Ewa Beach, HI · Member since 2019 · 6 posts · 3 votes
Aloha all I am trying to learn more about real estate. I live in Hawaii and with the economy here it feels impossible to buy and turn a profit in this market. Has anyone had any success? Please share your story
Will do. Care to share your niche and why you were led down that specific path?
I became a landlord without intentions or awareness of real estate investing when we moved into our current home and decided to rent our condo. Six years later I began listening to podcasts on real estate investing because I wanted to learn something new while working out at the gym. It was totally a random pick but it didn't take long for me to get hooked.
I started out thinking there is no way I can invest in Hawaii because it's so expensive. I went down the path of working with an out of state turn-key provider, got a property under contract in Ohio, then realized that I wasn't ready to invest out of state. I wanted to find a way to make something work in my local market. That's when I met @Isi Nau right here on BP and after several discussions with him was convinced that I could find a deal on island.
I am a newbie buy and hold investor, following a "slower" path to wealth building. I happen to enjoy my W-2 job, so my goal has been to supplement that with cash flowing properties that will provide additional income now and in retirement when they are (hopefully) paid off.
With that said, I will admit that scaling your portfolio is challenging in our market, especially because you typically need to put 20-25% down for investment properties. Depending on your individual circumstances, there are definitely ways to get in for less. If you find yourself feeling discouraged because the prices in Hawaii are so high, it probably means you are looking at all the wrong properties. Meet with an agent like Isi Nau who is also an investor and he can show you that it's possible to invest in Hawaii.
@Rachel Ararasato do you own your own home? One of the easiest things to do in Hawaii is buy, wait a couple of years for it to appreciate, then sell and keep the profits tax-free. Unlike Lance, I strongly believe in owning your own home, mostly because I see so many renters forced out of their rentals here in Hawaii when the landlords decide to sell.
Also if you own your home, you can house hack or turn it into a rental later. I got started in Maui real estate buying a duplex which I originally intended to rent, but then I lived in the upstairs unit, waited for it to appreciate then leveraged over and over again to buy more properties.
I have around a dozen right now that cashflow, and I just keep reinvesting. Happy help if you have any questions.
Listen to Loren.
Unfortunately my fiancé had to build our primary. We bought a half acre with her parents, splitting the cost, and we each built our own 1,100 sq ft homes. So we got something nicer than we probably would've bought on our own, especially for under 500k. But it's costing us almost 3k/month. Not a good investment.
We should have bought a fixer house and ohana, lived in the upstairs and rented the downstairs and ohana. By doing a rehab we could've created equity and by having a couple rentals we could've covered our mortgage (or close to it at least). Then I could've used the equity to buy more rentals. Then her parents could've bought something in the same neighborhood. But she had this dream for them to live on the same land as us, so she can go spend time with them anytime. It's an expensive dream.
The compromise was that I put all of my money into buying rentals and I would not be on the loan, since she had her parents income to help qualify, so my DTI didn't get hurt from this.
I really need to look into the laws on having a tiny home and run the numbers to see if that would be worth the investment. That would be the best way to offset some of the mortgage since I'm already paying for the land.
I bought a property in a primary market in 2009 for 350k and sold in 2014 for 450. Today its worth 550+.
You might say I'm dumb but I rolled that equity forward prudently and now in 2,600 units. And more importantly those are commercial not subject to the comp market.