All Forum Posts by: Bryan Vukelich

Aloha @Keaton Hill

First, regarding your question about the type of loan to purchase a property.  If you plan to live in the property and can qualify, you would get a conventional loan which offers the best terms.  If at any time you decided to vacate and rent out the property, nothing changes about your current loan.  Just know for tax purposes, if a home is your primary residence for 2 out of 5 years, you qualify for a $250k tax exemption as an individual.  But once you rent out the property, you can also do a 1031 exchange and roll the funds into a new investment property if you want to avoid paying capital gains at the time you sell the property. 

And $10k is a great start.  I am unfamiliar with the market in Oklahoma, but if you need additional funds, maybe consider partnering with a family or friend.  Or post on BP looking for investors.  My belief is that if you find a truly good investment opportunity, you can find the money to make the deal happen.  And you don't need any money to get a deal done and get equity in it.  One example: I was once contacted by a BP member who had an off-marketing multi-family opportunity where purchase price was $5M.  The deal was quite attractive and he wanted a 20-30% equity stake in the investment for being the "deal finder" and initially would not be investing any of his own money into the deal.  

Another way is to use hard money. Some just simply look at the financials of the deal and don't look at your credit score or assets. I've personally used hard money to close a deal very quickly and I've had clients also use them and it has worked out well. And also, as Alex mentioned, there is the DSCR loan that would offer better terms than hard money.

Wish you well on your real estate journey - happy to answer any other questions you have - I am here to serve you.  

@Jack B. 

I agree with Bjorn.  Recommend you ask the listing agent for the actual last year and YTD income statement as well as rent roll.  For a building that size, all that info should be easily accessible and they should be able to provide you printed docs quickly.  If you go under contract to purchase the property, I also advise reviewing the property's tax returns. 

Wish you well - happy to answer any other questions you have.  

@Chase Maglangit

I had a client who bought at Makaha Towers and in less than a year needed to move - to minimize the cost of her selling it, she decided to sell it herself through Facebook marketplace.   So you might try that - she said it was a pretty easy process.  

Happy to answer any other questions you have.  And if I can be of any value to you here on O'ahu, contact me any time - I am here to serve.  

@Kevin Burke - contact me anytime if you want to chat.  I've been investing in real estate for about 20 years.  Happy to answer any questions you have.  

Congrats on using your VA benefits for a stellar investment.

@Anna Marcotte

That's great you know a lot of contractors and your s/o works in HVAC.  You have very little to lose if you make an offer  - wish you well 

Hi @Rachel A.

I've never done it but I've been told if you buy a duplex and live in one and rent out the other, you can use the 1031 funds for part of the purchase. I don't now how familiar you are with real estate here, but it is quite common to see a single family with detached ADU, or even 2 single family homes on the same lot here on O'ahu. I've recently looked at a couple listings like this on the market. So maybe an option for you? If so, I recommend you speak to a 1031 exchange company. I've personally used First American before and was pleased with their services.

Also, just wanted to share that I had a client who did a house hack here for several years and did well with it.  His property was a 3 BD townhome in Aiea.  

If you need help looking for a new home here, or have other questions, please never hesitate to contact me.  I enjoy helping people achieve their real estate goals and am here to serve.  

Aloha

@Anna Marcotte

I applaud you for wanting to get into real estate investing. I am unfamiliar with your market, but my response is pretty much how I'd respond to anyone in a most markets.

First, do you have any experience rehabbing a property? If not, have you ever worked with contractors in rehabbing a property? If the answer is no, I recommend you give a lot of thought about the risks involved and if this is the type of property you want to tackle for your first BRRR. It is not an impossible undertaking for you, but if the house is in such condition that it may not even be habitable, you might be surprised by the time and cost of renovations to make it turnkey. And given it is in such poor condition, there is a good chance some unexpected cost will arise during renovations.

Also, how quickly can you get permits?  And if you plan on hiring contractors, how soon can any quality contractors do the work?   Some other things to consider:  What if interest rates keep going up?  What if the housing market or the economy corrects?  Highly recommend you make sure you have enough financial reserves to handle anything unexpected the might come up.  

Regarding the list price - since I don't know the market, I don't know if $285k is fair value.  But after you analyze the deal and determine what it will cost to renovate it, you can make any offer you want.  And don't be scared of "insulting" the seller with a "lowball" offer.  I've been involved in deals where we made offers that I thought would offend the seller, and we eventually ended up buying the property much closer to our asking price then the seller's original price.  And consider it good practice to go through the process of analyzing the deal, working with a lender, making an offer, and negotiating terms.  

Lastly, since you are new to investing, you might want to find a local real estate agent who is very knowledgeable about the market and has experience working with investors.  

Wish you well and happy to answer any other questions you have.  

Hi @Nathan Gesner

There seems to be some slight confusion about Bill 41 that I want to clarify.

First, you can still own and operate a legal short term rental (STVR) on O'ahu if it is in the resort district of Waikiki, and the building association allows it. At this time, there are over 20 buildings in Waikiki where it is allowed - even after the passage of Bill 41.  You can also own a STVR in Ko'olina on the Westside of O'ahu, as well as a new single family development in Makaha Valley that is zoned "resort."  Lastly, you can also do highly rentals in Turtle Bay on the North Shore.

Secondly, if a property has a non conforming use permit (NUC), you can do nightly rentals - regardless of the location of the property on O'ahu.

Thirdly, and fortunately, the Bill added two buildings in Waikiki that can be used as highly rentals - the Waikiki Banyan and Waikiki Sunset.  These buildings are located a short distance from Waikiki Beach, units are mostly 1 BR/1 BA and generally sell $500k-$600k and generally gross $5-$6k/mo.  Though I know of one 1 unit at Banyan that usually earns about $7k/mo.  I have clients who buy units solely as an investment, but owning a legal STVR here often works well as vacation home.  

Lastly, and unfortunately, all other properties outside the resort districts, or not having an NUC permit, can only be rented for a minimum of 90 days.  Terrible loss of property rights.   Supposedly there is a group that is going to sue and I hope it becomes a class action.   

Hope this info helps - happy to answer any questions.  

Aloha @YuYing Chen

Congrats in finishing up in school.  If you want to share, what are you majoring in?  And also curious, what attracts you to O'ahu compared to the other islands?  Whatever the reason, applaud you for putting yourself out there and getting new experiences.  Only thing I really regret about moving to Hawaii is that I didn't do it sooner. 

Regarding your real estate questions - It will be difficult but you can find a BRRR property on O'ahu for that loan amount. One example is I had a client last year buy a 3 BR townhome in Ewa for $286k. He did a fix and flip and sold it after a handful of months for $450k cash. It could have been a decent long term rental but he wanted to free up his cash.

I'm also a fan of vacation rentals.  There is quite a bit to know here about rules and regulations and City Council is going to soon vote on some new regulations - so things may be changing.   There are a few decent 1 BR legal vacation rental units that sell in the high $300k's and gross around $4-4.5K a month.  But there are also studios between $220K-$350K that might appeal to you and gross around $3k+.  Just know there are some buildings that are better than others to own a legal vacation rental unit.   You are welcome to call me at your convenience, if you'd liked to chat more about the real estate market here as well as living in Hawaii.

So if I were in your shoes, whether it was a BRRR, or a vacation rental, I'd definitely try to buy real estate here. And I'd only look for "fee simple" property. Leasehold works for some and I've had some clients look into leasehold but all eventually end up buying "fee simple" property.

Happy to answer any other questions  you have,