All Forum Posts by: Doug Nordman

Quote from @Bryan Vukelich:

If you know of any insurance company who may offer insurance given this situation, I'd love a referral.  Many thanks 

Bryan, I just finished our property insurance search for our home & rental on Central Oahu.  

Nationally there's American Modern Insurance Group in Ohio, a subsidiary of Munich Re.  Our daughter & son-in-law ended up going with them for their Mililani home, and I'm keeping an eye on them if we ever get turned down for our Waipio Gentry rental's 30-year-old cedar shake roof.  American Modern is a specialty insurance company so they do a lot of older homes and have a correspondingly high complaint ratio, but they're well-regarded among specialty companies.

Locally I also got good service (yet higher premiums) from State Farm (Susan & Kevin Ihle in Mililani) and at Atlas (Michael Ho).

Thank you again for the referral, @Joel Bongco, we got a fast response from your broker:

"After review of your policy, I recommend staying with your current option. I think the cost is good."

I was mildly concerned about the bureaucracy behind the possibility of filing a hurricane claim with two different insurers for our home & rental.  If AFI is willing to continue insuring Hawaii property at a reasonable premium, we'll stick with them. 

But if AFI backs out like USAA did, then it's good to know we have options. 

Thank you, we'll see what they can do!

Another Mililani agent with State Farm just gave us a pretty good quote, but Armed Forces Insurance and USAA are still ahead on property & auto.

Thanks, Joel, I came across Pyramid in a search, but they haven’t responded.

This could be a rant about sucky customer service, but I’d like to think the lack of responses is due to our lower premiums from AFI and USAA.

Michael Ho (MHo at Atlas) e-mailed quickly:

“I reviewed the policy details of your current terms and my premiums were way higher than your current premiums. I do have a suggestion regarding your current coverages: please review them with your current agent/carrier to increase your coverage limits for the dwellings. The reason being that labor and material costs have increased over the years.”

I really appreciate his fast replies without upsells.

A second Atlas agent e-mailed, and I’m waiting for their analysis. A Noguchi rep called(?!) to alert me that a Noguchi agent would phone me soon(?!?) and I’ve heard nothing since.

In other news, USAA’s app gave me a more expensive home-insurance premium than AFI. Even worse, the USAA bot immediately shot down our rental property with this boilerplate: “We are unable to provide you an insurance policy because of an increased exposure from coastal storm-related damages.” I’ll still talk with a member service rep but I doubt their underwriters will deviate from the company policy.

I’m pretty sure we want both of our Oahu houses to be insured by the same company. It’s not just the consolidation discount-- if a hurricane damages both, I don’t need to negotiate with two different claims adjusters at two different insurers.

I'm a long-time BP & forum member, but this is only the second time I've started a thread here.

I’m seeking a referral to an independent insurance broker on Oahu. I’m also happy to talk with claims adjusters if they have opinions on what insurance companies we should use-- or avoid.

We’d like to thoroughly overhaul our policies on our home, our rental property, our umbrella liability, and (possibly) auto insurance. (We do not need life insurance or personal property insurance.) We have a mortgage on our home but our rental & cars are paid off, so we have some room for negotiating amounts & deductibles.

Our property & umbrella policies are with Armed Forces Insurance and our autos are with USAA... for the last 40 years.  It’s been over five years since our last policy quotes (because pandemic).  I’m agnostic about continuing with either of those companies but they’ve treated us reasonably well over the decades. We might end up just haggling over their renewals but I'd like to make an informed decision.

I realize that fire insurance is getting a lot more expensive and we're all too familiar with hurricane insurance. I know how to spend hours on worksheets and talking with call centers, but this time we’re hoping to have the underwriters tailor their policies with much higher deductibles. I don’t know whether that’s possible.

I also have no idea how local insurance brokers are paid, and I’d be happy to learn more about that too.

Quote from @Beth B.:

We are hoping to rent for $3,500/ month. Can anyone provide some good property manager recommendations for the area? 

Beth, I don't know the market rents for your area, but Stott Property Management will. 

