28y.o. from Oahu Hawaii, need guidance

28y.o. from Oahu Hawaii, need guidance

Kaneohe, HI · Member since 2017 · 13 posts · 4 votes

Aloha everyone! I'm new to BP. I have been working as a Registered Nurse for 5 years at a hospital and my wife is a social worker for an insurance company who works mostly from home. If there is one thing I realized since joining BP, it would be that I know next to nothing about money.

About me:

$55,000 in the bank account

$160,000/year in W2 income

$2,000 saved every month on average

$569,000 last appraised value of our townhome

$458,000 @ 3.625% left on our mortgage

$65,000 @ ~4% in student loans

$0 taken from $35,000 heloc on our property

Future debts:

I'm going back to school to get my Doctor of Nursing Practice in August which will cost $80,000 over the course of 3 years (8 semesters) (Stafford loans for school are around 6-7%)

Invitro ferilization, *sad violin...*, with insurance: $8,000 at least

Future W2 income:

our combined income will probably be near $200,000/year after I finish school, however I will have $80,000-$88,000 more debt

Long Term Goals:

Free and Clear our first/current home

Payoff/Purchase Buy and Hold rental property

Pay off loans

Short Term Goals:

Have a baby

Complete my nursing degree

Purchase Buy and Hold rental property

My humble request from the BP community is to please share your wisdom and guidance with me. We do have a financial advisor who has been helping us make decisions thus far, however I want to hear interesting/different ideas on how to maximize our money that only the BP community could produce.

Ideas involving how to pay for college would be helpful as this is where a lot of high interest debt could occur, or ideas about when would be a good time to start purchasing buy and hold RE based on similar experiences to mine.

Mahalo and thank you in advance for your time, I know it is one of those TLDR type of posts.

Jonny

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Most Popular Reply

Michael Gayer Jr

Inspector · Mililani, HI · Member since 2016 · 170 posts · 31 votes

9y

@Michael Mazzella and @Michael Borger !!! I just graduated from Michael Mazzella's April Honolulu Mentor Training. There is a camp who talk about Real Estate Investing, and there is a camp who do Real Estate Investing. You want to position yourself so you learn from the "do-ers". And might I add both Michaels are very nice, very helpful, and very successful individuals.

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Jonathan Cheng
OP
Kaneohe, HI · Member since 2017 · 13 posts · 4 votes
9y
Michael Gayer Jr Michael Borger hey Michaels and thanks for clearing up some misunderstandings! You both made really interesting points. Both of which I do feel represent the Hawaii market. If you use the MLS to look for a deal it is incredibly competitive and requires making dozens of offers regularly. On the other hand if you decide to look outside the MLS you can find a lot of deals. About 6 months ago, before I got accepted into grad school, we were using the MLS to look for deals and try to house hack without much success because we were completely outbid every time. After multiple failed offers on roughly 10+ deals we decided to try look for land to build on not listed on MLS. We found only a few and mailed the owners who all refused to sell. Was definitely fun driving around looking for vacant land. When i got accepted into grad school we spoke with out financial advisor who suggested we wait till after I stabilize in my new job post-grad school to invest in RE.
0 Reply
Jonathan Cheng
OP
Kaneohe, HI · Member since 2017 · 13 posts · 4 votes
9y
One of the things i'm considering now is sacrificing a little quality of life by buying an apartment in honolulu to offset the loss i would incur by renting our current townhome. Taking into account vacancy/capex/utility for the rental, and if the apartment i bought was about $300k we would probably have an extra $300/month extra in cashflow which would help with loans/investments. Also I'm about 95% sure that my wife would not be happy about it and it would mean a year of grief at least. Definitely not wife approved.
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Michael BorgerPro Member
Rehabber · San Diego, CA · Member since 2010 · 499 posts · 206 votes
9y
So the one thing I latched on was the advice from your financial advisor. What they probably don't realize is that you can 'invest' in RE without using your own capital. Wholesaling, private lenders, hard money lenders, creative finance strategies, etc. These are ideas that are likely beyond the average financial advisor, which is why it's important to get your own education (which you're doing here). Be careful from whom you take advice.
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Michael Gayer Jr
Inspector · Mililani, HI · Member since 2016 · 170 posts · 31 votes
9y
@Jonathan Cheng , if you notice who the Search Engines point to in Hawaii, @Michael Borger dominates the searches. These are Motivated Sellers going online looking for a solution ... and they find Michael Borger all over the screen. He is a really savvy internet marketer as well!
0 Reply
Michael Mazzella
Flipper/Rehabber · Honolulu, HI · Member since 2012 · 120 posts · 87 votes
9y
Aloha @Jonathan Cheng !
(and also to my 2x Michael brothers)

Interesting thread, here, guys! But there are entirely too many 'Michaels' posting here. Yesterday's Wall Street Journal had an article that the name 'Michael,' having reigned supreme as the #1 boys name for decades, has lost its popularity lately. So despite appearances on this thread, apparently we are becoming somewhat more scarce! That's probably a good thing. ;-)

I noticed the same thing that Michael B noticed when I read that particular post of Jonathan's - It jumped off the page at me like a big red flag; I could hear my 'BS detector' alarms going off (okay, maybe that was just in my head...). Using a financial planner/financial advisor for advice on RE investing can take you out of the game very quickly here. But don't sweat it, Jonathan, it's common for people to do that. Read on...

