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Buy Your First Rental On Active Duty · Military Real Estate Rookie Show

0:00
SPEAKER_00: Hello, military real estate rookies.
0:02
SPEAKER_00: I'm your host, Rena.
0:04
SPEAKER_00: Today's topic is about buying your first real estate investment property while on active duty.
0:10
SPEAKER_00: I'm excited.
0:12
SPEAKER_00: This is something personal for me.
0:15
SPEAKER_00: So let's enjoy this show.
0:17
SPEAKER_00: I'm your host, and I'm so glad that you decided to listen to me.
0:21
SPEAKER_00: This is, like I said, a very personal episode for me.
0:25
SPEAKER_00: So I want you guys to listen in.
0:27
SPEAKER_00: And if you're an active duty, a veteran, a military spouse, or someone who simply wants to understand how military families can use their wealth and build wealth, you are in the right place.
0:40
SPEAKER_00: And today's episode is a special one because we're talking about something that I have personally experienced.
0:47
SPEAKER_00: We're talking about buying your first real estate property.
0:51
SPEAKER_00: So grab your notebook, get on your walk, you know, just listen to this because it's going to be really good.
0:58
SPEAKER_00: So let's get into it.
1:00
SPEAKER_00: So I bought my first real estate property while I was on active duty, and I didn't know everything, but I started educating myself on how to purchase a property.
1:12
SPEAKER_00: So today's conversation isn't coming from a textbook, it's coming from experience.
1:18
SPEAKER_00: So I know that it's like having a military career responsibilities plus trying to build your wealth, but it's some uncertainty about whether you're going to be stationed next and at the same time think about building wealth.
1:31
SPEAKER_00: So, how can I build wealth something financially for myself and my family?
1:36
SPEAKER_00: Because when you're serving, your career takes over.
1:39
SPEAKER_00: You're PCS and all over the world.
1:41
SPEAKER_00: You want to do a great job in your military career, and you want to do a successful time before you get ready to retire or simply want to just get out.
1:52
SPEAKER_00: So some of the things that you may want to think about is you may get orders you didn't expect, you may deploy, you may have family responsibilities, and through all of that, you may still be thinking about building your financial future.
2:07
SPEAKER_00: So those are some things that you really need to think about during your military career.
2:12
SPEAKER_00: And that's why I believe real estate can be an important conversation for military communities.
2:18
SPEAKER_00: Now I want to be clear, I'm not telling you that everybody should buy real estate in this way, but just want to educate you to give you options as far as asking, you know, dealing with another additional stream of income.
2:32
SPEAKER_00: And this episode is about education strategy, preparation, and thinking differently about your first property, because your first property could potentially be more than a place where you sleep.
2:46
SPEAKER_00: It could potentially become part of your financial strategy and building wealth and legacy.
2:52
SPEAKER_00: So grab your coffee, grab your notebook, take out your phone, and take some notes because this is going to be education for people like us that, you know, want to build wealth outside the military.
3:05
SPEAKER_00: Because you're going to talk about how you can start thinking about buying your first property and while you're still on active duty.
3:12
SPEAKER_00: Let's get into it.
3:13
SPEAKER_00: Okay, so I as I said before, my first property I bought while on active duty.
3:18
SPEAKER_00: I didn't know a lot about you know how to buy the first property, but I didn't even know I could buy uh using my VA loan while I was on active duty.
3:26
SPEAKER_00: I thought I had to retire first before.
3:28
SPEAKER_00: But I started educating myself and listening to podcasts, and they really educated me on the things, and I started reading a lot of books on real estate.
3:37
SPEAKER_00: And I want to pause right there because sometimes we look at people who are successful in real estate today, and we forget that everybody starts somewhere.
3:47
SPEAKER_00: Nobody starts with 10 properties.
3:49
SPEAKER_00: Forget Instagram, no one starts knowing everything, no one starts as an esc expert, and there's always a first property, there's always a first offer, there's always a first inspection, there's always a first time sitting at the closing table, you know, wondering if you made that right decision.
4:12
SPEAKER_00: And there's always a moment where you say, I'm going to take this seriously.
4:17
SPEAKER_00: I'm going to learn a little bit about real estate investing.
4:20
SPEAKER_00: When I first bought my house, I like I said, I didn't know a lot about real estate investing.
4:25
SPEAKER_00: I educated myself.
4:27
SPEAKER_00: I didn't have the knowledge that I have today.
4:29
SPEAKER_00: So I want to share it with you.
4:31
SPEAKER_00: I was learning, just like you.
4:34
SPEAKER_00: And that's one of my biggest messages I want to give to you all today.
4:38
SPEAKER_00: Don't confuse being a beginner with being incapable of buying a real estate investment property.
4:44
SPEAKER_00: It's just you have to educate yourself to make the right decision.
4:48
SPEAKER_00: And that's actually why I name this podcast Military Real Estate Rookie Show.
