All Forum Posts by: Doug Nordman

Aloha Marc, and I'm sorry you had to leave the islands in the first place!  

Thanks for listening to the podcast-- I'm good friends with Mindy, Scott, & Brandon, and I really enjoy the process of recording the Q&A. Carol and her family are taking five weeks of leave to spend most of November & December over here with us. I'm not sure whether they're more motivated by North Shore surf or by free grandparent babysitting.

It might be worth your time to visit the base legal service office to have them either consult with their counterparts on Oahu, or to help you write a lawyer letter.  Their letter would be considered education on the applicable requirements of the Hawaii landlord-tenant code (and on the many ways to pursue legal remedies) instead of threatening a court appearance.

Thanks, Andrew, I know there'd been a moratorium of sheriffs serving evictions (and the courts were too backed up to hear them) but I don't know if that's restarted.  I'm familiar with the judge calling both sides into chambers for scolding them into mediation before wasting more of the city/county court resources.  Good mediators still charge less than the rest of the process, and they're worth it for the communication assistance.

Joni, Andrew, do you know whether the small-claims courts or the district courts are hearing landlord-tenant cases during the pandemic restrictions?

I realize evictions are a whole different issue, but I thought that the courts were still backlogged for months on landlord-tenant disputes.  It might go straight to mediation.

Aloha Jacob, I'm a retired submariner who's lived on Oahu for over 30 years.  I post to the MMM forums as "Nords."

If you want to invest in real estate, then invest where the numbers make sense.  "Buy a home at every duty station" was about as good as we could do in the 1980s before the World Wide Web, but you have the tools and the team-building skills to invest anywhere on the Mainland.

In general, Oahu real estate is fully priced and doesn't meet the 1% thumbrule for investment properties. Your housing allowance seems like a lot of money until you start shopping.

On a military housing allowance, the easiest and least-risky way to invest in Hawaii real estate is to house-hack with roommates. If you want to invest in more rental properties with your excess BAH then I’d suggest looking anywhere else on the Mainland where the 1% thumbrule works (at least a 6% capitalization rate)-- and where your invested dollars will go a lot further.

On the other side of buying a home in Hawaii while you’re on active duty, I get many unhappy e-mails and other comments from people who’ve bought here and then can’t cover the sales expenses.  Your property is highly unlikely to appreciate enough during 2-3 years to pay the 5%-6% realtor's fee (paid by the seller) in addition to the closing costs (both buying & selling) and any staging fees.

When military families inevitably transfer off the island, they’re not able to cover all of the landlording expenses either.

House-hack on Oahu and buy your investment rental properties elsewhere.

Side note: if it's any consolation, the VA has lifted their lending limit on loans originating after 2019. From now on the only limit on your borrowing is whatever the lender will give you for a debt-to-income ratio, and the VA guidelines for lenders will sometimes encourage them to approach 50%. It depends on the lender now.

In general, Jared, Oahu real estate is fully priced and doesn’t meet the 1% thumbrule for investment properties. As you’ve noted, $2700 seems like a lot of housing allowance until you start shopping.

Waipio Gentry and Mililani single-family homes have low HOA fees. (Townhomes and condo developments in those neighborhoods, though, still have higher fees.) If you're stationed at Schofield Barracks then that's a reasonable commute.

On a military housing allowance, the easiest and least-risky way to invest in Hawaii real estate is to house-hack with roommates. If you want to invest in more rental properties with your excess BAH then I’d suggest looking anywhere else on the Mainland where the 1% thumbrule works (at least a 6% capitalization rate)-- and where your invested dollars will go a lot further.

On the other side of buying a home in Hawaii while you’re on active duty, I get many unhappy e-mails and other comments from people who’ve bought here and then can’t cover the sales expenses. When they inevitably transfer off the island, they’re not able to cover all of the landlording expenses either.

House-hack here and buy elsewhere.

Sue, it's not about doing the right thing-- it's about whether it's even worth doing.  We've lived on Oahu for over 30 years, and there's no way to keep centipedes out of a house any more than there's a way to keep out houseflies or spiders.

Centipedes are a part of Oahu life, just like mosquitoes and cockroaches.  An exterminator can kill the centipede that's in the house at the time of the spraying, but it won't deter outdoor centipedes and it doesn't kill new trespassers on contact.

When tenants take care of the place (clean & neat) then there won't be "a ton of centipedes."  A spray of insecticide from the can takes care of the ones that wander through every few months.

I haven't had one walk across my face yet-- they can sense body heat and they prefer to avoid it-- but I've had my share walk across my feet.  It's an unwelcome thrill but I've never been bitten/stung, and a couple shots of insecticide on the centipede will take care of them. 

Anna, we've lived on Oahu for 30 years.  My spouse and I bought our last three homes without realtors.  We've also sold two homes without a realtor.  Most of that is because we don't enjoy having to work through gatekeepers, and we might be control freaks.  

There's no requirement to use an attorney in Hawaii, and the hardest part of the deal is getting the other side of your transaction (and the title company) to agree on a standard contract form.  (The Hawaii Association of Realtors forms are technically only available to their members.)  If you're a buyer without a realtor then you may be viewed with skepticism by the seller's realtor unless you have a lender's prequalification letter or proof of funds.  It probably helps to make a full-price cash offer, too.

Realtors are more of an insurance policy-- if everything goes fine then you can buy or sell without one, but if things go bad then they're essential to help complete the deal (or to trigger contingencies and walk away).

As Duc says, buying without an agent only helps the seller's agent keep the entire commission.  If you're selling without an agent then you could tell a buyer's agent that you'll pay 3% for a full-price offer (or some other incentive), but they may prefer to skip your listing and work with other sellers who have realtors.  If you're a seller working directly with a buyer (no realtors) then of course the two of you could immediately cut the price by at least 3%-6%.

Have you contacted Duc Ong or Derek Okahashi to discuss the details of your plans?  One of them may be a good fit for you.

Mindi I'd suggest that learning how to build a team in Indiana is cheaper and less risky than trying to find a bargain here.  
From The Mail Buoy: Hawaii Investment Rental Properties

Anna, for the loan part on a non-conforming property I'd recommend Joe Schmitz of C2 Hawaii. (Please give him my aloha and another mahalo nui loa.)  He helped us through a refi that went far above and beyond his fees.

I think ADU permits are today where photovoltaic systems were 15-20 years ago-- DPP is still figuring out their process. If you use one of the more standard ADU plans then the biggest permit issue will be the DPP delay while they work through their backlog. It might be a little faster if you use the Honolulu DPP office instead of Kapolei, because Kapolei seemed to route most of their admin down to Honolulu for review.

If you encounter the appraiser Wayne Hutchinson from the appraisal management company, I would not use him. I'd advise telling him to leave your property, and then contact the AMC for another appraiser.

Sorry I’m going to miss this one, Brandon & David, I’m on the Mainland finishing up my rookie-grandparent qualification card with our granddaughter Arya.  I should have proficiency and be back on Oahu by late March.

Thanks for the property manager referrals that people have sent (separately).  We'll keep searching for one we can work with.

We paid this one for their $350 invoice, and that's all they wanted.  They still insist that they don't charge for a tenant moveout.