As one of the leaders in the house-flipping space here on Oahu, (currently flipping/building 50+ houses a year here) I can tell you that I do not see a lot of serious competition here in this market. There are several reasons for this. One of those reasons is that many would-be Hawaii RE investors are knocked out of the box early in the game by following marginal advice. (it doesn't even have to be 'bad advice.' Just off center enough to take you off focus on what is effective). Much of the marginal advice originates from the following sources.
1. Unsuccessful investors. There is no shortage of peeps in this category willing to advise you. The scary part is sometimes they lead REIA groups, Meetup groups, and sadly, they can even show up as coaches from some of the national training companies. They can sound legitimate. It only takes a few books and webinars before one learns to 'talk the talk.' When I take an investor under my wing as an apprentice, partner, or student, I frequently have to reprogram them and unteach them crap they've been taught. This is sometimes stuff they've paid top dollar for. Many newbie investors have not developed good critical thinking skills or strong "BS detectors" to discern the talkers from the doers. In our business, street cred only comes from doing plenty of profitable deals in the market in question.
2. Real estate agents. In Hawaii, every 3rd person who walks by you has a realtor's license. They work hard for their money, it's insanely competitive, and it's a tough way to make a living. Most realtors in Hawaii cannot feed their families on realtor pay, and work another job to make ends meet. Generally speaking, realtors are not trained to be investors, and most of them are struggling just to be successful realtors. Even a successful realtor often knows very little about successful RE investing. They are entirely 2 different animals. A good realtor is a key player on our PowerTeam, (I love my realtors) but it's usually a mistake to seek investment advice from your realtor. While it can be difficult to know who the successful investors are, it's easier to tell who the successful realtors are in Hawaii. (Feel free to message me to learn how to find out in about 30 seconds, how successful your Hawaii realtor is).
3. Friends and family members. This is a big one, largely because they may already be in your "inner circle" of trusted advisors. I saw a recent post that stated 'taking advice from friends & family is one of the leading causes of business failure.' I did not verify if this is actually true or not, however, I do see the point as valid - just because someone is close to you, and trusted, does not mean they are giving you good advice.
4. Financial planners. The whole idea of taking investment advice from a commissioned sales person has never passed the 'sniff-test' with me, and always requires additional independent research. There's a saying that goes: "Never ask a barber if you need a haircut." Yet much of what Americans know about investing was taught to them by a commissioned sales person. Same is true of insurance, by the way. So when they're doling out advice on RE investing... forget about it.
5. Attorneys. A good RE attorney is an important player on our PowerTeam. They are our trusted advisors on certain specific matters. They can also be known as deal killers in our business, as they play the devil's advocate role and highlight legal risks, some investors will get frightened and walk away from a deal. This does not mean attorneys give good investment advice. That's not their job.
Well, the sun is coming up, and I'm a vampire. Gotta get my workout in. I hope this post will help some of my REI colleagues here in Hawaii and elsewhere.
Seize the day!
2 Reply
Jonathan Cheng
OP
Kaneohe, HI · Member since 2017 · 13 posts · 4 votes
9y
Michael Borger Michael Mazzella Since I am still new to RE and investing in general, I really appreciate the advice so far from you experts. I agree with the fact that RE investing is a specialty with so many different niches and the only people you should really take advice from are from those who are successful in your market. So I guess my post is best suited to your wisdom: If you were in my situation what would be the first steps you would take to setup a good foundation for future RE investing?
0 Reply
Michael BorgerPro Member
Rehabber · San Diego, CA · Member since 2010 · 499 posts · 206 votes
9y
Get the getting started guide here at BP and just start learning and doing along the way. Wholesale some deals; get some more liquidity; understand the local market; know what a deal is vs what's not a deal; go to local REIA meetings; learning creative finance strategies.
It's ok to start small as long as you start.
0 Reply
Michael Mazzella
Flipper/Rehabber · Honolulu, HI · Member since 2012 · 120 posts · 87 votes
9y
Aloha @Jonathan Cheng ,

Got your message - Every Wednesday morning I have a coffee 'mini-mastermind' session with different people before my company operations meeting starts. If you can break away on any Wednesday from 8am - 9am, I'll be happy to sit with you. Bring all of your hardest questions with you, and a notebook - and you can fire away - no question is off limits. Message me with a date that works for you. @Michael Gayer Jr , once Jonny sets a day/time with me, you're welcome to join us.

