All Forum Posts by: Jason Minnich

Ok, I'm really kind of disturbed by some of the discussion here because its so darn black and white. Yes there are people who it was the right decision to leave the military and invest, and there are those that stayed in and retired out, but there is absolutely no reason that you can't do both. At the end of the day, Edsiaren Ignacio, you need to ask yourself why you joined the military. If it was for "A" job, then what life situation changed that you don't need a job anymore and are able to take on REI full time? If it was for service to the country, then when you enlisted, how long did you see yourself serving.

As far as retirement goes, while it may not be a full time jobs worth, for 20 years of service, retiring at 41 is HUGE! It's literally free money for the rest of your life, yes you paid into that by working hard hours now, but its a really good deal, there are very few jobs that have a comparable retirement option anymore. Then their are the benefits, I think Bill Gulley adequately covered the additional benefits that you get that while inconvenient at times, are none the less benefits you get you otherwise wouldn't have.

Finally, Why can't you do both? As an E-4 I get that you might not be able to stay off base (assuming you aren't on sea duty) but since you are married I believe you are permitted to stay off base, why not have your non-taxable BAH work for you in the form of a mortgage, or even get creative and get a VA loan, get a 4 plex, become a landlord and have that supplement your income, all the while using your BAH to cover your housing costs. There is absolutely no reason you can't invest while you are in the military. It opens you up to many different markets, it allows you to travel if that is your thing, you can homestead if you find a place you want to call home for a while. I just really don't get why you have this preconceived notion that REI and Military are two separate and mutually exclusive things.

Caveat - I'm an officer, but all that means is I went to school first and am able to afford more from my base pay when looking at housing. If you are creative with your financing, and use the tools (like your VA loan) to your advantage, you have every opportunity regardless of rank, and for the most part us O-types don't get down-payment sized reenlistment bonuses for key career fields, so you might actually have a leg up in getting started on me.

Bottom line take aways - Edsiaren, you actually answered yourself in your post if you read between the lines. You asked "When should I start investing?" I think everyone here can agree with me when I say, "NOW". Investing isn't a job, it's saving for a purpose. If you are good at managing the money you have, you can live without a job, but that requires money to start out, though not always your own. Ultimately, you need money to invest, unless you get really creative, but even then, while you build your business, you need something to get you by. So I think the bigger question is "What is wrong with the pasture you are in?" because every pasture looks greener from where you are at, but right now you have a job, and there are a lot of folks that don't and would love for an opportunity to have what you do, but I agree, there are circumstances where it just isn't smart to keep on doing the status quot. I really hope you find what you are looking for, but either way, keep using BP as a tool and community to guide your path. This entire post can be taken as either a push for you to stay in, or a push for you to get out, but I ask you not to take it as either. Use it more to ask "why can't I do both?" and then the follow on, "why did I join the military, and why do I continue to serve?" and never forget, what you are doing ultimately is serving for a higher purpose, this isn't your typical 9-5 job.

Good luck!

Laura,

Welcome! First I want to thank you and your husband for his service. Many people don't think about the spouses when thanking military but your selfless service is something rely on day in and out and it is truly awe inspiring. That being said, you are certainly in luck because the VA loan is available to you in Hawaii and you may even have higher 0% borrowing limits because the borrowing cap is location specific and while most places have it set at the typically Fanny Mae conforming loan amount of 417k certain high value markets (like DC, NYC, HI etc) have a higher cap. From what I can tell its around 625.5k but don't quote me on that. So what can you do with that? I don't know but here's what I would "try" to do. Find a nice 4 plex offer for sale (something like as an example - http://www.zillow.com/homedetails/87-274-Saint-Johns-Rd-Waianae-HI-96792/665515_zpid/) that would fit in your criteria and move into one of the units and rent out the others. I didn't look into the numbers on that property or if it even is still on the market just an idea to get you started.

Now that I've teased you with investing in your area... have you ever considered long distance investing? I only ask this because if you have cash available to make a commercial down payment, it would probably be a much better idea to look into a multiplex in a much lower priced market where you have a greater income potential. The downside to this type of investing is you would need to finance commercially because VA and most other home loans are not available to you due to not being owner occupied but if you have the drive to find a good property manager you might be able to get a killer deal on something.

Finally, I would also recommend setting up forum alerts for your particular area of interest where you want to invest, be it HI or otherwise, so you can get a heads up on whats going on where you care. Also, if you are interested I've got an alert set up for "Military" and I find that comes in handy since we all tend to have very unique but universal to military situations when investing and from that it helps seeing what others are up to. Anyway, hopefully things are going well out there, I can assure you the weather has to be better than here in Ohio, but stay well and good luck!

Jason

I don't know how set you are on granite, but given your area, I would expect its not anticipated. If its the same (usually cheaper), I would look into Corian, I'm particular to sandstone because it hides damage well and if there are scratches you can just sand them out and you have a brand new surface, then if there are major problems they can typically fuse in new material. I don't know if you have a deal on a granite guy but just a thought. Also the black appliances will really break up the white, nice!

Looks nice, keep up the updates! That is an awfully white kitchen, are you planning on putting a black oven in or something else to break up the hospital feel?

Cameron Bradley, I can field your online REIA question, you're looking at the best one right here! Biggerpockets is great for networking, meeting folks in your local area, and getting more experience, heck there is even a meeting every once and a while (can't wait to see when/where the next one is). Find your local target market, look there and join a local REIA, and keep using BP!

Also regarding how you network at a local REIA, you need to know what you are looking out of the group. If you need a manager, go with questions related to management, if you need a mentor, look for someone who has a broad knowledge and has been around the block, maintenance look for a contractor. Build your base of the key players (manager, contractor, CPA, attorney) in your target area and you can grow from there.

