Newbie from Oahu Hawaii

[Allyn Wijnveldt]

Hi everyone, I’ve lived on Oahu all my life. Have a degree in accounting from UH, realized I couldn’t do that everyday, so continued to work in the automotive field during and after college. Still doing so today. I was lucky enough to chat with this one customer at the repair shop I used to work at......you know, the type who has more time than they know what to do with? Later I found out he had this freedom through RE. While that did start to get the wheels turning (didn’t really have any direction), it wasn’t until my (first one with the wife), 3rd property (first investment was in Guam where I learned that negative cash flow is no good, 2nd property was a townhouse), where we lived in one unit and rented out the other, did I realize how awesome passive income is! It took a decade, but better late than never. My wife and I have learned so much from our 3rd property purchase. We rented the larger top unit and lived in the small 1/1 and planned to do so for a year. Foundation repairs extended that to two years. We lived there with a non/functioning oven, a kitchen the size of 2 airplane bathrooms, for two years. While living in the small unit downstairs, we went through some noisy tenants who kept us up all night and racked up utility bills, to tenants who never got along, had three times the number of cats stated on the lease, to one of them spying on each other with a hidden camera! We have learned so much in these last few years. I’m posting here so I guess I’m a glutton for punishment or don’t know when to quit, lol. Today, the small unit is fully renovated and expanded to a 2/1.5, and we’ve had a great tenant in there for over a year. I first heard about BP from one of our good friends. We both always talk about escaping the rat race. We recommended they listen to a financial presentation we had just learned about. They actually signed up before we did, took the lessons learned and used their equity and have grown their RE portfolio quite a bit in the last few years. I couldn’t be happier for them. However, I’ve never really been happy with our current pace. It’s been four years since we bought the place, and we have yet to add another. While it is really expensive here, listening to podcasts, particularly David Greene’s one’s, kinda relit the fire so to speak. An expanding family, a demanding job, and the price of RE here do make things difficult, but at the end of the day, they are excuses. In my free time I like to spend as much time (which isn’t much these days), in the water as I can. Surfing, swimming, and teaching my kids to appreciate the ocean and all it has to offer. If it wasn’t for the ocean, I likely would have left this place long ago. I do like learning about real estate, investing, and going to open houses, even though the numbers here are high. Well, that’s all for now. If anyone needs any tips on where to eat here or where to stay, I have this island dialed.

[John T.]

Hafa Adai, Allyn!  Welcome and glad to meet another BP member dealing with an expensive market.  I'm actually from Guam and invest here.  What was your reason for investing in Guam.  I read you had negative cashflow.  Would you mind sharing a bit more about your first investment property here?  Im curious about what part of the island you selected and what your numbers were.  Maybe I can provide some perspective.  Thanks!

[Clayton Mobley]

@Allyn Wijnveldt Welcome to BP! Living in HI, you will almost definitely need to invest out of state if cash flow is your focus. Luckily you are absolutely in the right place to learn all you need to know about which markets flow well, what types of investments are available to you, and which might be best suited to your situation and goals. I'd recommend setting up a bunch of key word alerts, some with increasing specificity. So if you like the Birmingham market (ok i'm biased) and multi family rentals, set up an alert for both terms concurrently (not just one for Birmingham and one for MFR), so you'll know when someone is talking about the exact investment you're considering.

Once you have an idea of what strategy you want to pursue, get active on the forums! Ask questions and reach out directly to people who seem to have valuable experience. Many people are more open and honest via PM than they can be on the forums, so if you see someone who has knowledge you need, message them directly - the worst thing they can do is not respond. 

Best of luck in your new adventure!

Clayton

[Allyn Wijnveldt]

Hi John,

The problem with that first deal, is that no numbers were run. An acquaintance was investing in Guam in 2007-2009 in anticipation of the military moving into Guam.

The condo I purchased was in Dededo.

I didn’t know about RE analysis, so I was negative cash flow the whole time for several years. It was just, I’m buying over hear because of X, you should too. I didn’t think that perhaps this wouldn’t work out for me.

After several years, I sold it, luckily it was occupied most of the time.

I learned a lot. Basically the negative cash flow was hampering my ability to buy a SFH home here on Oahu. I haven’t looked back since. Maybe the numbers have jumped quite a bit, I don’t know. I did leave quite a bit from it.

Hope this helps.

[Chivas Miho]

Aloha @Allyn Wijnveldt!  Been here on Oahu all my life as well.  It's good that you had the initial experience house-hacking, one step ahead of many people on the island.  I've tried searching for properties on both Oahu and Maui but can never make the numbers work, always negative cashflow.  I can't tell you how many times I hear people looking to buy a 2nd condo, lose at least a couple hundred a month (without even accounting for any vacancies or repairs) and they believe its a great investment by gambling on appreciation.  For people like us, out of state rentals are a best chance at success, just need to do your homework, stay motivated, and take action.  I myself just closed on my first OOS rental last week.  Now I've caught the bug and looking for the next deal.  Good luck, let us know how it goes!

[Allyn Wijnveldt]

Howzit! @ Chivas Miho.

That’s great to hear about your OOS deal.

I agree, the only things that might pencil here are older homes that maybe multi-unit already. Unfortunately the entry price now seems to be $700 plus for a decent neighborhood.

Now to find that state I wouldn’t mind visiting that happens to have low cost housing and an ever increasing population.

[John T.]

@Allyn Wijnveldt I see. Sorry to hear that. The numbers here are a bit tricky. The only way I've found to get the best cashflow is to target rentals preferred by military personnel. However, even with that, the numbers rarely meet the 1% rule. I've been considering construction and just create the equity, but with the whole h-2b visa issue...not feasible at the moment. Anyways, good luck on your future investing. If you're ever considering investing on Guam again, I'd be happy to share some of my thoughts on the market. Aloha!

[Lane Kawaoka]

Allyn Wijnveldt I live in Salt Lake let me know if you want to connect.

[Duc Ong]

@Allyn Wijnveldt I'm an investor and realtor in town.  Let's grab coffee some time and chat about investing!

[Mike Darcey]

@Allyn Wijnveldt There are a bunch of us in Hawaii who are mostly doing out of state investing, and a few folks I know who are doing in state investing but mostly fix and flips as you already know the pricetag here is pretty darn high. Would love to meet up with you as well as with the other folks. Seems like the one with the most traction for setting up a meeting is Lane Kawaoka who has a meetup scheduled through the Facebook group REI 808. I am trying to get my team to go to one of their events in the near future. I think Lane is setting up for mid January. @lane kawaoka is that right?

[Lane Kawaoka]

Mike Darcey yups

[Billy San Roman]

Aloha @Allyn Wijnveldt thanks for sharing your story as it generated some great responses that I was able to learn a little bit from as well. I moved to Oahu a little more than a year and a half ago and have recently been "bitten" by the RE bug. Right now just trying to read as much as I can in books and on BP to gain some insight. I have not yet done my first deal but hope that will come this year after some more education and networking. Do you attend any of the HIREI meetings? That was going to be my next step to getting more involved in the community.

[Allyn Wijnveldt]

Hi Billy San Roman,  

I haven’t attended any at the moment. Work keeps me very busy and there is precious time left for my family after that. 

Im working on ways to be of value since I don’t have too much time. My wife is an RA but hasn’t been active as of late since she’s raising the kids.  

I too am brushing up on what I can, meeting with local groups, playing cash flow, etc. 

This is an awesome community to be a part of though!  It’s nice to converse with like-minded individuals.  

[Odie Ayaga]

Jambo @Allyn Wijnveldt! (I figured you've probably gotten enough alohas)