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Changes (and Decisions) Abound

May 24th, 2019 at 01:47 pm

As is typical with military families, we're once again entering into another round of life-contorting changes. I'm up for my next assignment, and the most likely locations are scattered around the world... Germany, Italy, Saudi Arabia, Korea, Arizona, Colorado, or Idaho are all on the table, and we should find out exactly where we're headed next within the next month, with the actual move probably sometime in Oct/Nov. I also just signed a contract to stay in the military for another 5 years, but it did come with an annual lump-sum $20k/yr bonus, so we're going to use that money to help us with our upcoming move & our to-be-determined housing situation (more on that to follow).

As for DW, she was just medically retired from the military in April due to some mental health issues (she's now mostly doing better, gratefully, but was disqualified from deployment & therefore got the boot). She's struggled with accepting the abrupt end to her military career, suddenly becoming a SAHM, but I'm slowly convincing her that it's really a good an opportunity for her to pursue her actual passion, to become a physical therapist. She's been taking a couple pre-req classes, and soon she'll start shadowing the physical therapist on base to regain some recent experience, then depending on where my next assignment takes us, she'll be applying to schools for earning her DPT. Financially, we're in a good place for it -- she gets a small retirement/disability pension from the military, plus she's got the Post-9/11 G.I. Bill that should cover most of her costs. I'm excited for her, and as long as we can keep her focused on that end goal, I think she'll end up very grateful for this opportunity.

The other big change (or decision, really) on the horizon will be what's going to happen with our current house. We like our house, it's in a great neighborhood, and we'd love to come back to live here in Alaska at some point in the future. We also love the idea of building a small portfolio of rental houses, and currently have one in OKC (our previous assignment) that is doing very well. However, this house is double the value of our other rental, we still owe $279k on it, and our total PITI (not escrowed) is ~$2700/mo. Realistic rent for it is probably between $2500-$2600/mo. So the cashflow would be tight, particularly in vacant months. One option we're considering is to recast our incredible 2.375% mortgage, and doing so with a $50k-$60k payment would reduce the payment to $2200-$2300/mo, which would make it much more manageable. The ROI isn't phenomenal, but we'd be looking at ~12% IRR on it, so not terrible either. On the other hand, if we just went with selling it outright, we'd probably do no more than break even (perhaps even take a "small" loss of $10k-$15k. We're starting the conversation with our realtor friend, and we may end up just dual-listing it (sale or rent), and take whatever bites first that looks good.

On the back side of the upcoming move, what's next? Buy again, or rent? Between our cash & investments, we'll have at least $40k-$50k available regardless of what happens with our current home, so that should probably cover at least a 20% downpayment if we do buy another home. However, depending on the location, just living on base & renting might not be a bad option either. We'll have to evaluate it carefully once we know where we're going. I really like our current rental, and I'd like to keep some property here in Alaska (either this one or a different place)... But I don't want to overextend us with rentals dotting the country. Once I eventually leave the military and we settle down in one place, I'll most likely sell everything and rebuild the real-estate portfolio locally (whether that's here in Alaska or perhaps elsewhere).

Who knows what the next few months/year will bring for us... Alot will be driven by the location of my next assignment. I hope they release our assignments soon!