#006 Monterey: What Can I Afford PCSing to Monterey?

Navigating Real Estate Affordability for Military Officers: Insights for PCSing to Monterey with JD Kameen

Host: Grant Vermeer

The USNA Property Network Podcast, sponsored by the Vermeer Group, provides educational content about neighborhoods around military bases for Navy and Marine Corps officers planning a Permanent Change of Station (PCS). 

This episode features a conversation with JD Kameen '15, a Naval Academy graduate, former United States Marine, and the head of Naval lending at You Mortgage, discussing how military officers can navigate buying a home in the Monterey area, focusing on loan qualifications based on pay grade, BAH, and other financial considerations. The podcast aims to assist listeners in their PCS preparation to Monterey by offering insights into the real estate market, loan application process, and the benefits of homeownership for military personnel.

00:00 Welcome to the USNA Property Network Podcast
00:58 Introducing JD: From Military to Real Estate
02:02 JD's Journey: Military Challenges and Transition to Real Estate
04:55 The Birth of the USNA Property Network
05:34 Understanding Home Buying for Military Personnel
07:22 Navigating the Monterey Real Estate Market
18:57 Insights on Home Buying and VA Loans
24:12 Closing Thoughts and Appreciation

The Vermeer Group matches military families with real estate teams that we personally trust across the nation.

As a military spouse, I've learned something crucial about building a sustainable business: geography can't be my limitation. Instead of trying to be the realtor in every new market, I became the guide who connects military families with the best local experts wherever they're headed.

Please reach out if you have any questions at all or I can help connect you to trusted real estate professionals nationwide. I get calls, texts and emails everyday from families just like yours, looking for help on making their move and buying/selling their home - and I absolutely love it!

Connect with Grant on Linkedin or contact him:
📲 Call/Text Direct at (650) 282-1964
📲 Email: grant@thevermeergroup.com
eXp Realty, LLC | TREC License #769356

Transcript

USNA Property Network Podcast Episode - with Guest JD Kameen '15

Grant Vermeer: [00:00:00] Welcome to the USNA Property Network Podcast powered by the Vermeer Group. The USNA Property Network podcast educates military officers on the neighborhoods surrounding the military bases in which they could PCS. Our mission is to provide genuine, authentic, informal conversation that's going to help Navy and Marine Corps officers start their research into their new home.

This podcast is made possible thanks to the sponsorship of the Vermeer Group. Vermeer Group is a residential real estate team that specializes in helping Naval Academy graduates and other select clientele move to both Monterey and San Diego, California. If you have any real estate questions at all, please reach out to me directly at grantatthevermeergroup.

com. I'd be more than happy to help. Thanks.

The goat of all goats, [00:01:00] the godfather of the USNA property network. We got JD joining us today. This episode's gonna be a little bit about what, about what your lending situation looks like in the Monterey area. If you're at NPS, you know what the BAH is, what your base pay is, what in general you are looking like you could qualify for.

If you've listened to some of our previous episodes and you've, you know, distinguished, Hey, I may actually wanna try and buy out in the Monterey Peninsula area, then this episode's gonna help you put into perspective what you could look at. In terms of qualifying for a home loan out in the area. So I hope you're able to get a little tidbit of information.

This helps you in your research and preparation for PCSing out to Monterey. If you have any questions about your specific situation, feel free to reach out to me, Grant in the Vermeer group. com. I'd love to help and see how I can work with you in your situation. Really appreciate it. Enjoy. Hey, JD, thanks so much for coming on to talk to us today, man.

Really, really appreciate it. Of 

JD Kameen: course. Happy holidays and happy crazy Monday in this ever changing real [00:02:00] estate market. 

Grant Vermeer: Indeed. Just for a background, if anyone, I mean, I'm sure everyone's aware of you in the US and a property network group, but if they're not aware, do you mind just giving a little context and background about one, your military career, and then two, your shift into what you're currently doing?

JD Kameen: Yeah, I'd love to. Proud graduate of the class of 15. I didn't originally get in. I had to do a, uh, red shirt track year kind of at the Valley Forge military college. It's my first race at Navy. I re injured myself totally like making that one year red shirt. You're totally obsolete. Study political science there.

I graduated with a 2. 74, I think, not the most stellar GPA. 

