All Forum Posts by: Johnny Aloha

Welcome!

For anyone considering this strategy -- be cautious.  Only about 1,000 of the 22,000+ vacation rentals are legal.

http://www.hawaiinewsnow.com/story/27734228/city-t...

Just google "Hawaii vacation rental laws".  

Chances are you will not get caught, but I have seen firsthand neighbors call police and code enforcement officials when the vacationers were smoking pot, being loud, etc.  The fines are not something to sneeze over, and with Oahu's housing "crisis" I think it will get worse before it gets better.

Like I said initially -- be comfortable with the risk/reward tradeoff if you are considering this strategy.

Yes, you can make great money doing this.  Unless you get caught.  Make sure you are comfortable with the risk/reward tradeoff.

I know people who make a lot of money doing this, but I've decided its not right for me.

Welcome!

There was a podcast where the guest was based in NY (I think) and invested in large multifamily in Greenville, SC.  Which podcast was this?

I've gone through show notes and some of the guest profiles, but I can't find the investor.  Hopefully the forum can save me a lot of time re-listening to podcasts!

Thanks in advance.

@Brandon Turner

Welcome!

Great story, congrats!

@Sarah Lam  Congrats!  I've been wondering about you - glad you got something in contract!  Did you ever buy turnkey?

As a former military guy with lots of military friends on Oahu, I wouldn't waste the time with AHRN.  It's kind of a pain to setup IIRC, and everyone is on craigslist anyway.  Literally, I've worked with military who just hit "refresh" on CL every 30 minutes because places go that fast.

I'd recommend you overprice the property slightly.  That's what I do, because I've found if I price it at or below market I get about 50 emails in 8 hours!  If it's slightly overpriced I only get about 8-10 well qualified people over the first 24 hours.  I also schedule about 4-6 people per showing because inevitably one will be a no show, 2 will want something different, and 1-2 will be ready to sign a lease on the spot.  Competition among tenants gives you an edge - last time I had 2 people that wanted to sign, I went with the one that would sign a longer lease.

Also, when you place an ad, be as descriptive as possible.  I tend to prioritize responses based on how/what they put in the email, and have had excellent, low hassle tenants as a result.  I don't really respond to the one liners - "interested" or "call me" just gets prioritized lower on my list.

I think you'll do well with that investment, especially if it is near the new rail line.  Don't forget to pay the general excise tax (4.5% of gross rents) every December.  

If I can help in any way, feel free to PM me. 

Cashflow on Oahu is very possible, glad you are jumping in!  Have fun!

@Brandon Turner  You probably already know this, but I'd recommend you stay away from leasehold - the value actually declines as you get closer to the land lease renewal date.  Fee simple only!

This will be highly dependent on asset type and class, market, strategy, etc.  A turn around project might have low cash flow initially but a big payoff (via sale or refi) with a couple years.  I've seen some "long term" purchases, though, where initial yield was only 5% (with an interest only loan!).

Kevin Bupp did a podcast with an investor (Jeremy Roll) who only invests in passive syndication. If I recall correctly, his minimum criteria was 10% cash return from day one, with 20% IRR over the life of the project.

If you are going to invest, make sure you understand the deal, the market, and the sponsor very well.

Wow, sorry to hear about all those problems.  I've had the complete opposite experience.  So much so, that I forget I own the properties!  Rents come in early electronically, I never get calls or emails, etc.  Properties are all kept up great.  

Of course, we are on different islands and I suspect the job market and demand for quality rentals is the reason for our different experiences. 

Best of luck.