Find a partner or fund my own deal?
Kaneohe, HI · Member since 2017 · 11 posts · 5 votes
@Brian Nakagawa The only time to invest in a lease hold is if you are planning on making it a vacation rental and the numbers work or if the lease is at lease 40+ years and the lease rent is low. This is so you can sell later on. LH with short leases will not sell because noone wants to take that chance that the Fee holder will not renew and just take the property back. If you have a long lease the value will slowly go down but because of the high appreciation in hawaii you might be able to make a profit or break even. Also banks wont loan on LH with short leases because they know they cant get their money back, so the range you are looking at will probably not work.
Right now I think you should hold on to your money because the market is crazy right now. The prices I feel are overpriced (just my opinion) and the rental market is down across the island. Many landlords are dropping prices from what they used to ask and occupancy is taking longer to fill. So with buying prices going up and rental prices going down, the ratio is not good at all.
I suggest you just continue your education and watch the market. You could also look into house hacking, if the numbers work, do Lien sales, find off market deals to flip, or wholesale. Dont get suckered into investing out of state until you know what your are doing, thats how many people lose money. They think they are good investors just because they are making money in an upmarket, acquiring property after property, then when a storm hits or there is a down market they get screwed. Good luck.
@Brian Nakagawa The only time to invest in a lease hold is if you are planning on making it a vacation rental and the numbers work or if the lease is at lease 40+ years and the lease rent is low. This is so you can sell later on. LH with short leases will not sell because noone wants to take that chance that the Fee holder will not renew and just take the property back. If you have a long lease the value will slowly go down but because of the high appreciation in hawaii you might be able to make a profit or break even. Also banks wont loan on LH with short leases because they know they cant get their money back, so the range you are looking at will probably not work.
Right now I think you should hold on to your money because the market is crazy right now. The prices I feel are overpriced (just my opinion) and the rental market is down across the island. Many landlords are dropping prices from what they used to ask and occupancy is taking longer to fill. So with buying prices going up and rental prices going down, the ratio is not good at all.
I suggest you just continue your education and watch the market. You could also look into house hacking, if the numbers work, do Lien sales, find off market deals to flip, or wholesale. Dont get suckered into investing out of state until you know what your are doing, thats how many people lose money. They think they are good investors just because they are making money in an upmarket, acquiring property after property, then when a storm hits or there is a down market they get screwed. Good luck.
Aloha Brian. No need apologize. Good job for putting your question out there.
Sounds like your initial research is correct. Ditto to the points Royce made. In order to give much more, I'd have to know some of the finer details, but I realize you may not want to post that info publicly. I am happy to help if you ever want to talk.