4:54
SPEAKER_00: Because I want to talk to the person who is sitting at home right now, whether you're a veteran or not.
5:00
SPEAKER_00: I want to invest in real estate, but I don't know where to start.
5:04
SPEAKER_00: I want to talk to the service members who has hard have a hard time learning about real estate because they're out there working and who has heard about the Viet Loan, but they don't know how to use it.
5:14
SPEAKER_00: I want to talk to their military spouses who has been watching military real estate rookie show and who've been watching real estate videos and they just don't know how to start and what to do.
5:26
SPEAKER_00: I want to talk to the veteran who wish they had purchased a property years ago.
5:31
SPEAKER_00: And I want to talk to the person who has already already purchased a home and wondering, could this eventually become an investment property?
5:41
SPEAKER_00: The answer is always yes, isn't it?
5:44
SPEAKER_00: It's not always no either.
5:46
SPEAKER_00: But it's worth asking the question.
5:48
SPEAKER_00: Now, let's change the way you look at real estate.
5:51
SPEAKER_00: One of the biggest lessons I've learned from purchasing real estate is that you have to change the way you look at property.
5:59
SPEAKER_00: You have to have a mindset that are you investing or this is going to be a forever home.
6:04
SPEAKER_00: But a traditional home buyer might ask, do I like this house?
6:09
SPEAKER_00: An investor asks, Does this make sense financially?
6:14
SPEAKER_00: Does this make sense as far as margin?
6:16
SPEAKER_00: Can I rent this out?
6:18
SPEAKER_00: Those are two very different questions.
6:22
SPEAKER_00: So you can walk into a house and fall in love with it, but you do not want your emotions to get the best of you.
6:30
SPEAKER_00: You love the kitchen, you love the countertops, you love the bathroom, you're excited by the living room, you love the backyard, you're excited by the neighborhood.
6:42
SPEAKER_00: I mean, those are some things that you that's dealing on emotion, but you have to make sure that you're making the right decision financially.
6:50
SPEAKER_00: You can already imagine where your couch is going to go, you know, where you're gonna put your favorite painting.
6:56
SPEAKER_00: But here's the problem: your emotions don't pay the mortgage, the numbers do.
7:03
SPEAKER_00: So you need to understand your numbers.
7:06
SPEAKER_00: You need to understand, are you able to make that payment and still build wealth?
7:11
SPEAKER_00: And that is something I want every new investor to understand.
7:16
SPEAKER_00: Don't let a beautiful house distract you from the financial analysis.
7:21
SPEAKER_00: You need to know what you're buying, you need to know what it costs, you need to know what the property could potentially produce.
7:30
SPEAKER_00: And you need to know the risk.
7:32
SPEAKER_00: The risk is very important because you can buy a house and then all of a sudden things happen with repairs, the cost of that, and that can eat up a lot of your cash flow if you're an investor.
7:44
SPEAKER_00: So now let's talk about one or twos that I can make the military community unique in real estate.
7:50
SPEAKER_00: The VA loan.
7:51
SPEAKER_00: The VA loan home loan that's unique to the military community.
7:55
SPEAKER_00: And if you're an eligible or serving member, the VA may give you access to this financing and it can be extremely valuable.
8:05
SPEAKER_00: But here's the mistake I don't want you to make.
8:08
SPEAKER_00: Don't think that you just have to buy a house without getting educated.
8:14
SPEAKER_00: I have a VA loan, let me hurry up and use it.
8:16
SPEAKER_00: No, I have a VA loan, therefore, I need to buy the biggest house I qualify.
8:20
SPEAKER_00: No, do not do that because you're gonna end up still trying to make that mortgage when you've over-leveraged.
8:27
SPEAKER_00: That's not investing, that's simply maximizing your debt.
8:32
SPEAKER_00: Instead, I want you to ask yourself how can I use my resources strategically?
8:39
SPEAKER_00: How can I build wealth not over-leveraging myself?
8:44
SPEAKER_00: Those are two completely different mindsets.
8:47
SPEAKER_00: A lender may tell you that you qualify for a certain amount, but your financial goals may require you to spend less.
8:56
SPEAKER_00: Maybe you want to keep your monthly expenses manageable, and that's good because you don't want to over-leverage yourself with debt.
9:06
SPEAKER_00: Maybe you're interested in eventually converting the property to a rental.
9:12
SPEAKER_00: Maybe you're trying to build reserves.
9:14
SPEAKER_00: Maybe you want flexibility because you know PCS orders can come at any time.
9:20
SPEAKER_00: The amount you qualify for should not be a less than priority.
9:25
SPEAKER_00: You need to make it a priority.
9:27
SPEAKER_00: Because you qualify for it does not mean that you should get the whole thing.
9:31
SPEAKER_00: So you need to talk to your lender, talk to your financial advisor, and make sure it's comfortable for you.
9:37
SPEAKER_00: Now let's talk about something else.
9:39
SPEAKER_00: Your first property doesn't have to be perfect.
