All Forum Posts by: Clark Kahawaii

Hi All,

I have bought and sold a few investment properties in Texas, but I moved out to Kailua Kona, HI about 3 years ago now and I am an a new market with new state rules and regulations. I also have partial ownership of a fairly successful property management company that qualifies me as a "Real Estate Professional" which I know opens up some additional tax benefits. I have a basic understanding of several tax strategies, but if there is anything I have learned in business, it is to surround yourself with people smarter than you. So in this case, I would rather defer to someone who is involved with tax strategies concerning both business & REI full time.

Therefore, I am looking in the BP community for some suggestions if anyone has some referrals or testimonies for someone that they would recommend. I am hoping to find someone that is readily available for questions, creative(within the rules of the law) and hopefully has their own investment properties or own their own business.

Thank you in advance for any advice or recommendations!

Quote from @Carlos Ptriawan:

Quote from @Clark Kahawaii:

Aloha @Carlos Ptriawan,

I am a property manager here on the Kona side of the Big Island. We manage a hybrid portfolio of long term rentals and STVR's. We do have some owners that have homes on several islands, the main warning that I would give, is that each island is different. Rules and regulations differ from island to island so if you are to invest on any of them, please make sure you have a team or contact that knows the ins and outs of the local regulations. It is very hard to cash flow in general in Hawaii if you are a new buyer, but as you mentioned, long term appreciation can be substantial. 

Let me know if you have any questions and I hopefully I can help you out, even if it is just advice.

 these are not new for me, my main concern is pretty much on logistic side (car,etc)....sometimes it's just hard if I have to drive from waikoloa to kona everytime to pickup car. I am not looking for cash-flow.

 Got it.. I have some owners that store there car in a storage unit by the airport. I don't know if that is a viable option for you, but may be worth looking into?

@Account Closed,

It looks like you have gotten a lot of different views and suggestions from everyone. A lot of them would probably work out great, but ultimately you need to do what works for you.

I am a property manager here on the Big Island in Kona. We manage a large portfolio of homes(120+), and have managed units from $1,000/month to $30,000/night. As you have seen from others, each island has its own rules and regulations. It is somewhat imperative to have someone in the market that knows and keeps up with all of the rule changes if you are going to invest out here. There is a bill currently in legislation in Hawaii County that is changing several items that affect rentals. They are on the 7th draft of it.

Appreciation is the obvious play out here on the Big Island. There are very few properties that cash flow if they were bought today, but that doesn't mean that they don't exist. The most common ways(and maybe only ways currently) to cash flow here are large, high priced & high performing STVR's, or multi-family properties. One of the STVR properties that we manage is actually on the market at $5,900,000 currently. The property usually averages about $400,000/year in bookings. Combine that with appreciation and it could be a viable option.

I also know of two different multi family properties right near the heart of Kailua Kona that are on the market as well. One is a 10-unit complex, listed at $3,000,000, and the other is a 9-unit complex, listed at $2,700,000. They are actually side by side buildings. They are underperforming rent-wise at the moment, so would be a solid value-add play if you had the capital.

Let me know if you have any questions on the Kona market and I would be happy to help out if I can. 

Quote from @Loren Cota:

Hi, yes I am still looking. I am pretty open. Kona side, Waikoloa, Hilo, and Keaau. Pretty much whatever makes sense.My plan is for it to be a midterm rental most the year and then be there for a portion of summer to be close to my daughter. 

 Aloha Loren, not sure if you are still looking for a rental here on the Big Island. Just wanted to let you know to be careful about planning for a midterm rental (1-6 month). There is a bill in legislation (Transient Accommodation Rental - TAR Bill) for Hawaii county, that is trying to do away with mid term rentals completely. I am a property manager in Kona and we are not currently taking on mid term rentals because we don't want to promise anything to our owners that we may have to go back on if the bill passes to some capacity. Not that you can't operate them now, but probably a good idea to have multiple exit strategies. It may end up having to turn into a long term rental(180+ days). Feel free to reach out if you have any questions.

Aloha @Carlos Ptriawan,

I am a property manager here on the Kona side of the Big Island. We manage a hybrid portfolio of long term rentals and STVR's. We do have some owners that have homes on several islands, the main warning that I would give, is that each island is different. Rules and regulations differ from island to island so if you are to invest on any of them, please make sure you have a team or contact that knows the ins and outs of the local regulations. It is very hard to cash flow in general in Hawaii if you are a new buyer, but as you mentioned, long term appreciation can be substantial. 

Let me know if you have any questions and I hopefully I can help you out, even if it is just advice.

Aloha @Ling Rita,

Unfortunately there aren't too many options for property managers out on that side of the island. However, I am sure I can find a recommendation through some personal channels. Let me know if you found someone, and if not, I can try and help! 

Aloha @James Potter,

I am late to the party, but checking to see if you ever made any movement after this post. Investing on the Big Island is great if you have a plan, but can be daunting due to all of the rules and regulations for renting a home. Please feel free to reach out if you have any questions. I manage a large portfolio of rental properties on the Kona side, and at the very least can help you understand the market. 

Got a real estate question.

Me and some partners are looking at buying 3 duplexes at once. We need 200k to do the deal.

Me- 135k

Partner 1- 50k

Partner 2 - 15k

These are what we are putting into the deal.

How would you structure the payout of cash flow to make it to where we are all even into the deal? We are trying to make it to where eventually we are all even 66k into the deal. We estimate a 2k cash flow. So we have an idea where i take 67% of the cash flow and they pay me back a lump sum down the road as if i gave them a 69k loan. But is that fair to me? I’m not getting interest on that “loan”.

Does anyone have any other ideas on how to structure it?

@Daniel Hyman Thank you for the insight! That's exactly what I wanted to know.

Thank you as well to you @Basit Siddiqi

Hey guys so I was talking to a friend who is moving into a new house and he’s selling his previous one. He was telling me about one of the new laws that was enacted this year that in order to avoid capital gains tax when selling a “personal residence” you NOW have to have lived in the property for 8 years. (Previous was 3 I think?) He had been living in the property for 4 years and was expecting not to pay any taxes on the gain but is going to have to now. Is that correct? Or does it only take effect on new properties? (Sounds like wishful thinking haha) Has anyone done any deeper research on this new law? And has anyone done anything creative to circumvent it? Thanks guys!