All Forum Posts by: Kinohi Larey

@Kinohi Larey Did you inherited the property from a family member who passed away? If so you could sell tax free. Have you ran the numbers on the property as a rental? You didn't provide any in the post but given our current market selling could be the best option.

Hawaii is crazy expensive I'm sure. $650 cash could land you two or three DEALS next year instead of one.

Yes, I would definitely sell if I could, but for some personal and family reasons, selling isn't an option. So I figured the next best thing would be to use the equity within the property to purchase a cash flowing property.

1 Vote

I have recently inherited a property that appraised at over 650K. This property is owned Free and clear and has no mortgage on it. It has a paying tenant in the property.

I really want to do a Cash Out Refi (around 200k) in order to purchase a rental property that will cash flow and pay off the Loan amount.

I have great credit (over 800), however my DTI isn't great. Unfortunately I have been using the 'lower my taxes' structure with our business, so on paper my personal income is very low, which gives me a poor DTI. (I know, I know, dumb mistake. I'll be changing this business structure ASAP)

Are there any lenders who are able to do a Cash Out Refi without meeting the DTI standards, even if the rate is a little higher? I feel this would be possible, especially with the amount of Equity in the Subject property being so high in comparison to the loan amount I'm looking for.

ANY assistance would be greatly appreciated.

Mahalo from Hawaii!

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Originally posted by @Rob King:

@Kinohi Larey hey guys ,I have rented to travel nurses in the past on Oahu, I find them to be excellent short term tenants. There are some Hawaii and Oahu specific forums for these groups if you are interested.

Yeah I would love to know those forums! Thank you @Rob King

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Hi everyone. My wife and I run a small Rental Arbitrage business in Waikiki, Hawaii, and want to get input from other Arbitragers on how you're surviving during the COVID-19 effects on tourism. We are doing a few things to increase our "Survival rate". These things are:

-Lowering rates DRASTICALLY (dates in the near future are less than 50% of our normal rate)

-Advertising on Furnished Finder to try to house traveling nurses

-Advertising for longer term rentals (1 to 3 Months)

-Communicating with landlords about Rent deferment or reduction (How have you attempted to do this?)

-Opening up our bookings to COVID-19 responders

....

Are there any other things you guys are doing to try to cover your expenses during this time? I'm sure someone on here has found the "special sauce" that can help everyone else increase our chances of surviving.

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We use PROPER INSURANCE LLC for our listings, but it depends on where you are and what companies service your area. If you do some research you'll probably find something that'll work for your needs.

Originally posted by @Tirza Wibel:

@Kinohi Larey where do you purchase your short term rental insurance? We own our property and have HO insurance but I’m guessing we need this additional insurance. I like that it covers lost income due to natural disaster.

1 Vote

@Paul Sandhu & @Cheryl Vargas

Cleaning fees vary depending on what part of the country you are located. We are in Hawaii where cleaning prices are a lot more expensive. We charge there rates:

1 Br 1 Ba Condo in Waikiki: $125

2 Br 1 Ba Condo in Waikiki : $149

I know this may sound like a lot but for Hawaii it isn't, so it's all perspective. I would also recommend seeing other properties in your area and looking at their cleaning fees to get a bearing on what you should charge. Keep in mind, you should also factor in replacing of supplies (Laundry soap, toiletries, etc) into your cleaning fee, and not only think about the time spent on cleaning.

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Thanks! Yeah it's going pretty well, looking forward to high season in June and July. $3,300 in your first month is actually pretty good! You can expect your income to increase as you build your review base. Keep it up!

Yeah we're in Hawaii, in the resort zoned buildings in Waikiki (Government plans on cracking down on short term rentals that are outside of this zone, so we've chosen to only stick within this zone and do things legally)

Have you done Airbnb before? If not, there are some things that you might not know about that can significantly increase your revenue that many people are unaware of (Dynamic pricing, SEO tactics, etc.)

PM me if you have any questions and I'd be happy to help out in any way I can!

Originally posted by @Cheryl Vargas:

@Kinohi Larey

Wow that’s an amazing return!

What city are you in?