Tracey is the daughter of the founder (George Stott, a Navy submarine retiree) and her spouse Tim Kelley is a submarine vet.  They've been managing one of Oahu's larger rent rolls for well over a decade.

https://www.stottpropertymanagement.com/

Quote from @Paul K.:

Hey BP family! I'm in the process of moving to Oahu and would appreciate some advice. I'm military and will be moving there for a minimum 1 year assignment, likely will extend to 4+ years.

[...]

Is there anything I’m missing or other things/strategies I should be considering?

Thanks in advance!

Paul, we've lived on Oahu for 34 years, and prices are still at a pandemic peak.  

I'm a military retiree, and it used to be quite convenient to invest where you were stationed.  However with today's tools on the Web you can invest in real estate all over the country where it makes sense.  You don't have to sift through Oahu listings trying to find a place that *might* cash flow as a rental... *after* you get a refi... and *if* the HOA fees don't go up too much.  You're going to be a long-distance landlord on your Dallas SFH anyway, so why not buy more real estate there (or anywhere else) on the Mainland that'll have a higher cap rate from the very start?

If you're insistent on buying a place here, I'd suggest renting for 6-18 months while you network and personally dig into the local markets.  The rental market is also tight (and expensive) here, but you're probably getting the housing allowance (and COLA) to afford it.  During your lease (with or without a roommate) you can find the off-market listings or the desperate sellers to buy a live-in rehab that you can turn into a cash-flowing rental or a flip.

 
But I wouldn't buy here and count on historic appreciation bailing you out of an expensive carrying cost.

Quote from @Matthew Brown:

 Do you still think it's a seller's market? Thanks! 

Yep.  Koa Ridge continues to sell as fast as they build, and the light rail starts moving passengers next month... right through Ho'opili toward town.  

There are thousands of ZIP codes of Mainland real estate that cash flow better than Oahu.

I realize that you weren't asking the BRRRR question, Matthew, but rising interest rates have made that tactic of the third "R" more challenging as well.

Elijah, I'm a retired submariner in Mililani, and we've lived on the island for nearly 34 years.  We own three properties here and we've been landlords for over 25 years.

BiggerPockets gives you the tools to invest all over the country in places where the cap rates make sense.  When you compare Oahu to the rest of the U.S., I think you'll be a little concerned about leveraging a personal residence into an investment for a short military tour... and very concerned about doing it here.  

If you aren't able to live on base or can't find a rental here (for the best of reasons) then I'd recommend house-hacking a 3-4 BR SFH with roommates. (That's the best way to put BAH in your pocket.) Another possibility would be a live-in flip (not for the faint of heart, and maybe not for families) that you could rebuild during your tour. That's going to involve a lot of nights & weekends... in between deployments, right?

If you feel obligated to buy a condo or a SFH during your tour here, do the math. It's better to buy an investment rental property that you can live in for a few years rather than buy a nice home and then try to turn it into an investment rental property. The appreciation is unlikely to pay the closing costs on both the buy and the sell during a typical three-year tour. Appreciation is going to have even more pressure on it as Koa Ridge and Ho'opili build out their new phases and start selling. Cash flow is challenging due to the homeowner's association fees.

Quote from @Kekila Keuma:

This very situation happened with my grandfathers beachfront house in Waimanalo.  $2.5M and he left it entirely to one brother.  It destroyed the family.  None of my uncles and aunts speak to each other because of it and its been decades.  I am trying to avoid the same thing from happening to my siblings and me.

  Do you have a referral for an estate planner?

Thank you gents,

-Kila

Kila, I'm in Mililani.  We've discussed similar issues in our family, and here's a couple of ideas.

- Contact Michelle Hobus (estate planning lawyer) at Sterling & Tucker about putting the house in a revocable living trust.  When your father passes (or whenever he chooses to) he can pass the house to the successor trustees who have the power to dispose of it-- or arrange loans to buy out each other.  Michelle may have other ideas which are better than mine.  She took care of our estate plan, which includes a RLT and a bunch of other details that your family may want to use.

or

- Your father could set up his estate to pass the house to one of you.  He could then (separately) buy single-premium permanent life insurance policies in the names of your siblings so that everyone gets either the house's equity or the amount of the life insurance.  Again, I'd work this with an estate-planning lawyer.