All Forum Posts by: Bryan Vukelich

Aloha @Rick Figurasin - it is great you are asking those questions but very difficult to provide answers as impossible to accurately predict what Fed, economy and home values with do. But I'm a big fan of the VA benefits and if it were me, I would use those benefits to buy a home in Hawaii with $0 down. And if you come across a good investment deal, deploy your cash then.

Last year I had a couple VA clients sell homes they've only owned for about 2 years and both made a decent amount of money on the resale. So if you plan to own and hold for 4 years, based on historical data, it seems like it could work out for you. Based on the past 37 years of data, median home price for single family homes on O'ahu increases a little over 5% per year. And although the market has slowed compared to the last couple years, inventory is very low and I'm still often seeing/hearing about multiple offer situations.

Again, impossible to predict, but personally I think home values will soften in the short term, but due to the high interest in owning real estate in Hawaii, and the lack of inventory and difficulty in building more homes, I'm bullish on Hawaii real estate long term.   

Good luck and if I can be of value to you in anyway, contact me at any time.  I am here to serve.  

Hi @Elin Trinh,

Below will be the expenses you'll need to factor into your analysis:

* Mortgage payment (if you are financing)

* Lease payment (as mentioned earlier - best to see if/when the lease will reset.  Please note it can be difficult get accurate info on what the new lease payment will be and I've seen some payments increase significantly once the lease resets)

* Monthly AOAO fees

* Insurance 

* Most likely property taxes

* Maintenance   

* Property management fees (unless you self manage)

Happy to answer any other questions you have.  

@Eric Buss for sharing those lessons.  I can definitely relate to most of those lessons and would guess many other investors can as well.  Also, it was a good reminder for me that there is nothing like "hands on " experience to help a person learn.  

Wish you the best, 

Hi @Elin Trinh,

Most of the time it makes more sense to buy a "fee simple" investment property. However, it is not uncommon for investors to buy a leasehold property as an investment - obviously the numbers need to work for them to recapture their initial investment as well as offer a satisfactory ROI. Like any investment property, you just need to be sure your income and expense projections are precise as possible.

Other very important things to know is the current lease payment and when the lease is scheduled to reset or expire.  

Also, please note that typically a lender requires at least 15 years remaining on the lease in order for them to offer financing.  

Happy to answer any other questions you have.  
 

@Nathan Florence - ha Nathan, I didn't even put 2 and 2 together when I first saw your name.  I was a late starter to surf but is my favorite thing to do and I watch and enjoy many of your YouTube videos - though it makes me envious at times.   And congrats to owning at Turtle Bay - incredible what those valuations have done recently.  

And @Nathan Gesner had a good suggestion about buying a 4 plex but hard to find anything decent on O'ahu and almost impossible on North Shore.  But if patient, you can find a SF home that is divided into 2-3 (likely unpermitted) units somewhere on North Shore.  

Also, a big focus of my real estate work on O'ahu is vacation rentals and I occasionally come across a quality off market opportunity.  I'll be in touch next time I come across one.   But eventually you might want to consider investing in multiple family properties on the mainland to diversify your holdings plus you'll usually get a better return on cash there. 

 Look like a nice swell building on the North Shore - enjoy the water and have a great NY celebration.   Wish you the best with your surf career 

Hi @Nathan Florence - congrats on your first investment in Hawaii.  If you don't mind sharing, which island is it on?   And that is great you have the opportunity to acquire another property.   What are your long term objectives with your real estate investments in Hawaii?  If you bought a primary residence, how long do you plan to hold it for?  

Some info you might find helpful - I know the owner of one of the largest vacation rental management companies on O'ahu.  He was surprised that they had to drop rates for December 5-10% to get a decent occupancy rate.  So it appears that tourism might be slowing a bit.  However, despite that, there seems to still be very strong demand from investors for STVR's on O'ahu.  I'm still seeing multiple offer situations and recently some pretty standard units have sold for record prices in a couple buildings in Waikiki.  So if you decided to invest in another STVR and on O'ahu in the immediate future, best you act quickly if a unit comes on the market that you find appealing.   But from headlines I'm seeing about US and global economies, there may be better buying opportunities if you wait a bit. 

