All Forum Posts by: Yannick W.

Hello

I currently reside in the Cayman Islands and I am very interested in getting into real estate investment as soon as possible. In particular, I would like to invest in multi-unit residential property, starting out with properties between 2-4 units - probably house hacking to get my feet on the ground.

However, there are a few issues;

1. In Cayman, we don't have an equivalent to the FHA 3.5% down mortgage available in the U.S. We do have a 0% down mortgage program for first time resident buyers (that can only be used once), but the property purchase limit is $200,000 and it is difficult to find multi-unit properties in this price range - unless they are in a C or even D area. Even duplexes in B areas here are selling for 400k or higher.
2. If I'm looking to rely on conventional bank loans, banks in Cayman consider any properties in excess of 2 units (triplex or higher) to be 'commercial' for the purposes of lending. Therefore, if I'm looking to acquire a mutli-family property using residential loan terms and interest rates, my only option would be a duplex - and I am concerned that the cashflow on a duplex would not suffice to cover expenses and mortgage payments, especially given that I will be occupying one of the units to obtain the loan and 'house hack'.
   
   I'm left in a difficult position then, as I would have to rely on commercial loan terms and interest rates, which include, in many cases, 35% down, and Prime +2/3 rates (which would now amount to about 5.5 - 6.5% per year). This high down payment amount is not something I can afford at any point in the near future.
3. That I'm aware, there isn't a local real estate investors club or meet-up group where I can talk to others who invest locally - so I'm a bit stuck for advice here.

Ultimately, I'd like to get my foot in the door in this business as soon as possible, but the financial barriers to entry seem almost insurmountable here in the Cayman Islands. I've also considered turnkey investing in the US, as I'm primarily interested in the development of passive income. However, I don't like the idea of starting off owning property in another jurisdiction altogether, as I can't gain the hands-on experience and I'm sure there are some cross-jurisdictional tax implications that I'd rather not have to deal with at the moment.

Any help that can be provided would be greatly appreciated.

Thanks

Hello

I currently reside in the Cayman Islands and I am very interested in getting into real estate investment as soon as possible. In particular, I would like to invest in multi-unit residential property, starting out with properties between 2-4 units - probably house hacking to get my feet on the ground.

However, there are a few issues;

1. In Cayman, we don't have an equivalent to the FHA 3.5% down mortgage available in the U.S. We do have a 0% down mortgage program for first time resident buyers (that can only be used once), but the property purchase limit is $200,000 and it is difficult to find multi-unit properties in this price range - unless they are in a C or even D area. Even duplexes in B areas here are selling for 400k or higher.
2. If I'm looking to rely on conventional bank loans, banks in Cayman consider any properties in excess of 2 units (triplex or higher) to be 'commercial' for the purposes of lending. Therefore, if I'm looking to acquire a mutli-family property using residential loan terms and interest rates, my only option would be a duplex - and I am concerned that the cashflow on a duplex would not suffice to cover expenses and mortgage payments, especially given that I will be occupying one of the units to obtain the loan and 'house hack'.
   
   I'm left in a difficult position then, as I would have to rely on commercial loan terms and interest rates, which include, in many cases, 35% down, and Prime +2/3 rates (which would now amount to about 5.5 - 6.5% per year). This is not something I can afford to do at any point in the near future.
3. That I'm aware, there isn't a local real estate investors club or meet-up group where I can talk to others who invest locally - so I'm a bit stuck for advice here.

Ultimately, I'd like to get my foot in the door in this business as soon as possible, but the financial barriers to entry seem almost insurmountable here in the Cayman Islands. I've also considered turnkey investing in the US, as I'm primarily interested in the development of passive income. However, I don't like the idea of starting off owning property in another jurisdiction altogether, as I can't gain the hands-on experience and I'm sure there are some cross-jurisdictional tax implications that I'd rather not have to deal with at the moment.

Any help that can be provided would be greatly appreciated.

Thanks

Just an update here - I agreed to paying $1,000 per month beginning April 1, on the condition that the landlord give me a $600 rent reduction for this month. They agreed - so all worked out.

Thanks for the tips!

Thanks for the suggestions everyone.

Hi @Jeff B., thanks for the reply.

Whilst this is true, the lease has a 3 month notice period for termination by either party. As a result, effective termination would occur on 30 May 2016 - which the existing landlord could do at this point without cause. This would leave me without a place to live for the month of June, and ultimately is not ideal. 

Additionally, the purchaser may choose not to purchase - and this may sour relations with the landlord - also not ideal, given the relationship.

Any thoughts? Thanks for the help.

Hello

I'm currently in a position where I have signed a 6-month fixed term lease, paying $800 per month (effective January 1 2016) - with a three-month termination notice clause. My landlord is interested in selling the property, and the prospective buyer wants to raise the rent to $1000 (which is fair market value), and my current landlord wants to know if I would agree to the rent-raise for the remainder of the lease, in order for the sale to complete.

My landlord is concerned that the sale will not close if I don't agree to the rent raise; however, in the interest of fairness - I did sign the lease with the legitimate expectation of paying $800 per month for 6 months. I am also wary that the landlord is a family friend, and I don't particularly want to sour relations, in the event that I decline and the sale doesn't close.

Any advice would be appreciated.

Alright thanks Joseph

Waiting on this, anyone else still waiting? Wondering if it's just my connection or something, thanks

As the title suggests, I've read conflicting resources suggesting that either: - repayment mortgages are better due to the added benefit of mortgage paydown; and - interest-only mortgages are better due to higher monthly cash flow. Does anyone have personal experience using both, and which is better in the long run - for buy and hold purposes? Thanks for any help.

Many thanks Nada, much appreciated!