All Forum Posts by: Mike Neubauer

@Nicholas Walker - I'm a resident of Maui and have been for most of my life.  Happy to help if you do decide to make this your next spot.  Got all the resources you would need.  Aloha.

Happy to help!

I know this house.  I've been in it many times.  It does not look anything like what's in those pictures from 10 years ago.  And it will need WAY more than $80k to rehab.  Sorry man, you're WAY off base here. That house will likely need between $350-$500k.  This is a meth house that has squatters all over it.  If the deal is anywhere near where you think it is, you should take it down and spend the $80k to do it yourself.  Sorry bro, trying to sell this with 10 year old pictures and an estimated $80k rehab is criminal.  

I've been looking into both Hostaway and OwnerRez for a little while now, so I'm glad to stumble onto this thread.  I own and manage a number of rentals and currently use Hospitable, which is great, but has its limits.  If you don't have VAs or don't have other owners involved, it might be all you need.  However, we're looking into these two for taking on more units, giving several VAs access on a limited basis and the unified inbox that both provide.  

I have a good friend who owns a few small hotels that uses Hostaway and was able to do a Zoom call with him so he could show me the process.  I also don't like that they're not transparent with their pricing or what the product does on their website.  Going through the Zoom call though, it seems extremely similar to OwnerRez.  As for pricing, if you dig deep you'll find that Hostaway costs about $50/mo per unit but all that is on a "case by case" basis.  I know my friend pays closer to $20/mo. per unit.  OwnerRez is about the same, depending on how many units you have.  They're all based on sliding scales.  the more units you have the less per unit per month.

Like @Ryan Moyer mentioned, OwnerRez has a library of videos you can view and has a 14 day free trial, unlike Hostaway that doesn't have a free trial. I watched a bunch of the OwnerRez videos and honestly OR and HA look eerily similar.  The one thing I don't like about OR is that they have "premium" features that just keep adding up.  Like if you want "property management" as part of your software its extra.  If you want Quickbooks integration, its extra, if you want a widget to incorporate into your Wordpress site... extra.  Not sure if Hostaway does this or not, but that's one thing I would like to find out.  I hate the nickel and diming that a lot of these companies offer. 

It does seem like users of both platforms really like them, so it may be a matter of just choosing one and going with it.  Interested in hearing other users thoughts on both.

You'll cash flow if you self manage.  With property management though, they typically will take 25% and will wipe out your cash flow.  There are some hybrid systems that will take less, but you'll still be responsible for doing some of the work.  With these you can cash flow a bit. 

If you are adding value with a big rehab, you'll have a lot of upfront costs, but you could cash flow on some of these too, but you may spend $100k on a 1,000 sq. ft. remodel too.  So, not sure if that's worth it for you.  

The way you're sure to cash flow is over time.  Nightly rates have grown tremendously over the years and the longer you hold the property the more you will cash flow.  I would tell anyone who is planning on buying here though, if they plan to have property management, don't plan on cash flow for awhile.  Not to say that you can't but the likelihood that you will see the numbers you are hoping to is small. You'll probably be looking at a 3% return or thereabouts with PM.

I think it's funny that the vast majority of people responding to this thread on Maui STRs aren't from Maui. All the different islands have different rules and regulations.  Unless I'm wrong, @Mark Waite and I are the only investors here that live on Maui and have rentals on Maui.  

I'm not interested in getting into a spitting match with anyone, but Mark's info is the most valid of all the posts in here. There are hefty regulations here. 30% down is the going rate for a CONDOTEL, which just about every STR in Maui is considered, so yes, plan on 30% down. Don't try to get around it. Maui's not a place for everyone to invest, if you can't afford the down payment, there are other markets to consider. Not every STR is hotel zoned, some are apartment zoned. A good realtor can tell you the difference and help guide you. Unfortunately, not all realtors on Maui are good realtors or really know that much about STRs. Heck, some can't even spell STR. Other than Mark and my wife, I don't know too many that actually hold STRs and are active Maui investors.

Understand that rehab costs are going to be significantly higher here than other markets as well.  And probably take longer.  And may not be as good quality as you're used to.  Also, a lot of investors that buy out here are not as concerned about cash flow.  This is a big point. I know everyone is seeking that, but not everyone NEEDS that.  A lot of people who buy out here do so because the appreciation is so good compared to other markets.  Over time that treats you very well, especially if you have other investments in other areas.

Can you cash flow?  Yes.  Can you get double digit returns? Yes.  Is it easy?  No.  Work with a good realtor and they can help get you there though.  And as far as the local lender goes, it is a good idea to have a local lender for a couple reasons.  1) Only a handful of banks in Hawaii lend on Condotels.  That's because condotel loans can't be sold to Fannie Mae or Freddie Mac. Banks have to hold them in house.  Because of this they typically want big down payments. Hence the 30%.  2) Good local agents know the banks and lenders who can close on said condotels.  If an offer comes in, and we're still in a very competitive market here, for full ask but the lender on the offer is an outside bank, the seller's agent won't put as much stock in that as a full ask offer with a local lender, someone they know can close the loan.  Not saying it can't be done from a mainland bank, but the local lender looks better on paper.  And as Mark and I can both attest to, MANY TIMES a mainland lender thinks they can close on a condotel in Maui and at the last minute they let their clients know they were wrong.  Condotels are not common in non-touristy areas and therefore many lenders aren't that familiar with them.  They see Condo and think they can close on them, because they've done so a hundred times, but if their bank doesn't want to hold the notes, they won't be able to close.  This happens a lot.

Sorry to go off like that, but always look at your sources.  Local knowledge matters. 

Aloha @Carrie Giordano

I'm doing it full time, from here on Maui.  They do very well for me, however there are some caveats.  I can go over them in detail with you if you like, but essentially 1) You have to know where to buy.  2) You have to be very aggressive when something comes up that meets your buy box.  3) You have to play the long game.

The market is still red hot for STRs out here. At any given time there's only a dozen or so STR properties on the market that I would even look at. Of those there are usually between 0-3 that I would pull the trigger on (Usually closer to 0). I think right now there is one.

I have the link for Brandon's listing, but I'm not going to share that out of respect for his privacy.  He doesn't manage his own listings anyway.  If you have any more questions, I'm happy to share what I know.  Just shoot me a DM.  Mahalo!  

 Smart move, @Carlos Ptriawan. I've been telling people for awhile that regulation is a good thing for STRs. Personally, I wouldn't buy anywhere but Maui and maybe some places in Florida like you mentioned, but that's just me. Careful on the BI, they have more regulations that need to fall in place, and will fall in place, but I've been investing on Maui for about 5 years in STRs, and they've been fantastic for us. Kauai can be a little more spotty, but can be good too. The key is understanding the right areas and knowing the pros and cons of what you can and cannot do with each property type. Essentially, in Hawaii in general you're limited to condos if you want to STR anything. Don't even think about trying to STR a SFH.

Aloha Lisa,

A lot of us get together randomly, but @Zasha Smith sometimes puts stuff together.  I haven't seen anything planned coming up, but I'm not on social media very often.  You can get notifications for keywords here on BP.  I would recommend setting one for "Maui Meetup" or something.  There's an events section too that lists anything coming up too.  

Aloha @Lisa DeAquino! Welcome to Maui real estate investing! I'm sorry to hear about your mom, and unfortunately, I feel like I've heard that story so many times. I live on Maui as well and invest here. It can be tricky, but there are ways to tap into that equity in order to use it to expand your portfolio. And even if you couldn't, there are ways to get involved with REI that don't cost money. You should come out to one of our meetups and meet some of the people doing deals out here on Maui.