These tips are just to help someone get started. Kind of like the Military, it does not last forever, it’s a temporary thing you are going.

@Timothy Lynch

Best thing I ever did to get started was to house hack. I used a VA Loan to cover the costs and lived in one side and rented the other. Once I moved, I rented both sides and it cash flows pretty nicely now. May be hard to find something that cash flows with a VA Loan at JBLM though. I also target the Senior NCO / Junior Officer price points for maturity, responsibility, etc. Nothing against Junior Enlisted, but you know what happens when a bunch of 22 year olds get together lol.


For deployments. My first house I bought, I rented during my first deployment and I hired a property manager to oversee it and they were 90% useless. I was so fed up with them, that I just straight up sold the house (this was before I did a lot of self education). Now, I will interview property managers for 30-45 min before hiring them and have had minimal issues since, including during a second deployment. At most, you may get an email about a repair that is above your threshold for what they take care of automatically. 

Just an update:

I've only talked to my old real estate agent and my previous lender about what I want to do. Which I think I'd like to get into small family residential housing using the BRRR method then eventually move into multi family residential homes. However, after talking about financing with my lender, she recommended against using hard lenders and tried to steer me towards using another VA loan to make an additional purchase.

She recommends that I live in my residence for 1 year (apparently a requirement for VA sponsored loan) *So I'd have to wait until Jan 2021* prior to renting it out and purchasing another home. Then she told me to use a Justification ( I had another child since purchasing my home) to buy another property without putting any money down. She also said VA entitlements are higher in pierce county, as high as 710k!

I do feel like I'm not really using the brrr method because I'm not purchasing an undervalued house to rent out because it is a very aggressive sellers market in my area. Instead, I would just be basically purchasing another home with the hopes that rental payments would create equity and the appreciation of the homes would increase in value giving me a low cash flow or passive income- but wealth in the long run.

I’m hoping this coincides with a market dip around Jan 2021 and interest rates remain low that far out.

Does anyone know any specifics about using multiple VA home loans? Additionally, when renting out a home can I specifically choose military when evaluating applications from tenets? Does anyone predict that there will be a significant impact on the market especially when it comes to rental rates on single family residential housing in the areas of Olympia and Tacoma?

@Timothy Lynch Run the numbers yourself to see if it's better to do a hard money loan or a VA loan, rather than just relying on what she says. Obviously she wants your business and will recommend finance with her. If you can find something good where the numbers make sense, hard money isn't bad. If you do a VA loan, yes you have to live in it for atleast a year. Having multiple VA loans isn't an issue, assuming you can qualify for the amount you need.

Be careful on specifically choosing military tenents, as that can be a discriminator. I would have multiple reasons why you select someone and don't select others, don't want to get into legal trouble. 

@Timothy Lynch  

What  @David Pere forgot to mention is that he's the host of a pretty good podcast and has quite the following of military members on Facebook that are all interested in real estate investing (From Military to Millionaire). Similar to BP, it's a great place to learn from others.

Another resource I'd recommend is Active Duty Passive Income -- another forum by military for military.  They also have a podcast and a huge FB group that you can network with.

A good paid resource is Michael Blank network...  That's where I started before I discovered ADPI and FM2M...  I still lurk in the shadows of all three and parachute in when there's a question on apartment investing (or throw some shade on @David Pere's LinkedIn posts just for giggles).

I started buying houses at duty stations and have since transitioned to investing in apartments.

Good luck to you.

@Timothy Lynch I know it can be both overwhelming and frustrating when you are starting out, but you are doing the absolute right thing by educating yourself.  As @Brian Briscoe mentioned, the information currently available is phenomenal.

The best thing you can do is take @David Pere up on his offer to have a quick call. I've found the hardest thing is often finding a solid mentor that will help you long (mainly because most military members are just not comfortable asking for help, its not in our DNA and the constant moving/TDY/deployment tempo adds a layer of complexity with keeping a solid relationship).

Your timing is almost spot on to be seeking help as @William Allen is hosting an educational event with a slew of the big military names you will come across (you might even recognize a name or two from your post above).  Even if you can't attend the event, do a search of all the guest speakers, figure out their niche, and don't hesitate to reach out!

Check out: 
https://www.biggerpockets.com/forums/521/topics/811095-military-veterans-rei-live-event

or go direct to: 
https://veteranslive.com/home

Best of luck!  Keep the community updated on your journey.

 

@James Gray , thanks for the shoutout about the event.  The recordings will be available for all the guests as well...

@Timothy Lynch and anyone else interested I think that event will give you what you need as a military investor.  Not to say you shouldn't expect your questions to get answered here and it looks like they have pretty well but there are 20 speakers talking about these EXACT topics from all those communities next weekend.  Hope to see some of you there, we don't have a huge group so it should be pretty personalized!

Hey @Timothy Lynch - Thank you for your service and congrats on your first home! There are a number of real estate investors who are fellow soldiers stationed at JBLM...I have helped several of them purchase investment properties to househack in the South Puget sound/Pierce county area; and one of my triplex listings is being purchased by an active duty solider using a VA loan.

VA loans are great tools to jumpstart your investing career. Feel free to reach out if you want to chat.

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