All Forum Posts by: Bryan Vukelich

Yes, please don't simply blindly believe what you see or hear.  Legal vacation rentals are thriving on O'ahu.  The only real differences in the situation before and after Bill 41 that passed last year is that there is now a registration process with the Department of Planning and Permitting for some buildings which cost $1000 first year and $500 for each annual renewal.  Also, a big positive for Bill 41 was that the County recognized Waikiki Banyan and Waikiki Sunset as legal vacation rental buildings.  

Lastly - it is very much a seller's market for vacation rentals here.  A handful of buildings have had units sell for record prices, and I'm still seeing multiple offers situations.  

Hi @Lauren Samford - I am not that familiar with the Big Island market.  Are you looking for property on Kona side or Hilo?  Let me know and I'll direct message you a few quality agents that can assist you.  

@Clara Settje - you might try either of the attorneys below.  I personally worked with both on a  partner buyout and I was happy with the services provided by each.  

Jonathon Durrett -  808 792-1211

Nathan Aipa - 808 523-5030

@Joani Pederson - what terms are you offering a potential investor?  Any equity stake in the property?  What is the exit strategy for the investor - a buyout at some point?  And based on the down payment amount, I'm guessing this is a studio in Waikiki?   What is the average nightly rate in peak and off season?  

And what are you calculating for ROI?

Just fyi - In my experience 93-95% occupancy rate is high.  Definitely doable in peak season, but I recommend being a little more conservative on annual occupancy rate when running your financial calculations.  One of the largest vacation rental management companies on the island targets an 85% annual occupancy rate.  In his opinion, if it gets above 90%+, nightly rates are too low.  

Hi @Aric Yuji Harris - I'd guess you'll get some wholesalers contacting you due to this post.  In the past, I've had wholesalers contact me for various reasons so I know there are O'ahu wholesalers on BP.  Also, I recommend you look into Meetup - there are some real estate investor groups here on O'ahu and quite sure you'll find wholesalers in some of those groups.

Good luck, 

Hi @Shalen Takaaze - are you looking for properties in multiple states or just one state/area in particular?  If one particular area of a state, my recommendation would be similar to @Gregory Schwartz advice of interviewing multiple agents.  Clearly communicating to every agent you interview on what your goals are, and what your expectations are for the agent you decide to work with.  After this, maybe decide whether a buyer contract works for you.  

I don't use buyer rep agreements as my attitude is that if I provide superlative service to my clients, there will be no reason for them to want to work with another agent.  However, recently a buyer client (who is a new investor) reached out to me and asked me if I'd mind him working with other real estate agents as he thought he would be presented with more opportunities that way.  I greatly appreciated him asking me this and we discussed it and he decided to continue working with me exclusively and I'm happy to write that he'll be closing on a property next week.  

Good luck 

@James Tarantino  - you're off to a good start asking these questions, and looks like you are getting some good advice from some other members.  I'll add a few things I think may be helpful.

* First, I"m not familiar with NJ market but obviously there are advantages of owning in the market you live in.  

*  I recommend you first investigate different markets around the U.S and then pick 3-5 markets that intrigue you most.  At that time, really refine your search to try and determine what market will likely give you the best opportunity to achieve your real estate goals.  When researching markets, research landlord tenant laws, what is the political/regulation environment?  Is the area business friendly?  Is crime increasing or decreasing?  More people moving to the area than moving out, etc. . . 

* Congrats on having $400k budget.  In some markets you'll be able to invest in a MF. 

* Also, I have clients who self manage an STR from out of state. I referred them to a cleaner and maintenance person and it is going well for them. I also know other investors who self manage STRS in their own state. Since you work full time, self managing a STR may not be viable, but it is definitely doable.

* Lastly, I applaud you for wanting to get started in real estate investing.  However, please note, you can now get about 5% yield in a money market.  That 5% return - stress free - not having to deal with tenants, maintenance issues, property management companies.  Might be a good place to park your money until you find a quality real estate investment. 

Wish you well 
  

Hi @Zach Edelman - for growth, meaning increased income?  For long term, yes; I do based on O'ahu being such a popular tourist destination from people around the world, also the limited inventory, lack of vacant and buildable land and the extremely time consuming and costly process to try and build anything new here.  But with certain U.S. and global economic issues right now, I wouldn't be surprised to see the market soften a bit in the short term.  However, I've been surprised by the number of tourist visiting O'ahu so far this year, and other people in the industry have said the same - been very crowded and we are not even in peak season yet.  

How's the overall market in Austin currently? 

Regarding legal vacation rentals in Hawaii, each island has its own regulations so be sure you clearly understand the risks of each inland.  For O'ahu, Bill 41 was passed last year which seems to have give clarity on the regulations - at least for the time being.  To add, I've not heard of the government wanting to add any new regulations for the resort districts on O'ahu where it is legal to do short term rentals.

Also, please note, the resale market is still very strong on O'ahu - partially driven by lack of inventory.  A unit at Waikiki Banyan - a very popular building for investors and guests, just sold for a record price.  And this morning I presented an offer on a unit in another building that, if it is accepted, will set a record price.  And despite the large number of hotels in Waikiki, the occupancy rate is high for vacation rentals.  I spoke to a vacation rental manager today and he commented how strong demand has been for vacation rentals - and this is not our busy season.  To me, it is pretty remarkable how many tourists are currently on the island.  Last few days I've worked in Waikiki - packed.  And the owner of a large vacation rental management company recently told me that more and more people seem to have a preference for staying at a private vacation rental, rather than a hotel. 

Wish you all well in your investing and happy to answer any questions on O'ahu real estate.  

Hi @Sean Field-Eaton, that is a difficult decision but that is fortunate that you have equity in the property and can afford to feed it   As you know, 2.85% is a great interest rate and 13 years left to be mortgage free is really not that long.  How well maintained is your community?  Do you expect any special assessments or large increases in the association dues?  Also, although it is area specific, over the past 30 years, townhomes/condos on O'ahu on average appreciate about 4.68% annually.  I'm long term bullish Hawaii real estate and with current rate of inflation, you could do quite well if you held it long term - though I know feeding a property is not ideal. 

If you sold and wanted to stay invested in Hawaii real estate, have you considered a vacation rental?  

Ultimately - only you can decided what is best for yourself. But if you want to do more investment deals sooner than later and keeping this property will prevent you due to high DTI, it seems best to sell and reinvest in a cash flow positive property.

If you have any other questions, I'm happy to answer them.