Grant Vermeer: That's a degree, baby. 

JD Kameen: Survival mode. I grew up in Baltimore, so, you know, I always loved the Naval Academy and things like that. It really drew my attention there. And then I went marine aviation and after TBS went down to Pensacola, Florida, I got married to my next, growing up next to basically my college sweetheart, Liza.[00:03:00] 

We both moved down to Pensacola, started aviation training, everything was normal. Went through primary in the T6, which is the fixed wing platform, and then went into advanced for helos. And during that pipeline came down with a pretty rare nerve disorder in my face and had to get a bunch of surgeries.

And was medically dropped out of aviation, so I think there's some really good talking points in here about all of that, because it really could happen to anybody. 

Grant Vermeer: Sure. 

JD Kameen: And then, uh, went out to be the public affairs officer for 1 Marine expeditionary force, which is aboard camp Pelton for about 4 or 5 years, somewhere in there.

It was really great. We loved it out there. Wish we had bought in San Diego and I kick myself every single day. I think we paid the equivalent of like a Ferrari and rent that period of time. It was hellacious. And then. Got out of the Marine Corps, was medically retired, and we decided to buy a multifamily property with our VA loan, with no [00:04:00] experience, had no idea what we were doing, don't even know why we gravitated towards multifamily, back in Pensacola, Florida, and it was during COVID, so we just spent the COVID times renovating the property heavily.

And mostly DIY and I kind of documented that journey on Facebook and it was just a blast. And then I got, I was getting so many messages during this whole time where I was documenting like, you know, turning things into Airbnbs and doing renovations and things like that. And, you know, Naval Academy grad.

I'm pretty familiar with Pensacola because we, there's so many of us down there and we did some meetups and people would come over to my house and we'd walk through and they were like, why didn't we talk about this stuff at Navy? This is insane. Like we never talked about real estate. We during commissioning week or leading up to commissioning week, you have classes on uniforms, you have classes on everything outside of your biggest expense, which is going to be real estate.

Why didn't we talk about it? So literally one day I just decided to start a USMA property network page on [00:05:00] Facebook. And I think, you know, we had maybe a thousand people by day two. I mean, it was, it was awesome. And I think it was just a total shared interest in something that we didn't get any direction on when we were young officers.

And I think finally, now we have a pretty cool community of people that are at different phases of their real estate journey from trying to buy their first house to like Henry Russell, who has 300 million under management in San Diego. So it's really a diverse group. I think that's me in a nutshell.

Grant Vermeer: Yeah. Super fun, diverse group. I think that's really cool. And, and I appreciate you letting me come on and be a part of this team. And you're saying really focus some content on like directed towards the person who may be interested in buying their first home, right? Like we're not, we're not talking to the person who is an experienced real estate investor or going to do all these crazy things.

We just want to help educate here on people, PCSing to a new place for the first time, trying to figure out whether they want to rent, whether they want to buy. And go, so 

JD Kameen: it's so well said, because I think another interesting part of the [00:06:00] group is like, there is an aspect that's sort of focused on financial freedom, like, you know, Airbnb and things like that.

That's not everybody in real estate. You don't have to do that. You can be like, dude, I never want to own an Airbnb in my life. That sounds horrible. And a lot of cases, it is, you just want to buy your first house. We should have had a class on that in 82. I mean, it's, it's super cool. 

Grant Vermeer: No, absolutely. I appreciate you doing this.

And then do you mind just telling people what you do for your day job as a, as a loan officer? 

JD Kameen: Yes. I'm the head of Naval lending at a mortgage company called You Mortgage. Um, it's still sort of in the startup phase, but it's really cool. Cause we have a lot of flexibility. It's kind of a mix between a brokerage and a retail lender.

And we come with pretty powerhouse team and 2022, me and my partner, Pat, and did the most VA loan originations in the United States per the Scotsman guide. If anyone knows my personality, that's the farthest thing from a gloat. That's quite literally just to [00:07:00] say that we have so much data now that we can look up transactions.

Spanning back years and there's hundreds and hundreds of, you know, VA loan products that are low transactions that we can review and see, you know, market trends in different coastal regions. It's super cool. So that's one of the main benefits is that we just have this like vast array of data now that we can look into.