I paid $2500/ month rent in Santa Rosa, CA and my first full month payout with Airbnb was about $3300. I did all the cleanings this month, in addition to my full time job, and I’m exhausted!

I haven’t even calculated all my expenses for the month yet, and I had to buy a $200 portable A/C unit because we had a couple 90 degree days last week!

I probably have to look out of my area so I can get better prices like you are! Are your rentals in Hawaii?

1 Vote

Well I was being brief and general, but if you needed me to be more specific with expenses I could have broke it down. Here's a specific list of expenses:

Expenses per month:
Rent $2,375
Internet $30
Short term rental insurance: $50 (Covers any liability, damage or lost income because of natural disasters)
Toiletries & refill supplies: $20
Repairs & maintenance: $20
All other utilities covered by landlord

Furnishings and start up costs: Almost all furnishings were already in said property when we took over the lease. We only spent a few hundred dollars as start up costs

Total income after service fees $4,750
Total monthly expenses: $2,495

Monthly net $2,255

Keep in mind, this is averaged, and based on PAST numbers, not projections.
Also, this property, if purchased would be well over 400k. For a person who doesn't have the cash on hand, or the ability or desire to have a mortgage on a property that expensive, this is an awesome way to make substantial monthly cashflow. Depending on your lease agreement, you can lock in this cashflow for the next few years like we have.

So basically, if we are comparing return percentage, this is a much much higher return. Yes it doesn't involve equity, and other real estate advantages, but it's a great way to get your foot in the door. It's a great way to quickly (relatively) increase your monthly cashflow by a couple thousand dollars without having to spend hundreds of thousands. And for us, it's a great way to build up savings to be able to one day purchase a similar property.

It's not for everyone, but don't dog on it if it's not for you. There are tons of people making a KILLING in this business.

Originally posted by @Ken Latchers:

1) you are not netting 2k. You left out vacation rental insurance, you left out things like furnishings and maintenance. Or replacement cost or risk.

Also, an owner would be making a ton of equity if they owned outright.

2) I think this is the kind of strategy that works better in places with high rent and High house prices.

I paid 135000 for 2 Townhomes that grosses 65000 a year. Is a much better deal to own these then to try to sublease. And I get all the profits for the same amount of work. And I build equity and I'm not subject to the whims of landlords or property owners who change your mind or Etc

Originally posted by @Kinohi Larey:

@Penny Griffus It's been going well! We are making very good margins. Of course not as good as some "mentors" online advertise, but still way better than If we were to purchase a property and have a mortgage. Here are some quick numbers for one of our units:

Our rent: $2,375

Other variable expenses (internet, toiletries, etc) ~ $120

Our average income from STR (After service fees, cleaning fees):

$4,750

So we're netting over 2k a month. Pretty decent margin if you ask me :)

2 Votes

Our rent: $2,375

Other variable expenses (internet, toiletries, etc) ~ $120

Our average income from STR (After service fees, cleaning fees):

$4,750

So we're netting over 2k a month. Pretty decent margin if you ask me :)

1 Vote

Great post! Totally NOT a dead end job, as it is creating a business, which real estate investing basically is as well. When done right it can be outsourced and somewhat passive.

Appreciate your post! We are getting our first rental arbitrage unit this week :) Hoping it all goes well. Risk is definitely mitigated though because we have an 8 month lease instead of a year, with the owner wanting us to extend it we decide we want to. Excited!

8 Votes

All Forum Posts by: Kinohi Larey

Kinohi Larey has started 2 posts and replied 16 times.

Post: Cash Out Refi with Bad DTI Score

Post: Cash Out Refi with Bad DTI Score

Post: AIRBNB / Rental Arbitrage during COVID-19

Post: AIRBNB / Rental Arbitrage during COVID-19

Post: Rental Arbitrage -how to do airbnb without BUYING

Post: Rental Arbitrage -how to do airbnb without BUYING

Post: Rental Arbitrage -how to do airbnb without BUYING

Post: Rental Arbitrage -how to do airbnb without BUYING

Post: Rental Arbitrage -how to do airbnb without BUYING

Post: Rental Arbitrage -how to do airbnb without BUYING