Aloha BiggerPockets community.
I'm new to the site but I've read several of Brandon's books in the past. I'm working towards building a real estate business in Hawaii, focusing on Big Island where I currently reside. I'm 27 years old, a 4th year tenured teacher at Konawaena High School in South Kona, and originally from Rochester, New York. Go Bills! I'm intrigued by the market here in Hawaii, I see housing prices that are triple the cost of something back home (for obvious reasons... such as sunshine all year long and proximity to several amazing beaches). While many homebuyers in this market fear the imminent housing bubble that has made home ownership in Hawaii near to impossible on a single income, I found a niche into the market last May of 2020 by purchasing a condo in North Kona ($335K) in an area known as the Palisades. Aside from the dreaded HOA fees and limited options for short term rental (No tenant stay under 30 days enforced to HOA, no Airbnb), this property seems like a great starting point for three primary reasons:
1) After just refinancing to a 2.75% 30 year fixed loan, my cashflow is projected north of $400/month when I convert to an investment property including mortgage, HOA, taxes, and insurance. Utilities can be added for a larger monthly rent.
2) My condo complex Kona Seascape Condominiums was built not too long ago in 2007, and has an HOA with the lowest fees in town at $344/month. Our HOA financial report has the complex set up for future repairs such as roofing, parking lot sealcoating, landscaping maintenance, and other exterior expenses as well. Unlike many out here, I guess my HOA decided that a golf course or swimming pool/rec area wasn't worth the $1000+/month HOA fees when the ocean is a ten minute drive from our complex... phew (I know pay $4128/year I'll never get back but I accept the trade off)
3) My final point is about exterior maintenance. In Hawaii, plants, trees, and any type of vegetation grows, and fast... for homeowners much of their yearly expenses get sucked into maintaining the outside areas of their lot, and not only is maintenance an added expense and time drain it's a concern for pests (my first rented home here was invaded by rats because the homeowners didn't keep up with the landscaping. Rats, in case you didn't know, most often get into homes through trees with overhanging branches, and they then find their way in from above. There's your fun fact of the day! -> trim you trees, or have someone do it for you!
If you're still reading props to you! Here's my question/conversational prompt. What's next? While I should be the one answering this question, I imagine many people in the BP community have been in this stage of building a rental property portfolio. I'm in the process of prequalifying and preparing myself for an ideal purchase that shows up, however I want to be strategic. To diversify, I'm considering a single family home purchase. Perhaps one that can have an addition built on. I have worked construction here during my Summer breaks and networked with several home builders who would gladly help me out if their schedule opens up. Here's an example of a potential home purchase I would be interested in. What I know about the market in the area is: If it has an ohana unit attached to the house (a duplex with a studio (the ohana could be build below the elevated house in this example) and a larger segment of the house, in this example the 3-2 that is already built), it's a money maker for buy-and-hold, and a hot item on any homebuyers list.
I won't be able to purchase anything until May of 2021 in order to honor my agreement for primary occupancy of my current condo. My plan is to immediately convert in May, fill the condo with a 6mo. or 1yr lease holder, and buy and repeat.
If you're interested in sharing your two cents, that's greatly appreciated. As you all know, there's always more to learn, say's the teacher!