Grant Vermeer: No, that's, that's super awesome. And so as we're, we're going on to this kind of final episode in this series about Monterey, about the Naval Postgraduate School, about DLI, you know, we've had people on previously talking about the different neighborhoods. We've had people talk about renting in Pacific Grove, in the city of Monterey.

We've had people talk about buying in Seaside, buying in Marina. And kind of why I want to talk to you about today and just have for someone who may be moving to Monterey for the first time is, you know, What could they qualify for right if they kind of have this discussion and we're talking and they're like, Hey, you know, I actually want to consider potentially buying the seaside and marina area or whatever the case may be, what would I qualify for?

So thank you so much for joining us today. [00:08:00] And I just kind of want to take a high level view of what different pay grades may be able to qualify for an out Monterey again. Based on BAH base pay and we'll kind of use some certain assumptions that I'm sure that you'll, you'll go over here in terms of debt and whatnot.

JD Kameen: Yeah. I mean, it's very refreshing to work with a real estate agent that even understands veterans and PCSing officers and things like that. If you think about like how big the real estate industry is. So few people even know like how to go through a VA loan with a buyer and you do it weekly for people in Monterey.

So that's super cool, which is probably gonna allow us to have a very good conversation. And like everything on the mortgage side, it just depends. And people I think can qualify with the VA loan typically a lot more than they expect. And it doesn't necessarily mean that you need to overspend. They should.

But the debt to income standards are pretty flexible with [00:09:00] VA loans. We typically don't look for in PCS and Naval Academy graduates. We don't really look for a set debt to income ratio that we're trying to keep them under. And for everyone listening debt to income at a high level, it's just the amount of money coming in versus the amount of money going out on a monthly basis, which is how we kind of determine some underwriting standards for the VLM.

So let's take a typical Naval Academy graduate. Oh, three. Yep. Getting orders to 

Grant Vermeer: NPS, 

JD Kameen: just without even looking at their file, I'll know that they have a gross income of 10, 676 before we go into that move. And how we get to that number, and that differs from what a lot of people think, it's typically higher than what O3s think they make in California.

Grant Vermeer: Sure. 

JD Kameen: Basic housing allowance has been untaxed military benefit. So if you were a civilian [00:10:00] and you were getting a direct deposit every month for what the equivalent of BAH would be, you 

Grant Vermeer: would 

JD Kameen: have to earn. An average tax bracket, 25 percent more than that to actually take that home. So right off the bat, just basic housing allowance alone, you're making.

25 percent more than you think. 

Grant Vermeer: Yeah. And that BAH for Monterey, if you're a single O3, no dependents, right? Again, we're kind of using this case example of person who just finished their, their C tour, they just put on O3, they're going to NPS for their short tour. Right. That BH is 3, 366, right? So likely going, likely going and likely going adjustments.

JD Kameen: So that's a big chunk of change. If you're going from somewhere like, uh, Pensacola or Jacksonville, but obviously the cost of living adjust with it. So. And talking about that 20, you making 25 percent more than you think that is not in any way advocacy for overspending. It's just the reality. That's how a mortgage professional looks at [00:11:00] the way you make your income.

There's another benefit to this whole PCSing thing that I think we should talk about because I obviously I do a lot of loans for just conventional buyers. Let's think of like a lawyer or something like that. Sure. It is so rare that when you're young and let's call it late twenties, early thirties. To get orders and we can already predict what your income will be months in advance it is such a benefit because It allows you to kind of look at your horizon be like, oh, I do want to buy in monterey And I can start planning on that if I was doing a mortgage file for A lawyer or something like that.

There's so many variables that can change and really screw up in underwriting or during escrow as they're waiting for offer letters. How's the offer letter written? What is the tax basis? Are there holdbacks and things like that? But we know if you're an oh three and you're going out to Monterey from a high level, We already know your income [00:12:00] is going to be, it allows for planning and it's just, it's such a benefit that people don't talk about.

And for people that are interested in accruing properties in different coastal regions or things like that for their real estate portfolio, that is super cool because you're literally getting forced into some of the coolest spots in the world and you have a reason to go and you have income that follows.

It's pretty 

Grant Vermeer: neat. 

JD Kameen: But from a first time home buyer perspective or a second time home buyer, in this case, let's just. Use an example that you've never used your VA loan before. Most O3s graduated from Navy and by then they've already paid off their career starter loan. 