9:42
SPEAKER_00: In fact, I'm gonna tell you something.
9:45
SPEAKER_00: There are, there may be a perfect property that you extremely love.
9:51
SPEAKER_00: And there are properties that fit your strategy that was matters, right?
9:56
SPEAKER_00: But take your time, look at the property, look at the numbers, evaluate the situation, make it make sense because if you get in this property and you can't be able to make the note, it could really be devastating.
10:10
SPEAKER_00: So maybe your first property isn't going to generate a huge cash flow.
10:14
SPEAKER_00: Maybe your biggest property will not be building enough equity in one year.
10:19
SPEAKER_00: Maybe your first property gives you the opportunity to live somewhere else while building your experience.
10:24
SPEAKER_00: Maybe eventually it becomes a rental.
10:26
SPEAKER_00: Maybe you sell it later.
10:28
SPEAKER_00: These are some questions.
10:29
SPEAKER_00: Once you get in that property, how you want to think about it because you want to be able to be marginalizing yourself and not over-leverage.
10:37
SPEAKER_00: And when I mean over-leverage, I mean give yourself a big gap where you can be able to enjoy the home.
10:43
SPEAKER_00: And your first property is a part of your journey.
10:46
SPEAKER_00: Don't put so much pressure on yourself that you never take the first step.
10:50
SPEAKER_00: And at the same time, don't rush into a bad deal.
10:53
SPEAKER_00: Just because you want to call yourself an investor, there's a balance.
10:57
SPEAKER_00: Don't be afraid to start, but don't be careful, careless either, because you can really make a bad decision when it comes to buying a property that's not worth it.
11:09
SPEAKER_00: Now let's talk about the elephant in the room, and that's PCS.
11:12
SPEAKER_00: That's permanent change of station.
11:14
SPEAKER_00: Military members move a lot.
11:16
SPEAKER_00: That's what we do.
11:18
SPEAKER_00: You can buy your property today and potentially receive orders tomorrow, somewhere completely different.
11:23
SPEAKER_00: And you like, I just bought this house, the military would be like, Well, we need you over here.
11:28
SPEAKER_00: So if you're thinking about purchasing while active duty, I want you to ask one question before you buy.
11:34
SPEAKER_00: What happens if I PCS?
11:36
SPEAKER_00: You know, and if you have to PCS, that's the question needs to be part of your investment analysis.
11:41
SPEAKER_00: Is this can this be a good rental if you want to rent it or simply sell it?
11:45
SPEAKER_00: Would you get a lot of equity out of it?
11:47
SPEAKER_00: Let's say you purchase a home near your current duty station.
11:51
SPEAKER_00: You live there for three years, then you get orders to another state.
11:55
SPEAKER_00: This happens all the time.
11:57
SPEAKER_00: What happens is you ask yourself, do you sell it?
12:00
SPEAKER_00: Do you rent it?
12:02
SPEAKER_00: Do you hire a property management company?
12:05
SPEAKER_00: Can you afford to keep it without having anyone in the home?
12:09
SPEAKER_00: Would the rent cover the expenses?
12:11
SPEAKER_00: These are some major questions that you need to ask yourself before you know jumping to a property.
12:17
SPEAKER_00: You know, would you need a property manager?
12:19
SPEAKER_00: Like I said, would the property be in the area, you know, where tenants are likely to rent?
12:23
SPEAKER_00: You know, is the rent conducive to your mortgage?
12:26
SPEAKER_00: Would it make sense?
12:28
SPEAKER_00: You have to run those numbers.
12:29
SPEAKER_00: Those are some questions you should be asking before you buy any property.
12:33
SPEAKER_00: Don't wait until you receive PCS orders to figure out what you're going to do next with your house.
12:39
SPEAKER_00: You have to make sure that you make these initial steps and you have those plans in front of you.
12:44
SPEAKER_00: And another strategy military members should understand is house hacking, which I've done a lot.
12:51
SPEAKER_00: House hacking, house hacking generally means purchasing a property and living in a part of it while renting out another portion, depending on the property and the financing rules.
13:05
SPEAKER_00: So you need to check with your lender to make sure that you can do this and the county and the city.
13:11
SPEAKER_00: For example, you might purchase a multifamily property where you live in one unit and rent out another.
13:18
SPEAKER_00: Now, I'm not saying every military member should do this, but it's a strategy worth learning about.
13:26
SPEAKER_00: Why?
13:27
SPEAKER_00: Because your housing expense is one of your largest monthly expenses.
13:32
SPEAKER_00: If you can structure your housing situation strategically, you may potentially reduce your out-of-pocket housing costs while building assets.
13:45
SPEAKER_00: Again, run the numbers.
13:47
SPEAKER_00: Don't assume something is a good investment simply because somebody on social media said that they bought all these houses and they house had hacked and everything went great.
14:01
SPEAKER_00: Let's talk about another part of the military life, BAH, basic allowance for housing.
