All Forum Posts by: Joe Sillaman

If WW3 starts property in Hawaii is going to be super cheap/radiated!

All great input. 

Once you use your HELOC for a down payment is that counted against you when getting approved for a loan just before closing/settlement?

I would like to use the HELOC on a downpayment but am afraid once the HELOC withdrawn it will cause my Debt to Income Ratio to go up causing me to be unable to get final loan approval....

@Aaron Y. I would say unless you're buying with very high cash down there's not really a whole lot of positive cash flow opportunities with 0-20% down loans with the market being the way it is now. It's basically appreciation and flips all day. 

However, if the military receive another boost like 5-10% in housing allowance it could reinvigorate the market for sales and rentals. 

MLS is "retail", no deals to be had unless you have a ton of cash and can buy dilapidated flips lenders or regular buyers wouldn't touch.

It's sad but I'm considering breaking even on a rental a "win" at this point. Granted I buy my properties at 0-5% down VA loans just to get something. I'm getting tired of having older properties that need repairs often. I'm thinking of buying new/newer rentals in military areas like Ewa Beach and actually take negative returns on it because over time I'll be able to boost rents and make pretty solid returns off appreciation. On avg values increase just under 5% a year.

If you're in the market to buy a home get a pre-approval. Why? 

A. Prevents agents and buyers from wasting their own time by working only with serious buyers.

B. Enables to buyer to not miss offer opportunities in a fast paced market. 

C. Forces buyers to realistically understand what their price range is. 

I've wasted a lot of time myself with buyers who never got pre-approvals. But I generally give a new buyer 1 or 2 showings worth of my time. 

@Jonathan Cheng I'm a investor and real estate agent on Oahu as well. Buy and holds that produce any type of cash flow beyond 3-4% on Oahu is going to be very difficult if you're not going to put at least 20-30% down. Maybe specifically try vacation rental investing with self management although most VRs are technically illegal without a permit. 

If you want to take advantage of market try flipping. A could strategy could be to purchase, wait a year, rent it out, and flip it so you can take more time to plan and allow the unit to appreciate more. 

Hit me up if you have any questions or would like to talk about difference strategies. 

Welcome to the West Oahu RE club Matt. I'm sure we'll run into each other on a escrow one these days. 

@Rhonda H. I cannot speak on the re-fi piece but I own and operate 2 vacation rentals on Oahu's North Shore. Indeed it is hard to cash flow vacation rentals unless you put significant equity into the property upon purchase. My thing is why would you invest in Maui when you can self manage simply on Oahu? You can save money on management fees and will have more convenient access to the rental incase something is needed. 

@Andrew Smith I assume you're looking to purchase a property out of state? You cannot find any reasonable real estate on Oahu for less than $150K. That would be for something like a studio 300 sqft apartment in a old building.  

I own 1 and manage another vacation rental in Haleiwa. I would say North Shore is one of the best areas for VRs. North Shore lacks future development and is becoming increasing popular. However, keep in mind that any VR without a VR permit is a technically illegal operation in the eyes of the state. If you're caught which many operators are on the Windward side & North Shore you will be provided a warning followed by daily fines if continued. Permits are no longer issued and stopped back in 1989. 

To start you'll need a lot of capital/high loan Pre-Approval to get into the business. A ideal VR Single Family Homes will start around $1.1M if you want views or are close to the ocean. $700K is the start for a home in a local Haleiwa neighborhood away from the ocean. Condos starting $530K and are nearly non existent in Haleiwa but do come up every year or so. Turtle Bay is closer to Sunset and has Condos starting around $500K. I would avoid Waialua "cement city" for short term rentals since they're a bit farther from Haleiwa Town and any popular surf locations. Those units tend to sit on market for a lot longer than anything closer to Haleiwa 

As a owner myself if I would continue to acquire rentals in Haleiwa or Sunset. Being close to all of the restaurants, shops, iconc surf &, snorkel of Haleiwa town, Sharks Cove, and Sunset is very ideal for tourists. 

Lower your price or be prepared to sit longer for a low ball offer. The buyer market clearly has determined that buyers do not see enough value in the home. It's the hottest buyer market it's been.