Grant Vermeer: Yep. 

JD Kameen: So, or they're in their final stages, they may have like a month or two left.

So that debt usually falls off. Most kind of the typical person going to keep, uh, Naval postgraduate school has like some revolving debt, you know, some credit card stuff. Like we all do. They've got a car payment, maybe some student loans if they're [00:13:00] married or something like that, but pretty typical stuff.

And so most of the time you want to keep your, your housing expense, a certain percentage of your total monthly income, depending on what type of like financial strategy you come from. I think there's people on the internet that are like, you got to keep your housing budget below. You know, 25 percent never use debt.

It's like pretty polarizing stance, but on the other side, there's people like take on maximum debt by as much as you can. I think most people that are going to NPS kind of fall in the middle and they want to a comfortable housing expense every month without overdoing it. And they can probably afford, you know, if it's a single family house, they can buy in the sounds crazy, but you know, 600 million range and it actually falls in line with their income.

Grant Vermeer: Yeah, absolutely. And I think that's generally again, when we talk about the Marina seaside area and Monterey in general, There will be homes, especially in Seaside and Marina that you can find in the 600, 000 to mid [00:14:00] 750, 000 range. Right. Again, if you start, if you start getting into Monterey proper, you're probably looking in the high eights to nines on the low end.

Right. And so that's where you can start to push it a little bit, but that's kind of what I wanted to bring on is people assume Monterey is extremely expensive, which it is, but also The opportunity exists to buy a home if you do want to, right. And that's kind of what we're, what we're getting to on that standard.

JD Kameen: I think like when I was at Oh three, I, of course, after I got out of the Marines, I wish I had bought in California pretty much anywhere, just cause it is appreciated so much, but I just didn't know enough about the other benefits of homeownership. Like after you depart the residency, if you turn into a rental, like the amount of tax benefits that come with that.

So there's a lot of other like. Economic factors that you need to weigh up of the kind of the whole decision. 

Grant Vermeer: But 

JD Kameen: it's pretty rare that you get orders to some of those sweet spots. And, you know, [00:15:00] Monterey is definitely one of those sweet spots for, for Naval Academy grads. It's cool. It's like Hawaii, San Diego, Monterey.

Those are like really sought after markets for ownership. It's pretty sweet that we 0 percent with a VA loan and do it. 

Grant Vermeer: No, absolutely. And then just kind of, just to flip to another common person who may be coming to the academy, let's say it's now a married O4, they just got done with their department head tour.

They're coming back to get their master's, you know, whether it's a milestone to put on O5 or whatever the case is, they've kind of hit this point. Let's use for an example, a married O4. Right. What kind of, obviously like you're saying, it's very dependent, very situational based on that individual, but a rough estimate of, of where they could be looking at.

JD Kameen: That's one of those pay grade and lifestyle changes that results in one of the biggest increases in buying power. 

Grant Vermeer: Sure. 

JD Kameen: In most cities, it's like a 40 percent increase by the time you get to 04, time in service. And if you have a [00:16:00] dependent or you're married, all of a sudden you're bringing a gross income of closer to 14, 000 in Monterey.

And that's just one income. A lot of the times, you know, there's, it's a dual income situation and there's even more. And I think if you were a firstie and you heard those numbers, you can't even fathom making that much in a month. Cause if you made a hundred dollars a month, you're like, I, you know, if I was making 14, 000 a month, I would be like, it would, there would be cash stacking up every single part of my house.

But it's true. If you, that's one of the great reasons why if you stay in the Navy or the Marine Corps and you have that type of earning power through your thirties and forties, that's going to be the biggest instrument towards building an awesome retirement. You don't need to get out of the Navy. To be a higher like you can earn, you know, really, really solid incomes by staying in and going to really cool places like Monterey.

So all of a sudden, I mean, if we could add probably 40 [00:17:00] percent to our original estimate and you can buy anywhere in the, and you and I have, have worked with Naval Academy graduates married or fours and they buy in the 800, 000 to 1. 4 range, especially if that's a pretty common zone that we'll see them in.