14:08
SPEAKER_00: This can play a role in your evaluating your housing budget.
14:13
SPEAKER_00: But here's what I don't want you to do.
14:16
SPEAKER_00: Don't look at BAH as and say, that's how much I have, so that's how much I'm going to spend.
14:22
SPEAKER_00: No, use it as a tool to purchase your home.
14:27
SPEAKER_00: Instead, consider your entire financial picture, your mortgage, your utilities, your insurance, your taxes, all those things make up BAH when you're buying a home.
14:42
SPEAKER_00: So you need to make sure that it makes sense and that it covers your BAH.
14:48
SPEAKER_00: You know, maintenance, debt, all your financial overview of your blueprint of what you have going on in your life.
14:56
SPEAKER_00: You know, your savings, emergency reserves, you know, don't put yourself in a situation because it's going to rain.
15:02
SPEAKER_00: It's going to have you buy a house, you're going to have repairs, you know, family uh expenses and investment goals.
15:11
SPEAKER_00: If your housing costs are consuming every dollar of your BAH, that may limit your abilities to save and invest.
15:19
SPEAKER_00: The goal isn't simply to own a house.
15:22
SPEAKER_00: The goal is to make a financial decision that supports your larger plan.
15:27
SPEAKER_00: You don't want to do, you don't want to be house poor where all your monies are encompassing your house and you're not enjoying your monies.
15:36
SPEAKER_00: Now we're getting to the part that I really want you to remember.
15:40
SPEAKER_00: Run your numbers.
15:41
SPEAKER_00: I said it again because it's very important.
15:43
SPEAKER_00: You use a pen and a pad or whatever Excel spreadsheet or app that you use, but you need to run your numbers.
15:50
SPEAKER_00: Let's say you find a property for$250,000.
15:54
SPEAKER_00: You cannot simply say the rent is$2,000 and my mortgage is$1,500 and I'm making$500.
16:03
SPEAKER_00: No, that's not how it works.
16:05
SPEAKER_00: You have to account for your expenses.
16:07
SPEAKER_00: Property taxes, insurance, you know, your savings, your emergency repairs, your maintenance, you know, if you're using a property manager, vacancy, just all the things that will happen.
16:21
SPEAKER_00: You have to account for that.
16:23
SPEAKER_00: That simple$500 is not going to be your profit.
16:26
SPEAKER_00: That's why you need to run your numbers.
16:28
SPEAKER_00: And if you're comfortable in the number at the end of the numbers, if you, you know, minus out all your expenses, then yeah, you're good.
16:36
SPEAKER_00: So, you know, your repairs and HOA fees, if you have them, your gross rent is not your profit.
16:41
SPEAKER_00: So just be mindful of that.
16:43
SPEAKER_00: It looks good, but you have to write it on paper just to make sure that it makes sense.
16:48
SPEAKER_00: So gross rent is not a profit.
16:50
SPEAKER_00: You need to write all of it down.
16:52
SPEAKER_00: That's one of the biggest lessons for me, and I want to give it to you.
16:56
SPEAKER_00: So, and if you're listening right now, while you're driving, don't write it down right now.
17:01
SPEAKER_00: Just make sure that you understand that the$500 is just gross rent, but you have to include your expenses.
17:09
SPEAKER_00: And then that's your number, the last number after all your expenses.
17:13
SPEAKER_00: That's your number, that's your cash flow number.
17:15
SPEAKER_00: Just remember that.
17:16
SPEAKER_00: So I don't want to confuse anyone, but I just want to make sure that you guys understand.
17:20
SPEAKER_00: Military investors also need reserves.
17:22
SPEAKER_00: That's a big one.
17:23
SPEAKER_00: Like I said, things are going to happen.
17:25
SPEAKER_00: It's going to rain because something will eventually break.
17:28
SPEAKER_00: Maybe it's the air conditioner, the HVAC, you know, the plumbing, the roof, appliances, you know, all the things that you think will not happen, they will happen.
17:37
SPEAKER_00: Maybe something you didn't anticipate.
17:40
SPEAKER_00: And that's why I don't recommend looking at the purchase price alone.
17:44
SPEAKER_00: I need you to have margin in your numbers and ask yourself: does this make sense financially?
17:50
SPEAKER_00: If something major happens six months after I close, can I truly handle this?
17:56
SPEAKER_00: If the answer is no, you may need to reconsider your timing and your budget and your reserves.
18:02
SPEAKER_00: And that is really a good comment because I want to make sure you guys understand that being an investor means preparing for the good and the bad.
18:12
SPEAKER_00: It may look good most of the time, but you're gonna have some type of repair or something unexpected.
18:19
SPEAKER_00: Now, let's talk about the social media because every day you can open up Instagram, TikTok, Facebook, YouTube, and see something saying, hey, I bought five houses and everything is great.
18:32
SPEAKER_00: I made$100,000 in passive income.
18:35
SPEAKER_00: You need to buy real estate right now.
