All Forum Posts by: Mark Whitted

 I believe the big sticking point now is that you must have in-state property management. Although there are evidently other issues since the B&B owners (traditional FULL B&B, not airbnb) in Kapaa that we used to use who lived onsite got out of the business because of the regulatory hastles.  

One plan would be to ease into it by working from there.  

 I hate you. 😉 

We don’t have a vacation rental yet but we would LIKE to have one on Maui as a way to eventually ease into living there at least ½ time. Semi retirement. I’m 61 now. Rental would probably be in Kihei. But a more full time residential preference would be “Upcountry” around Kula. 

Why does everybody keep calling this a Ponzi Scheme? How did it "pay profits to earlier investors with funds from more recent investors"?  It was just plain deception and fraud.

As others have said here, you chose to take a big chunk of your profit and pay down your mortgage instead of putting it in your pocket. That EXTRA $12k (or whatever) you paid on your mortgage isn't an "expense", it's savings. You're just choosing to use use your rental's  equity as your savings account. Probably not a good idea. Keep it in something liquid and use it as a downpayment on another property.

@Will Zena

I got it too! Exactly my thought. 

I’ve said it on this thread before, but Clayton’s troubles are really sad for me. If it weren’t for Clayton Morris and his podcast, I wouldn’t be a real estate investor today. It looks like I was actually blessed to not be in a position financially to actually pull the trigger on anything two years ago. 

Clayton frequently interviews a lot of the RD advisors. Like Tom Wheelwright and Garrett Sutton. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $411,050
Cash invested: $20,350

3BR, 2BA, 2 car garage / 3 BR, 2.5 BA, 2 car garage duplex built in 1983. House hacking. $25 "cashflow" is PITI - tenant's rent - our last rent. (Our monthly housing cost decreased $25/month.) This will improve over the two year lease. We have built in $100/month rent increases at 9 and 18 months.

What made you interested in investing in this type of deal?

House hacking, found here on BP, sounded like a great way to get started with REI. We had been tenants in a house for 10 years when the landlady decided she wanted to sell the house. We couldn't agree on a deal to buy that house (for a live-in flip) so we started looking for a 2-4 unit to house hack. Quads in our region are difficult to find in an area where we would want to live. Triplexes are nearly non-existent. So we settled on a duplex.

How did you find this deal and how did you negotiate it?

We were looking with the help of our agent and over a weekend had found a few properties that we wanted to view. Monday morning I received a Zillow email alert for this new listing. We had information that the seller wanted a quick sale and we knew there were others interested. So we went with our "highest and best" offer first as we didn't know how the seller would handle multiple offers. Our offer was accepted within 3 1/2 hours. We negotiated some post-inspection repairs and closed in 30 days

How did you finance this deal?

FHA 3.5% down with a distribution from my IRA for the down payment and closing costs.

How did you add value to the deal?

Although our side had just been renovated, there is still room for value add in windows, insulation, and HVAC improvement. At the end of the lease, we will incorporate the same flooring, paint, kitchen, and bath improvements to the other side.

What was the outcome?

In progress. We plan on staying in our side for about two years. At that time the tenants will probably be leaving. After rehabbing that side and "turning" our side we will analyze whether it makes sense to keep it with new market rate tenants in both sides or sell. Either way, the plan is for us to find another 2-4 unit and house hack again.

Lessons learned? Challenges?

We haven't found anything that would have made us not do this deal. There are small challenges with things like HVAC (our side is COLD in the winter!) but we're pleased.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Our agent: Rick Nelson with Re/Max Town & Country in Allen, TX
Lender: Homeside Financial

@John Gochangco Check out David Greene’s book “Long-Distance Real Estate Investing” here on Bigger Pockets. 

I actually found our duplex though a Zillow alert. I’m still open to TK if the numbers work. But it looks like we could keep busy with duplexes in our area for a while. :) The guy we bought this one from has at least 5 more in the area and is considering selling. There is another investor on our block who is also considering selling. 

I would also be interested in out of state investing, possibly using a TK supplier as a wholesaler/rehabber to be my “boots on the ground”.