J Scott, good idea, since I normally move to my markets, it would probably help a lot if I scouted through the local REIA's before I show up and then build my experience once I'm there, attending when it makes sense to. Thanks!

I'm interested in what you find out as well because I move often and it would be nice to join my "next" REIA group before I'm there but I don't want to be paying fees for a service I'm not necessarily getting. Good question hope someone has some advice!

First, thank you for your service!

I won't comment on the town home aspect but I will mention that the military bases you are looking at are something you really need to do your research on. They are looking at doing another round of BRAC (base closures) here in the next couple years (so they say) so you need to determine the solvency of the bases you are looking at purchasing around because depending on the mission it could go away. I do a very similar strategy but being military I have a bit more direct knowledge on my bases. For example I've bought in Rosamond, CA and Dayton, OH, because the odds the AF will close down their major test base and their major acquisition hub are close to nil, but I'm really weighing my decision at the next base I'm slotted to go to, in Albuquerque, because that bases primary roles are directed energy (which is slowly being decommissioned), special operations, and the nuclear mission, of which neither of the latter two "Have" to be in ABQ, in fact, Spec Ops can easily move to Florida, and Nuclear could easily move to a number of other places. Sorry if you have already done your due diligence in this, I am just personally becoming more aware of these issues as I look to move here soon and I want to make sure fellow investors are considering the fact the military base, especially with all the cuts going on, might go away.

That being said, is't not a bad strategy, I'm doing something similar, but just know what your risks are and have more than one exit strategy (aka what if you can't rent). Also figure out when the major move cycles are for your base. If its air force its typically summer/fall, so if you buy a house after August you might be holding it until next spring (like I had to) which really really sucks. Further, depending on your target renters you might not attract the nicest of military tenants, if its a rat hole, you typically end up getting rat hole level tenants, so they don't care, but if you have a nice place, and you can get a good family in there, you are set for 1-4 years. Another thing to consider if placement of tenants, people deploy, move, and everything (as I'm sure you are aware), which means you might have a higher turnover rate than if you were in a strong civilian rental market. When my rental in California placed a civilian family with a good source of income and no direct military ties I was very happy because this means I don't have to worry about dealing with a military clause or breaking the contract or anything serious like that, and my long term lease holds more weight if the DoD decides to go and reduce the amount of housing allowance they are providing in my rental market (which they are doing).

Anyway, good luck, hope that help a bit, and let us know where you are thinking about renting (general area) so we can get a better idea of how to help you out and maybe some folks with that area as a key word can chime in.

Be well,

Jason

I live in Beavercreek, what do you need?

Welcome Tim Ward! As a fellow service member thanks for your service.

As far as your plan, what are you planning on putting down? Are you looking at doing this process every time you PCS? How handy are you and your wife? How much do you have saved up outside of any down payment? When was your last and when do you expect your next PCS to be?

Your plan is similar to mine in I'm trying to build equity and over time cash flow but some things are slightly different. Ideally you want to be able to take advantage of the really low interest rates for as long as possible so I would initially recommend looking into using your VA loan so you have to pay 0% down, but unless you find a very good deal on a move in ready house, and I don't know your market, that might be difficult. Further, if you do go the VA route, consider putting the extra money you would otherwise use for rent into an investment account or something similar so that you have it more liquid funds available for future down payments and expenses. This would serve the added benefit of being able to deduct what little you do pay in interest from your taxes to reduce your future passive income amount.

I'm not an accountant so if you have one I would recommend you talk with them but it sounds like you have a decent direction, your big stepping stones will be determining what to look for in a good deal and a good house. For this I would highly recommend borrowing a couple of property inspection books from the library. Many of the folks here have been doing this sort of thing for a while so they know what to look out for, but if you read a few inspection books (or your wife does), you can look at every house you are shown with a critical eye and verify the good deal before you even consider signing a contract or paying 2-300 for a real property inspector.

Also remember that some of the best rental properties are homes that "you would move into" for just that reason, so consider the homes neighborhood, proximity to shopping, parks, etc, and eventually you will (or already have) a feel for what you are walking into. Don't jump on the first house you look at, as a new investor even if it looks like a sure thing use BP to your advantage and post the deal and your reasoning and get some advice for what other people might do with the house. Because you are more concerned about the eventual equity in the house, you are less worried about meeting a 2%,50% etc rule but finding a place that you can rent for at least 1% of the purchase price is a very easy way to see if you are too far out of the ball park.

Also be honest with your realtor, you are buying this place to ultimately be a rental property, what would he recommend. Further, consider using USAA's homebuying service when looking for a realtor, they pair you up with a preferred realtor and they (and ultimately you) share that realtor's commission in the form of a rebate check, its not much but its kind of nice, and it doesn't lock you down to USAA's banking products either, just gives you more leverage to make sure your realtor is working for you.

Compare the loan products available to you, if you are interested I know a bank that has done great work for me in the past on both VA and conventional loan products and they work with you to get the best deal. I found USAA to be competitive about 4 years ago but since then they have been overly expensive when considering the cost of closing and points for the loans. Search around for a good deal on your insurance, in that regard I have never found USAA to even be the slightest bit competitive, but USAA is very easy to purchase a policy and deal with (so I've been told). Whomever you end up selecting I would recommend that they also have a dwelling/fire policy that is competitively priced so you can rent the house and stay with your same insurance company, just switch policy types (it's a lot easier).

Anyway, that's enough for me, keep us informed!

I honestly don't think it's an ethics issue, I think they are expanding too fast to keep up and dropped the ball on their sample contracts. That being said, I'm planning on contacting more companies now and I appreciate your response.