18:37
SPEAKER_00: And then you start thinking, oh my gosh, I'm behind.
18:40
SPEAKER_00: I need to hurry up and get it done.
18:42
SPEAKER_00: And I'm behind, and everybody is just doing their little thing with real estate and they're making good money.
18:48
SPEAKER_00: All this cash flow is just cash flowing around.
18:51
SPEAKER_00: And let me tell you, don't compare your first property to somebody else's tenth property.
18:56
SPEAKER_00: You don't have, you don't know their financial position, you don't know their debt level, you don't know their income, you don't know how they accumulated the house, you don't know what they did to get that sort of property.
19:10
SPEAKER_00: So don't compare yourself to others, just focus on what you're comfortable with because it can be a little stressful when you're saying that you're behind and really you're not, you know.
19:22
SPEAKER_00: So you don't know the entire story behind the social media posts.
19:29
SPEAKER_00: So don't compare yourself to others that said that they simply bought 10 houses.
19:35
SPEAKER_00: Your job is to build your strategy, not someone else's, because you don't know how they accumulated or built their portfolio.
19:44
SPEAKER_00: When I think about successful real estate investments, I don't think about doing everything alone.
19:51
SPEAKER_00: You need a team.
19:52
SPEAKER_00: You need a team as a military real estate investor, your team can be especially important because you may move frequently.
20:00
SPEAKER_00: Your team could include a real estate professional, a knowledgeable lender, insurance professional, you know, property management, even a close friend that does real estate.
20:12
SPEAKER_00: You can you can even get ideas from them, you know, any professional event that deals with real estate investment, a local event or something like that, or even online, just to get yourself your feet wet, you know, a home inspector, a contractor, a tax professional, any potential attorney with legal advice is needed, you need to make friends for those people.
20:36
SPEAKER_00: So you don't necessarily need all these people on day one, but just build your team over time and that helps.
20:43
SPEAKER_00: But as your portfolio grows, your team can become increasingly important.
20:48
SPEAKER_00: And here's another important point make sure that the people on your team understand your goals.
20:55
SPEAKER_00: If your goal is to eventually rent the property out, tell your real estate agent.
21:00
SPEAKER_00: Tell them your goal.
21:01
SPEAKER_00: Do not say, hey, this is going to be my forever home, and your real estate agent out there looking for a forever home.
21:08
SPEAKER_00: If you're planning to PCS, let them know.
21:11
SPEAKER_00: And if you're looking for an investment, tell your lender.
21:14
SPEAKER_00: Don't let your team assume that you're going to buy this forever home and this is not what your plan is, is to rent it out.
21:20
SPEAKER_00: Your strategy matters because your real estate professional and your lender together can help you meet your goal.
21:28
SPEAKER_00: And if I could go back and talk to myself, buying my first property while on active duty, I would tell myself these things.
21:36
SPEAKER_00: Learn as much as possible before you sign on the dotted line.
21:40
SPEAKER_00: Those are some things that I would tell myself.
21:42
SPEAKER_00: And now I'm telling you all to do that.
21:45
SPEAKER_00: You don't have to sign on the dotted line before you know everything.
21:50
SPEAKER_00: You know, just be careful.
21:51
SPEAKER_00: If you're comfortable, yes, the numbers are right, run the numbers and you're comfortable making the payment, whether you have a tenant or not, do that.
21:59
SPEAKER_00: But because Cost knowledge give you confidence, I'll study the market.
22:04
SPEAKER_00: I would have, I would have studied the rental rates.
22:07
SPEAKER_00: I would have learned about financing, more about it, you know, different ways of financing.
22:12
SPEAKER_00: I would have understood the closing costs more.
22:14
SPEAKER_00: I would have understand the more the property taxes and how that went goes up and down and fluctuates.
22:21
SPEAKER_00: I would have understand more about insurance, you know, and I would have looked for different uh quotes in the area.
22:28
SPEAKER_00: I would learn how to calculate potential cash flow.
22:30
SPEAKER_00: I'll learn how to evaluate neighborhoods.
22:32
SPEAKER_00: And then I would ask more questions to local friends and family and things of that nature, but uh people that have been investing for numerous years.
22:42
SPEAKER_00: And there's no such thing as a stupid question when you're making a major financial decision.
22:47
SPEAKER_00: You don't know what you don't know, but you need to ask questions because asking questions will save you from a lot of pain later.
22:54
SPEAKER_00: Trust me.
22:55
SPEAKER_00: And if you don't understand the answer, ask again.
22:59
SPEAKER_00: You know, before you purchase your first investment property, I want you to ask yourself these five questions.
23:05
SPEAKER_00: One of the questions is, am I ready to buy this home?
23:10
SPEAKER_00: Am I ready to build it?
23:12
SPEAKER_00: What type of property do I want?
23:13
SPEAKER_00: Why am I buying this property?
23:16
SPEAKER_00: What is my gold?