Grant Vermeer: Yeah. No, absolutely. And there are, yeah, I would say in that, like just over 1 million range, especially in the Marina area, some brand new, beautiful new construction homes, right? Because again, when we talk about pros and cons, and you know, we've talked about this in previous episodes, so I won't go on too much, but inside the peninsula, Pacific Grove, Monterey seaside, it's really tight.

It's cramped. It's a, it's a coastal town. It's a small town feel, you know, areas are small. And so it can be a little, well, you use like tight, right. For a lot of individuals. And so getting up into the marina area can be great. And like you're saying, tons of beautiful, brand new, new construction with yards, more space that can really hit that, that 

JD Kameen: just for me, that would be a no brainer.

Like if I was going to NPS, like by then, if I was, if [00:18:00] I was still in the Marines or whatever, I'd have a spouse that's working and I'd have two kids, two dogs, And probably because my wife works, we'd probably have a nanny that came during the day who's truly part of our family. And so we need more space.

So if it's, if we're looking for it to avoid tight, I would have taken your recommendation as my realtor to like, can you help me because this is a lot of baggage that I come with. 

Grant Vermeer: Yeah, no, no, absolutely. So I appreciate kind of that, that insight. And again, it's not for everyone. We've talked to a lot of people on, on this episode where renting was the appropriate option for them and they really love it.

And so, so that's great. I just want to make sure that, that people know that it's possible, right. In Monterey, if that's what you want, right. And so that's kind of where we're getting to. And we, we talk a little bit, as you mentioned about the different factors in, in considerations that go into a file.

What factors were you mentioned to someone who's like, [00:19:00] hasn't bought a home for the first time thinking about getting prequalified or whatever? What factors go into the prequalification process? And what do I need to be thinking about or considering when it comes to a loan application? 

JD Kameen: That's a really good question.

So I think when you hear VA loan, because we didn't have any classes on it, maybe. And there's still misconceptions out there about what it actually is. You can go all the way down to 0 percent down payment, which means equity in the home. It does not mean that you will not have closing costs to take into consideration when you're moving to moderate.

There are things when you're buying a house that fall outside of putting equity into a home. And it's quite literally taxes, paying your first year of homeowner's insurance up front, appraisal fees, homeowner's inspection. And then you have to actually pay for the title attorney to do 30 days of work to make sure that the property you're buying is all [00:20:00] accurate.

All the information is accurate. So we can add up, you know, in California, that's one of the lowest. Areas for closing costs, like in the country, typically it's between like one and one and 2%. If you buy a, if you're a second time home buyer in Virginia, it can be, you know, three to 4 percent of the whole purchase price.

So I think because we didn't have a lesson on it, sometimes people will go into a situation where they're buying a home and they expect to quite literally come out of pocket. If the deal isn't structured where closing costs are covered in another fashion, it's going to be zero cost to get into a home.

And in most cases, it's not the case. Sometimes that there's a few percentage that you should have in savings. Other things that, um, that really impact your, um, your home buying process. And I'm a perfect example of this. I missed a mortgage payment on my first house. So what that does is I, I thought I had paid my [00:21:00] October mortgage payment.

Um, you know, on the first of the month, I didn't know that I was actually paying my September payment. I was a month behind. It just, it slipped. We just had a baby. I know this only applies to people that have owned a home before. But if you missed a mortgage payment, you really typically, you can't buy a house for six months, a year, sometimes even more, it really has an impact on your credit for first time home buyers.

That won't be a problem, but the same thing applies to credit cards. So I also have a missed MX payment from when I was active duty, we went to the field. I wasn't around my computer. I can get to my cell phone and I missed MX payment. That's a little bit more flexible than a missed mortgage payment. But when I went to go buy my first home and I had a missed MX payment.

It makes your loan terms a little bit worse because your view is a little bit higher risk. So, you know, I think when we bought our first house, interest rates were really good, but I was a little bit higher than most people because I had had a missed credit card payment [00:22:00] and other things that could impact your buying power.

If that's something you're looking at, like, let's say you are a married Oh four and you're looking to make, you know, sizable purchase in Monterey. Not having a lot of revolving debt typically helps like 20, 000 on a credit card, which isn't hard to get to when you're PCSing and moving and life gets crazy.

It's not that hard to get to 20, 000 between a couple of credit cards. So just keeping an eye on that as you're within six months to, you know, three to six months of potentially getting pre qualt is, is pretty important, not missing any payments, not stacking up a bunch of revolving debt, having some cash on hand, just like in savings is typically good because it just, it makes your file look really good.