And I completely understand the appeal of using your BAH toward a mortgage rather than paying another person's mortgage.  Only you can decide what is best for yourself.  I enjoy owning a primary residence but for many years I rented and used most of my funds to buy investments.  And something else to consider, you may be aware that the outer islands are experiencing more of a slow down in residential real estate than O'ahu.  For O'ahu, if a property is price well, it will likely sell rather quickly and I've still seen some multiple offer situations.  However, my hunch is that prices with soften in the short term but I'm bullish Hawaii real estate long term.  

Wish you well and contact me any time if I can be of service to you.  

Hi @Eric Buss - congrats to having a successful investment property on the Big Island.  Curious if you want to share, what are some lessons you learned on your first investment property?  And what part of the island is it located?  Been easy to find tenants?

Regarding learn more about taxes - I recommend you find a CPA who has experience working with real estate investors.  But BP is also a great resource.  I'm confident that if you ask specifically what you are looking to learn about taxes, some members will provide you valuable advice.  

Wish you well with your real estate investing.  

@Kwok Wong - just chiming in with a few points based on my own personal experience as an investor.  

First, if you have no other options, I don't see a problem using your HELOC if the cash flow from your investment will service your HELOC payment and leave you some cash to spare. But highly recommend you have a plan B for making your HELOC payment if you run into a problem with your investment.

Secondly, perhaps consider partnering with another investor if you find a quality opportunity.  If you are able to find a great opportunity and need cash and are willing to partner with somebody, contact me or other BP members.  If it is an attractive deal, you can negotiate an ownership stake with no money down for simply being the "deal finder."  A small stake in an investment is better than nothing.  

Thirdly, a couple thoughts on the opportunity you mentioned.  Based on current inflation and rates, if that 5.5% rate is fixed for the 10 years, that rate is quite favorable.  Also, over the past 37 years, residential real estate on O'ahu appreciates on average about 5.07%.  So seems like the only way the deal could work would be as an "appreciation" play.  But even then, once you factor in all of your carrying costs, and if the house sits vacant for a bit . . .  if you are patient, you'll find better opportunities.

Lastly, I'm not a property manager but I used to rent a house in Hawaii Kai. That $5300/mo rent for a $1.1M home in Kalama Valley seems high - unless the home is comprised of multiple units.  

Take care and contact me anytime if I can be of value. 

Hi @Dan McEvoy - not familiar with PMB but you might want to also contact Keco Capital - I've been told good things by them from other investors.  

@Cole Schlack - great post Cole.  Much of that applies to owning on O'ahu but thought it might be helpful to readers to add some remarks regarding O'ahu compared to Big Island.

1) Same on O'ahu.

2) Same on O'ahu

3) It's pretty dang expensive here. Got gas at Costco this past weekend and happy to see premium was $4.54. And electricity rates have gotten even more expensive this year. And we definitely have some of the highest property values in Hawaii, but recently I've had a VA buyer acquire a 2 BD/ 2 BA townhome for $486k - based on comps, it was a very good opportunity. I just had another buyer go under contract for a nice attached home in Pearl City for $720k, and seller is crediting back 4% to cover the buyer's closing costs as well as payoff some debt. Plus the home has existing space to create a rental unit. I think he'll do well with it.

 But despite how expensive some things are here - the ability to surf year around in pretty warm water . . . priceless. 

5) No lava here - but we got some of your VOG last week.

6) Agree expect we don't have plenty for sale right now - very low STVR inventory at this time on O'ahu. 

7) I am big fan of the Big Island and may eventually move there - but for now I love all that O'ahu has to offer.  
 

Aloha,