23:18
SPEAKER_00: You know, so those are some questions that you need to ask yourself.
23:22
SPEAKER_00: You know, what happens if I receive PCS orders?
23:25
SPEAKER_00: What do I do with the home?
23:27
SPEAKER_00: Do I rent it out?
23:28
SPEAKER_00: You know, what's my plan?
23:30
SPEAKER_00: You know, and then another question is just, you know, pass does the property make sense financially?
23:36
SPEAKER_00: Does it cash flow?
23:37
SPEAKER_00: Am I capable of, you know, making a payment if I have vacancies?
23:41
SPEAKER_00: You know, can I help out with the repairs?
23:44
SPEAKER_00: You know, you have to run your numbers to make sense, a pen and a pad or an app, something that makes you comfortable.
23:51
SPEAKER_00: And then question number four, can I afford the property if something goes wrong?
23:55
SPEAKER_00: Build reserves.
23:57
SPEAKER_00: That's all, that's all it is.
23:58
SPEAKER_00: You have to build it because something is going to go wrong, whether it be a HVAC or a flood or anything, air conditioner, something is going to happen.
24:07
SPEAKER_00: And question five, am I making this decision based on strategy or emotion?
24:13
SPEAKER_00: Be honest with yourself.
24:14
SPEAKER_00: If you're buying because you fell in love with a kitchen, that's emotion.
24:19
SPEAKER_00: You know, if you're buying because the property is your financial plan, that's strategy.
24:25
SPEAKER_00: You have there's two different scenarios.
24:27
SPEAKER_00: So you need to talk to your real estate professional so they understand what your goals are.
24:32
SPEAKER_00: One thing I appreciate about my first property is that it taught me, it taught me how real estate worked.
24:38
SPEAKER_00: It taught me what questions to ask.
24:41
SPEAKER_00: It taught me how to deal with tenants and vacancy rate, you know, emergency repairs.
24:47
SPEAKER_00: It taught me what questions to ask.
24:49
SPEAKER_00: It taught me about ownership.
24:51
SPEAKER_00: It taught me about responsibility.
24:53
SPEAKER_00: It taught me that real estate isn't always glamorous.
24:56
SPEAKER_00: It really is not.
24:58
SPEAKER_00: There are repairs, there are going to be emergency, there are going to be things that you didn't think that was going to happen.
25:04
SPEAKER_00: So that's why you need reserves.
25:06
SPEAKER_00: There are expenses, there are decisions that you need to make sure that you understand and you're comfortable with and you have a plan.
25:14
SPEAKER_00: There are surprises.
25:15
SPEAKER_00: There are surprises and they are going to happen quite frequently, but you need to make sure that you're ready for those surprises.
25:24
SPEAKER_00: But I'm not trying to scare you away from building wealth, but I just want to make sure that you know that you have reserves.
25:30
SPEAKER_00: But there are also opportunities.
25:31
SPEAKER_00: And that's why I encourage military members to start educating themselves.
25:36
SPEAKER_00: You don't have to buy tomorrow.
25:38
SPEAKER_00: Start learning today.
25:40
SPEAKER_00: You know, because once you start learning, you have taken the first step to learning and understanding how to build wealth.
25:48
SPEAKER_00: Now, here's where I want you to change your mindset, your mindset.
25:53
SPEAKER_00: Stop saying, I want to be a real estate investor someday.
25:58
SPEAKER_00: No, you don't.
25:59
SPEAKER_00: You're once you pick up the book and once you take the initial steps without signing on the dollar line, buying the actual house, you are a real estate investor.
26:08
SPEAKER_00: You are learning how to be better.
26:10
SPEAKER_00: Start saying, I'm learning how to become a real estate investor.
26:14
SPEAKER_00: That's a different mindset.
26:16
SPEAKER_00: You don't always have to say, because you bought a house, you're a real estate investor.
26:21
SPEAKER_00: You're learning how to become a real estate investor.
26:24
SPEAKER_00: You know, but you're learning, you're studying, you may be a rookie today, you know, but tomorrow in a few years, people come to you and ask you questions.
26:33
SPEAKER_00: That's how they do me.
26:35
SPEAKER_00: You're asking, you're asking the questions now, you're building the relationship now, and you're eventually going to be able to look back and say, you know what?
26:44
SPEAKER_00: I did that.
26:45
SPEAKER_00: I really did that.
26:46
SPEAKER_00: I followed the, I listened, I educated myself, you know, I talked to other real estate investors.
26:53
SPEAKER_00: I remember when I didn't know any of this, and now that's growth.
26:58
SPEAKER_00: So you have to understand this.
27:00
SPEAKER_00: You are a real estate investor.
27:02
SPEAKER_00: Take this first step, read the books about real estate investing.
27:06
SPEAKER_00: And whatever you're comfortable with, that's the second step that you take.
27:10
SPEAKER_00: You know, military real estate rookies, here's something I really want you to think about.