Grant Vermeer: Yeah. I would also follow up on, on just the cash on hand from, from the realtor side is you need to protect yourself, right? We kind of. It's always my number one warning I give to people when they buy a home. I was like, Hey, when you buy a home, just based on Murphy's law. Like something's gonna [00:23:00] happen.

Something's gonna happen. Right? Because the moment you become a homeowner, you're now responsible for everything that really happens in that home. Right? And so, a pipe's gonna burst. I think you were saying you were having a fridge issue the other day, just like water going all over the place. 

JD Kameen: Dude, yeah, we were supposed to have this, we were supposed to talk yesterday, and I got home from church and uh, Our fridge stopped working, everything melted out on the kitchen floor.

And it's just like, that's, 

Grant Vermeer: that's 

JD Kameen: like a 2, 000 surprise. And most Naval Academy graduates and hosts, first time homebuyers. They're quick to address those things. If something goes wrong, you know, more seasoned people in real estate that maybe have a couple of properties. So like, ah, there's a leak in the roof.

I'll get to it next quarter. It's not causing any issues. 

Grant Vermeer: If 

JD Kameen: you're a first time homebuyer, you're usually a little bit more quick to react. So having cash on hand is good. So if the furnace goes out or whatever, 

Grant Vermeer: you know, 

JD Kameen: you have some money to make those fixes. Yeah. It's not covered by, you know, home warranty.

Grant Vermeer: Home warranty. Exactly. [00:24:00] Um, no, amazing. Uh, Hey, I, I'm trying to keep these, these episodes probably in the 20 to 25 minute range, not to overdo it for people, but just give them a, a brief in, Uh, like intro. So I think this was, I think this was really great. Do you have anything that you want to kind of leave as a parting thought or anything you want to wrap up with for, for anyone listening?

JD Kameen: I'd just like to say, uh, thank you. I know a lot of effort goes into this and, um, it's so cool that I feel like finally we have a network of Naval Academy grads, a lot of us speak the same language and for like the first time now you can on deployment. Get pre qualified by another Naval Academy grad, talk to another Naval Academy grad realtor.

And you know, like we've all felt that sense of calmness on the other side of the email line. And you're like, Oh, I remember him from whatever. I remember her from rolling tray that day. I sat right next to him. It's pretty cool. It's a, it's a good, it's a good But you can literally say things that other real estate professionals [00:25:00] just would not understand.

You're like, Hey, I'm in the skiff for the next 12 hours, I got overnight OOD, I can't fill out this paperwork. To most people that's like, what did this person just say to me? And it's, it's, it's really cool that now that that's kind of solved. 

Grant Vermeer: Absolutely. Well, I really appreciate one, what you've done with the, the, the property network and allowed me to kind of take this, this tangent of it and, and, and make the energy to do it.

And so, so thank you so much, dude. And for anyone who may have questions about their specific situation, again, you're getting ready to PCS to Monterey or, or anywhere, and are just wondering, Hey, what would my back buying power look like? So I can start to get a sense of is renting or buying. The right decision for me and what I'm comfortable with, please shoot me a message again, Facebook, Instagram, uh, email grant at the Vermeer group, or reach out to JD and we'll make sure to get you taken care of roll goats, roll goats, baby.

Always a pleasure having JD on [00:26:00] with us. I hope this was an interesting conversation. Informational and entertaining episode for anyone listening. And I hope this helps you in your journey of doing research and preparing to move to the Naval postgraduate school out in Monterey, California. If you have any questions or anything about your specific situation, feel free to reach out to me, Grant at the Vermeer group.

com. I'd love to learn about you a little bit and see how I can help. Appreciate it. Thanks for listening. And I hope you have a great day. Always a pleasure having J. D. on with us. I hope this was an informational and entertaining episode for anyone listening, and I hope this helps you in your journey of doing research and preparing to move to the Naval Postgraduate School out in Monterey, California.

If you have any questions or anything about your specific situation, feel free to reach out to me, Grant at TheVermeerGroup. com, I'd love to learn about you a little bit and see how I can help. Appreciate it. Thanks for listening, and I hope you have a great day.