All Forum Posts by: Isi Nau

Hey Scott. If you are working for a firm (rather than starting your own) the big expenses are MLS and Association/Board dues. Annually it comes out to less than a $1000. Not too bad. If you start making sales, then there are other costs like taxes and commission splits. But I wouldn't necessarily categorize those as costs. Good luck!

@Kealii Murray

Getting your license is definitely a good idea.  Once you get it, it takes very little to maintain it.  So there is very little downside of getting it.

But there won't be much benefit unless you are planning on investing on island, since the license will only be valid within your Board.  So if you're planning on investing out of state, then there wouldn't be much reason to get your license.

The benefits of having it, even if just used for your personal transactions; access to the MLS data as you analyze deals, scheduling showings quickly and at times convenient for you, and earning a commission when you buy (and forgo paying a commission when you sell).

Best of luck.

Aloha Khemaro. 

The units you're seeing in that price range are probably at the end of their lease term.  Meaning the lease will end soon (about 10 years or less) and the property will revert back to the land owner.  As the remaining years decrease, so does the price.

Here is a pretty good discussion on leasehold property that covers the basics (as well as pos/neg):
http://www.biggerpockets.com/forums/48/topics/4332...

As for maintenance fees here, they can vary widely in cost ($150 to $2000) and services.  You'll want to see what the maintenance fee covers (i.e. some cover air conditioning).  Fortunately there are hundreds of condo developments on Oahu.  Unfortunately there are hundreds of condo developments on Oahu.  :)   It may take some time to find the sweet spots.

Aloha Aaron,

The strategy does work. It's been around for years, under a lot of different names/companies. There are two primary strategies. First, you have your mortgage with a HELOC on the side to help pay down the mortgage.

Second, you replace your entire mortgage with a HELOC (the plan you described). One of the caveats with this plan is the variable rate. Either the HELOC needs to be paid off in the three years ($33k per year) or you'll have to refinance it into another HELOC. Another caveat is discipline (or lack of). Once the HELOC is in place, your minimum monthly payment drops, increasing your disposable funds. Those funds need to go towards paying down the balance as quickly as possible, not used as play money Also, as the HELOC gets paid down, the equity is still accessible, meaning you could withdraw funds for things like a vacation, car, etc.

You do not need to pay for these services.  It is a pretty simple concept.  The one benefit of these service providers is they provide some level of accountability for you.  Someone to report your progress to, which may help with the discipline dilemma.

As for using the $170k for investing, that is a little trickier and will need a sound investment plan.  The funds could be used on a short term basis, but in the long run (when the initial interest rate adjusts) the monthly payments will likely result in a significant swing in cash flow (negatively).

@Misa Kataoka 

I'm not sure we've had the pleasure of meeting.  Your comments seem a little strong, for us being strangers and from Hawaii, but not a problem.  I'll address them as best I can:

I did read his situation, not sure why owning the home with a VA for 5 years is a factor, cash flow can be had in any market, I provided advice on both keeping the home and selling (depending on his goals and living situation), I am not familiar with the market in Texas (its a big place and a blanket statement of it's "booming" seems guru-ish), being from a certain place does not automatically make you adept at investing there (Hawaii is no exception).

As for the comps, pulling properties from 2016?  That's a pretty tough sell.  But from 2013?  That's unheard of.  Valuating his property is unique.  He has 2 bedrooms, but the square footage is close to the 3 bedroom units.  Also, only one 2 bedroom has sold there in 6 months.

Aloha @Randy Gaona

I'm assuming the property taxes are $100 and that there is an additional association fee of like $50?  Not including repairs and maintenance, are you pretty close to breaking even?

Prices in Hawaii are projected to appreciate 3-4% annually for the next couple of years.  Not sure how long you're planning on staying in Hawaii (assuming you'll be PCSing), but it may be worth holding on until you leave.  If you're leaving in less than a year, then selling any time is probably fine.

If you wanted to keep your money in Hawaii, there are better cash flow options here.  You probably have about $100k in equity.  You could find something that nets you about $300-$400 a month.

If anyone else would like his contact info, just let me know.  I am more than happy to share his info via message.  I'm not sure he'd want me to post it publicly.

Hey Alex. I have a guy I like to use for pretty much anything except electrical. Super local braddah. He lives in Waianae, and doesn't take many jobs past Pearl City. It takes him a day or two to reply and usually does his jobs on the weekend. So if it's not urgent, he's good. But he is by far the most affordable one around. Let him know Isi referred you to him. I'll message you his info.

Aloha Armand. Here is a pretty good discussion on leasehold property that covers the basics (as well as pos/neg): http://www.biggerpockets.com/forums/48/topics/433209-leasehold-help-with-some-basics-renegotiation-fee-available

We've seen similar results. I posted our recent experiences here: http://www.biggerpockets.com/forums/554/topics/458081-what-are-you-seeing-in-hawaiis-rental-market I'm not sure when things will turn around. It'll be interesting to see what happens through July, as those PCSing settle in. Often times they'll arrive ready to buy, but realize the quality of home and location you get for the price is hard to swallow (compared to their previous assigned areas) so they settle for renting. It may be a good thing if the rental market takes a breather (from a human stand point, not an investment standpoint). It's crazy what people have to pay in Hawaii.