All Forum Posts by: Bryan Vukelich

@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, 
    

Hi Chris,

You might contact Hawaii Life - they have a property management division that may need your services.  Good luck 

Hi @Peter Lambert

@Josh Starner did a great summary of ways to strengthen your offer. You may also want to contact the listing agent and ask him/her for any recommendations on what the seller wants to see in an offer. Also, with cash buyers abundant in many markets, if you really want a property, you can also do an "escalation clause" in your offer.

Good luck

Hi @Katrina Cabral,

Hopefully what @Nathan Gesner suggested will work and this issue with be resolved quickly.  However, you may also want to contact the Landlord/Tenant hotline at 808 586-2634 and/or real estate attorney Nathan Aipa at 808 523-5030 to ensure you properly protect yourself in this situation.  

Wish you luck, 

Hi Steve - congrats on your new investment. I recommend you follow your attorney's advice and hold it in an LLC. My recommendation is based on personal experience, and advice I have received from attorneys & accountants as well as other investors over the years.

And it is very easy to form an LLC so not making the process much more complicated.

Best of luck 

Hi John, 

I appreciate your clear, detailed explanation of your situation and can understand the challenge of living out of 2 homes and wanting a place for yourself.  Given your circumstances, if it were me, even though the market is crazy, I would acquire a MF home to live in one unit and rent out the other(s).  Yes, it is possible the market might correct and you might lose some value - but if you hold for more than a handle of years, my guess is you'll be fine.   Also, there is also a chance this crazy market continues, values will continue to go up. and you might stay on the sidelines.

But the key point is (as a wonderful teacher once told me) "Make your money work for you."  You're 33, have a girlfriend, plan to have children and want a home for yourself.  Even if the value of the home goes down in the short term, the freedom, independence, and overall quality of life you'll gain by living on your own and owning your own home, will likely be worth it.  

That said, only you can determine what is best for yourself.  Wish you well.