All Forum Posts by: David L.

 I'm pretty sure he's somewhere in our woods, Greg.  aka the best island.

This.  Such a scary thing to think about especially on a forum such as this where people are looking to invest large amounts of money.  From my personal experience of being new here, I get spooked out with the random colleague requests.  I understand that there are many here that are genuinely trying to help, but in my short time here, I've also seen the inquiries of "offered help" that gets me very cautious.

@Phillip Cuilla, if you do decide on banking locally, the rates are hovering at around 3.5% w/ 2pts for 30yr and 2.5% w/ 2pts at 15yrs.  Closing is taking longer these days.. about 45-60 days.

There wasn't any equity % requirement with the HELOC I am doing. Simply put, they were willing to give 80% of assessed value minus whatever was outstanding on the current mortgage. Amounts less than $250k did not require a property assessment.

Thanks, Charlie. 

There is definitely an inclination of possibly not following the 5 years.  Simply because I don't want to tie myself up paying off a loan for the next 5 years and would like to continue investing in other opportunities.  I think the plan would be maybe to interrupt the payment at year 2 and 4 to invest in something else. 

Thanks for that wisdom!

Thanks, JM.

I'm not so much worried about the minimum payment but rather the impending pressure of a higher rate. From the offers I was looking at locally, after the first 2 years at 2%, it balloons up to about 5%. And from there it varies based on the rate of WSJ + 1.5%. I'm definitely new to HELOCs but that is how I understood it. Could be very wrong. While a HELOC starts off low, it jumps back higher. I feel like that offsets the savings of the first 2 years. Whereas I could refi and get a fixed rate of 3.625%.

Good point about paying interest only at first - did not realize / think of that.  I'll have to check with the lender what their interest only period might be.  That could possibly be the saving grace and give me the flexibility I need.

So, here's what I mean:

For simplicity sake, lets say both a HELOC and Cash-Out Refi have the same rate and I'm ignoring any closing costs. If I paid the same amount of money in the same amount of time, would either option basically be the same?

So in other words, given these two scenarios:

1. 1. 50k Cash Out Refi.  Pay off the 50k principal in 5 years.
2. 2. 50k HELOC. Pay off the 50k principal in 5 years.

Do I end up paying the same amount of interests for both?  Or do I some how end up paying more with #1 because it's a longer term loan?  I imagine if I'm paying off the principal from #1, that it's lowering the interests paid and is essentially "removing" the 50k from the loan as if it was never there.

My reasoning is that I want to go with #1 so that I have the option to pay slower if need be.  #2 would force me to pay it off ASAP, especially given the variable rate after the introductory period.

Hope this makes sense!  Thanks for the help.

 I second this question.  What's the thought about potentially losing out an entire year's worth of revenue?  

TK is long term.  I'm entirely new to real estate so this may be completely off - but could you say that you could expect a major repair like this 1 out of every 5 years?  So it would make sense to calculate in a 20% loss per 5 years?

Hi, Bob.  Do you also invest on Kauai?  Curious to know what the thought is about being able to get good investments here.  

Hi Royce.  I actually looked up the tax rates and yes, you're right - we are different. Thanks for that guidance. It actually helps me clarify another part of the ROI.

As for the ADU, you make a good point. An ADU just seemed like a cleaner, separate way of doing this... which I still think it is but if budget is strained, I could potentially do what you're saying. If I wanted to adhere to keeping distance between the room and the main dwelling, perhaps I could do something along the lines of a room connected to garage on one side, then main dwelling connected on the other. Might save a bit more again on a single structure vs two.

To touch on part of your comment, yes, I do want to keep the option of doing a LT rental if the ST route proves to be too much work for me.  I'm a little weary on the kitchen vs wetbar debate simply on the idea of "feeling" I want to portray.  i.e. I don't want them feeling they're in a high scale neighborhood with a ghetto hot plate, lol.  But hey, maybe it can be done nicely and I just haven't seen it.

Thanks for the brain storming session.  It's brought up some great ideas.