27:15
SPEAKER_00: What if your home you purchased today could potentially become the foundation of your real estate portfolio tomorrow?
27:23
SPEAKER_00: Again, I'm not saying this automatically will.
27:25
SPEAKER_00: You have to evaluate the property, you have to educate yourself like I told you.
27:30
SPEAKER_00: But imagine this: your first purchase for your home, you live there, you maintain it, and you decide if you want to rent it out or just simply sell it and build equity.
27:44
SPEAKER_00: And you learn real estate.
27:46
SPEAKER_00: And that's really, really what it is.
27:48
SPEAKER_00: But you have to take that initial step in order for you to learn those tools, you know, and then you PCS and then you do it all over again.
27:57
SPEAKER_00: Instead of simply walking away from the property, you evaluate whether keeping it as a rental makes sense.
28:03
SPEAKER_00: So I recommend you just looking over your numbers, figuring out your strategy, and then you go back to the next duty station and you repeat the process if appropriate.
28:13
SPEAKER_00: Those are some decisions that you have to make as a real estate investor.
28:18
SPEAKER_00: And then over time, you may potentially build a portfolio.
28:21
SPEAKER_00: That's one of the reasons military real estate investing is such an interesting conversation.
28:26
SPEAKER_00: Your career creates movement, and with the right strategy, the right moment could potentially create wealth opportunities.
28:34
SPEAKER_00: And that's why I like to teach this to you all because I want to share this with all my military community, but I want to slow you down for a minute, a moment, because I don't want this episode to make you feel like, hey, I gotta hurry up and go buy something.
28:51
SPEAKER_00: I'm so behind.
28:52
SPEAKER_00: And like I said before, you're not behind.
28:55
SPEAKER_00: You have to make sure that it's right for you and your family, you know.
28:59
SPEAKER_00: So don't go out there and just buy a house, make sure the numbers work.
29:04
SPEAKER_00: The market isn't going anywhere just because you didn't buy a house this month or the next month.
29:09
SPEAKER_00: Take your time.
29:10
SPEAKER_00: Your first responsibility is understanding your financial position.
29:15
SPEAKER_00: And if you're comfortable with your financing and your financial position, then guess what?
29:22
SPEAKER_00: Then you may want to step this the second step, get your credit in order, understand your debt, build savings, learn your financing options, understanding the market, talk to a qualified professional.
29:37
SPEAKER_00: You have to do this because they have been into this for a very long time and they're experts, then make your decisions.
29:45
SPEAKER_00: Preparation is part of the investment strategy.
29:50
SPEAKER_00: So you have to prepare yourself and look at your whole entire professional and financial responsibilities.
29:57
SPEAKER_00: So here's what I want you to do today, rookies.
30:00
SPEAKER_00: I'm giving you a 30-day military real estate rookie challenge.
30:04
SPEAKER_00: For the next 30 days, don't worry about buying.
30:09
SPEAKER_00: Just don't worry about buying.
30:11
SPEAKER_00: Focus on learning, you know, focus on reading books about real estate, focus on, you know, YouTube university about real estate, and then you make those decisions, what you're comfortable with, right?
30:24
SPEAKER_00: And then week one, learn your financing options, pull your credit report, talk to a lender, understand the VA loan benefits, and speak with a qualified lender about your particular situation.
30:37
SPEAKER_00: And then week two, study your market, look at homes, look at rental properties, look at what actually makes sense renting if you are considering being a real estate investor, you know, because that's very important.
30:52
SPEAKER_00: And then week three, start learning how to analyze deals.
30:56
SPEAKER_00: Just go on realtor.com or Zillow and look at a property, you know, and then run your numbers with it, and then look at purchase price, estimate expenses, estimate rents, you know, estimate, you know, is how long he's been on the market, you know, understanding the difference between, you know, revenue and and cash flow makes a difference, you know.
31:19
SPEAKER_00: So those are some good, good starting points that you need to do.
31:24
SPEAKER_00: And then week four, build your team, start interviewing real estate professionals, you know, start talking to lenders, you know, start talking to other investors, you know, going to events, just getting your feet wet, just to make sure that you understand you're you're comfortable with it and listening to their stories of the do's and adults, you know, talk to property managers, talk to investors, and at the end of the day, at the end of those 30 days, you'll know more than you knew when you started.
31:52
SPEAKER_00: And then, you know, that's progress, right?
31:54
SPEAKER_00: So you're starting to be a real estate investor because you started that process.
31:59
SPEAKER_00: And then my message to you, my active duty members, if you're listening to this day, this episode, while you're active duty, I want you to hear this personally from me.
32:09
SPEAKER_00: As a military previous member retiree, you have a unique career.
32:15
SPEAKER_00: You may have opportunities that other people don't have, but opportunities without education can be a liability.
32:22
SPEAKER_00: So you have to start educating yourself.
32:25
SPEAKER_00: I know it's it's big, but and you're busy, but don't simply use your benefits because they're available.
