All Forum Posts by: Kwok Wong

Aloha, 

I got a couple of questions about Notice to Enter here on Oahu. I am trying to get access for my rental property for rental photos purpose. However, the tenant was out of town and did not respond. There’s couple things that I have done to get access. 

1. On the first day, I asked for the tenant’s availability via text message but no response.

2. Two days later, I opened the tenant’s mail box, put in a Notice to Enter, and called the tenant and left a voicemail (still not getting response). 

Apparently, tenant was out of town, did not receive any notice and not able to be there during my entry. My questions are, first, did I violate any laws by opening the tenant’s mail box? All I did was open the mail box, put in the notice, and closed the mail box. Nothing else. Second, how do I prove that nothing is damaged or missing because of my entry? More importantly, how should I handle this situation better in the future? 

Mahalo for any input.

Kwok

Quote from @Eliott Elias:

Whats the home worth? Sounds like you're breaking even after taxed and insurance. Any vacancy will kill you 

Hi Eliott, 

According to Redfin, it is $1,100,000. I will definitely pay more attention on other expenses in the future.

Thank you

Quote from @Nathan Gesner:

Using the HELOC is just another way of borrowing 100% of the purchase price. You borrow to borrow. It's over-leveraging and I only recommend it for experienced investors that can pay the HELOC off in under 12 months.

On top of that, you're not calculating cashflow properly. Here's a guide that describes what good cash flow looks like and how to analyze a property.

https://www.biggerpockets.com/...

Hi Nathan, 

Thank you for your opinion and cash flow the guide. Because I do not have much capital at this point, I have to use HELOC for the downpayment, and get a loan for the investment property. How a experienced investor can pay the HELOC off in under 12 months? Using cash flow only? w2 income? or and other resources?

Thank you

Quote from @Joe Villeneuve:

Yes, you do need more info.  You need to find a different property to buy.  This is a loser on every front.

You have negative CF (when you include the payments on the HELOC), you're not building any equity (interest only payments), and in 10 years you will have to come up with the entire cost...with nothing to show for it.

This deal has no potential.  Just because you can get Seller Financing, doesn't mean the seller will give you a deal worth buying the property.

Also, you NEVER want to spend extra money to pay off a mortgage on a rental property.  All you're doing is adding to the cost.

 Hi Joe,

Thanks for you input. Your advice is really helpful. More questions if you don't mind. 

So when using HELOC, do you recommend paying it off with cash flow? Should I use my w2 income as well?

How do I build up my equity when using seller financing?

Thank you

Hello everyone, I am still learning here, and recently found a potential seller financing single family home opportunity here in Kalama Valley on Oahu. Can anyone help me to analyze this seller financing deal, please?

Sales price: $1,160,000

Down payment: $200,000 (using 5 year HELOC, 200K is the limit, 3.6% interest rate)

Balance $960,000 at 5.5% Monthly interest only payment: $4,400

Property taxes: ~$252

Homeowners' insurance:~$168

10 years balance is due

Potential monthly rent: $5,300

I currently have a $500K mortgage, am planning pay off the single family home by paying little by little during the 10 years, and using cash out refi or apply a new HELOC at the end of the contract.

Do I need more information to analyze the deal? I am thinking to negotiate a lower sales price, and/or monthly interest so the monthly payment can be decreased. What should I pay attention on when dealing with seller financing? More importantly, how can I make it a better deal? Greatly appreciate for any input.

Thank you,

Kwok

Hello everyone,

I am currently going through rental applications for a family. I wanted to reject them but they think it's inappropriate and trying to get my approval. 

Reason #1 that I want to reject, one of the applicant did not turn in verification of employment because he does not keep his pay stubs. This person has to wait for the latest pay stub to be mailed. I called the supervisor, but no one answer the phone.

Reason #2, I wanted to call to do a verbal verification of employment for other applicant, and they think this is too much and feel uncomfortable. It's a government job and pay stub was provided for this applicant.

I called and talked to them about my decision and they are not willing to accept result. They tried to provide whatever documents they can to get the approval.

My questions, should I wait for them to provide documents or reject them? How should I handle this situation appropriately?

Thank you for any input!
 

Quote from @Kapono Kobylanski:

Which building is this? I heard that the Ilikai always cash flows but I haven't gone as far as checking the numbers yet. I do have access to them from a STR property manager I know on island. Can't you just get another HELOC in 2 years when it's close to the deadline? I'm a novice so I have no idea. I just used my Heloc for the down payment on a STR in Oregon this year. My first official investment property. So far it's cash flowing well but I don't see any bookings for two months from now. It's not like Hawaii STRs. I have a 30-day STR until April 2024 and then I need to find mid-term renters. That is a cash cow. My Oregon PM keeps telling me it will do well and its her job to worry about it booking so I'm trying to keep my cool. I do trust her well enough but I do have some reserves and I can always long-term rent the house for minimal returns as a backup strategy.

I'm sure your property will be well worth it in ten years or much less. Honolulu legal STR options are rare.

Hi Kapono, thanks for your reply. The building I am looking at is the Island Colony. I was thinking to pay off the HELOC with the cash flow generated, never thought of getting a second HELOC. It's something new to me. Thank you!

Hello everyone, I am getting a HELOC for my first investment property. I want to hold on the property and make it short term rental, no intention of selling it in probably at least 10 years. However, after all the expenses, it's enough to cover the interest of the HELOC but not principle. Is there a strategy to pay off the home equity loan? Please advise.

Quote from @Andrew Garcia:

Hi @Kwok Wong, going with your first mortgage lender could be a good idea but it is not always.

You can always shop around. Finding a lender that can do HELOCs on investment properties can be a little tough.

The good news is that someone made a list HERE.

A fixed-rate loan is generally better if you are using the funds for long-term use. For example, using it as a down payment on another property.

A HELOC is generally better for short-term financing such as financing a rehab.

Hope this helps! Let me know if I can be of any assistance.

hi Andrew, thanks for the list. I am trying to use my HELOC as a down payment on my first investment property. Given the current economic environment, I am uncertain.

Quote from @Josh Edwards:

Hey @Kwok Wong, Are you trying to get a HELOC on your primary residence to purchase an investment property? Or are you trying to find a HELOC on your first investment property? If you're looking for a HELOC on your primary, usually local credit unions have the best rates. It's harder to find a HELOC on an investment property, but it is possible. I saw a list that someone posted on here at one point of all the lenders that do HELOCs for investment properties, I will try to find it and send to you.

Generally speaking the interest rate you decide on is going to depend on your bigger picture plan for the property. Are you going to hold it for 20+ years? Or do you plan to sell or refi and take cash out in the next few years? Rates are high right now so utilizing an ARM can be helpful to maintain cash-flow...

I would pay more attention to the questions they ask you rather than what you ask them. A good lender will take your entire plan/financial picture into account to make sure you're on the path you want. Many lenders will just try to sell you whatever you qualify for, rather than truly advising you.

Hi Josh, thanks for you input. I am trying to use HELOC to purchase my first investment property. Ideally, I would like to hold for at least 10+ years.