When it comes to REIA groups & other REI-related groups, there's an excellent article here on how to find a good one, and how to steer clear of the bad ones (note - Hawaii has both): https://www.biggerpockets.com/renewsblog/2008/12/28/find-real-estate-investing-club-avoiding-bad-clubs-succeeding-good/
Create an Awesome day!
1 Reply
Alex D.
Rental Property Investor · Honolulu, HI · Member since 2015 · 143 posts · 61 votes
9y
All great info! I should be on the island in roughly a year so it's nice gaining all the knowledge from collective minds.
0 Reply
Adam Geike
Honolulu, HI · Member since 2016 · 6 posts · 0 votes
9y
Did he respond to you with a date? If so do you mind if I join you guys? I am currently looking at a flip opportunity in another state and I would love to ask some questions before doing my FIRST DEAL! I have a partner in that state that will be doing all the leg work and my part is sales and numbers. Need advice on what is a good strategy for making an offer. It's an off market deal I found through craigslist and my partner has been there to take pictures. I am worried about not analyzing the property and the repairs correctly and overpaying for this place. Any advice is great thanks.
Current analysis:
No mortgage
ARV= approx 180k
Est repairs: Partial kitchen, Bathroom, Drywall about 1000sqft, Possible siding, Raised deck in the backyard, step crack in the block foundation for attached garage, and of course the unknown!
0 Reply
Jonathan Cheng
OP
Kaneohe, HI · Member since 2017 · 13 posts · 4 votes
9y
Adam Geike Michael Mazzella Michael Borger Michael Gayer Jr so many Michaels lol. I appreciate the offer to meet up, which I do intend to do, however I feel like my base knowledge is very lacking so I need a little time to learn the basics. I'm getting started with the BP ultimate beginner's guide and the Kiyosaki books now. Still haven't made it halfway through yet but learning a lot. I feel like a lot of my questions right now can be answered through these sources and the forum discussions and I hate being spoon fed answers to dumb questions I ask (I have a little dignity left in me). When I feel I hit a wall I will message you for that meet up! Thanks guys, work had me busy the past week.
1 Reply
Michael Mazzella
Flipper/Rehabber · Honolulu, HI · Member since 2012 · 120 posts · 87 votes
9y
Aloha Gang,

Yes, the offer of coffee/coaching/MasterMind on Weds mornings that I offered to @Jonathan Cheng is open to all who read this thread. Several other peeps who saw this thread have messaged me and replied, and we met yesterday, with a few others scheduled over the following weeks. Every Wednesday, 8am-9am. @Adam Geike , yes, you're welcome to come when you can. ;-)

Seize the Day!
0 Reply
Connie G.
Honolulu, HI · Member since 2017 · 1 post · 0 votes
9y
Hi! Is there another meetup in the near future? Please DM details if it's still possible to join! Thanks!
0 Reply
Chris LumLee
Investor · Honolulu, HI · Member since 2017 · 187 posts · 108 votes
9y
@Connie G. I think we should set one up. I'm finding a lot of local people here now and think it's a good chance to get to exchange information.
0 Reply
Michael Mazzella
Flipper/Rehabber · Honolulu, HI · Member since 2012 · 120 posts · 87 votes
9y
Aloha @Connie G. and @Chris LumLee ,

We are doing another 'Jam Session' for Real Estate Investors on Monday, Aug 19th in the evening. (6:30 - 9pm). You can message me with your email address to receive location & details. We do these when we can, there is no cost and no sales pitches! At this event I will be talking about private lending, setting up investment Hui's (syndications), and then an open forum to discuss any REI-related questions from attendees. Its an evening of free coaching. I usually give insights into the local Oahu RE investing market, what's working, what's not working, etc., and we usually review 1 or 2 current deals, so you can see the numbers, how I found it, funded it, problems encountered, etc. Usually, about 50-60 investors show up at our Jam Sessions. Bring all your hardest questions and I'll give you straight-up answers.
0 Reply
Jasmine C.Pro Member
Real Estate Coach · Reno NV · Member since 2015 · 273 posts · 61 votes
9y
#@Michael Mazzella hey Michael. Just happen to be in bigger pockets and noticed this post. I'm starting to gain back my sanity after having my son so I'm going to try to make this next jam session. I feel like I've been MIA on all the rei events lately and I'm excited to get back into networking. I barely was able to make my own rei meet up last month. Haha. If you want me to post your event on the market place let me know.
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Michael Mazzella
Flipper/Rehabber · Honolulu, HI · Member since 2012 · 120 posts · 87 votes
9y
Aloha @Jasmine C. Congrats to you and CJ on your new addition - I loved the photos on FB! It'll be good to see you again. Let me know if there are any 'hot topics' you and your leeward group would like me to address. Email blast for this event will go out to my mailing list tomorrow or Saturday. Yes, feel free to post the info - thanks! The more the merrier!
1 Reply

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