32:31
SPEAKER_00: Run your numbers, look at your financial picture, you know, sit down and talk with your family.
32:38
SPEAKER_00: Understand how to use this strategically.
32:40
SPEAKER_00: Your BA loan is a tool, your income is a tool, your military experience is a tool, your network is a tool, and your time is a tool.
32:54
SPEAKER_00: The question is, are you gonna use the tool correctly?
32:59
SPEAKER_00: How are you going to use these tools is up to you.
33:03
SPEAKER_00: But you have a chance to build wealth outside the military, and that is one of the key things that I learned while I was in the military.
33:13
SPEAKER_00: So let's bring everything together.
33:16
SPEAKER_00: I bought my first property while I was on active duty, as I let you guys know.
33:21
SPEAKER_00: And that experience taught me that real estate isn't just about building homes.
33:26
SPEAKER_00: It is very much about the ins and outs of running a business.
33:31
SPEAKER_00: It's about understanding opportunity, and it's about understanding risk.
33:37
SPEAKER_00: It's about understanding the numbers, right?
33:39
SPEAKER_00: Run your numbers, and it's about planning for your future, for your family, and building a legacy.
33:46
SPEAKER_00: And it's about making decisions that support your financial goals.
33:50
SPEAKER_00: Those are some big ones.
33:52
SPEAKER_00: And if you're active duty and you're thinking about buying your first rental property, don't start with what house can I afford?
33:59
SPEAKER_00: No, don't do that.
34:00
SPEAKER_00: You need to start with educating yourself about how to build wealth and what type of property that you want.
34:08
SPEAKER_00: What financial future am I trying to build?
34:11
SPEAKER_00: That is the question that you need to ask yourself.
34:14
SPEAKER_00: Then work backwards.
34:16
SPEAKER_00: And that's where the strategy begins.
34:19
SPEAKER_00: You know, a lot of times when you go ahead before first, that's when you make the mistake.
34:26
SPEAKER_00: So take your time slowly, you know.
34:29
SPEAKER_00: So I would like to thank you guys for listening to my episode, Military Real Estate Riggers.
34:35
SPEAKER_00: That's going to do it for this today's episode.
34:38
SPEAKER_00: I hope you enjoyed it.
34:39
SPEAKER_00: I hope you walk away from this conversation, understanding that you don't have to wait until retirement to start learning about real estate investing.
34:47
SPEAKER_00: You know, you can do this now.
34:49
SPEAKER_00: I bought my first property while I was on active duty, and it taught me a lot.
34:55
SPEAKER_00: And if I could give you one piece of advice, it would be this don't rush into it.
35:02
SPEAKER_00: You have to educate yourself.
35:04
SPEAKER_00: Don't chase the house.
35:06
SPEAKER_00: Chase the strategy.
35:07
SPEAKER_00: You have to make sure that you are comfortable with this financial big decision.
35:12
SPEAKER_00: Your first property doesn't have to make you wealthy overnight.
35:16
SPEAKER_00: It needs to make sense for you.
35:19
SPEAKER_00: Learn how to educate yourself about building wealth and meeting people just like you and ask questions, run the numbers and build your team and ask questions again if you don't understand it.
35:33
SPEAKER_00: There's a whole host of things, opportunities out there for military members, but you have to take the first step.
35:42
SPEAKER_00: You know, have you have a plan for your PCS, you know, and have you build that team and don't allow fear to keep you from learning because you can't make an informed decision if you never educate yourself about real estate.
35:55
SPEAKER_00: And remember, you don't have to start with 10 properties.
35:59
SPEAKER_00: You don't have to start with five properties.
36:01
SPEAKER_00: All you have to do is start with one and then slowly but surely build on that and then just keep going and keep going.
36:09
SPEAKER_00: And you don't know have to know about everything.
36:12
SPEAKER_00: You don't need to be, you know, learning about you know all things in one day or one year, and you don't have to wait until retirement.
36:20
SPEAKER_00: Start preparing today.
36:22
SPEAKER_00: And if you enjoyed this today's episode, please take a moment to leave me a five-star review.
36:29
SPEAKER_00: Your reviews help other military members and veterans find my show.
36:35
SPEAKER_00: And if you know a service member, veteran, or a military spouse who has been wanting to build wealth and talking about getting to real estate, share this episode with them.
36:50
SPEAKER_00: I would love to connect with you personally.
36:53
SPEAKER_00: Follow me on Instagram at Rena Baron Real Estate, or you can reach me by email at renabaron realestate at gmail.com.
37:04
SPEAKER_00: And I thank you all for supporting my show.
37:08
SPEAKER_00: I really appreciate it.
37:10
SPEAKER_00: I'm your host, Rena, and this is the Military Real Estate Rookie show.
37:15
SPEAKER_00: Until next time, take care of yourselves and take care of those men and women who support you.
37:22
SPEAKER_00: Keep learning, keep building, keep investing.
37:24
SPEAKER_00: Rena Barron out.