All Forum Posts by: Justin Sheley

@Joseph Lambert That’s awesome that you ended up moving there full time, I envision we may make the move the Kauai within the next fees years, just hard to pull the trigger on it with so much family in Illinois. However, I’m not sure if this is your impression, but there seems to be so much opportunity on the islands, particularly in the short term rental and service industry space. 

Looking to connect with other short term rental owners in Kauai and also anyone looking to invest there.

My wife and I have absolutely fallen in love with the North Shore of Kauai and will most likely be moving there at some point. We purchased a 1 bed 1 bath condo for $675k at the Sealodge last September, and just spent a month on the island rehabbing our unit. I've learned a couple key lessons during that time period and I'm very curious to hear from others if you have the same take aways as us.

- Labor is extremely hard to come by on the island. We planned to do most the work ourselves but wanted to hire out a few small tasks to local handymen or contractors. We found that most people we spoke to did not want the work due to it being too small in nature. We ended up doing the work ourselves since I have experience with rehabs, and we ended up saving a good amount his way. However, my lesson is that there is great opportunity on the island for anyone performing handyman services or working in the trades.

- The logistics of furnishing an Airbnb can be very challenging. Shipping time and delays make it hard to make a perfect plan for when items will arrive, and in the condo setting it was challenging on where to even send the items if we wanted to ship them ahead of time. Luckily we were able to connect with a friend who lives on island and ship alot of the rehab and decor items to his house ahead of time, so once we arrived on island we could begin the work without delays.

- Along the same lines, supply on the island is very limited. We learned not to just assume you are going to be able to grab a fridge, microwave, washer/dryer, ect... because odds are you may not be able to find it, and even if you do find what your looking for the options are going to be very limited. If you want a custom look to your home (faucets, lights, hardware, ect...) you're going to have to order those ahead of time.

- There are obviously many amazing homes and units being ran as short term rentals in Kauai, but our overall impression is that owners seem to be coasting a bit on the desirability of the island and not putting much effort into updating or staging. The majority of the units we have stayed in and toured are outdated and lack design. I believe this is partially due to the complacency I mentioned, but also the cost of rehabbing and the difficulties around planning a re-design probably discourage most owners from looking to improve.

- Cash flow can be achieved, but you need to set yourself apart to outperform the market. My impression of investors on the island is that, like me, most have invested there to blend their personal love for the island with an investment. Better cashflow can be achieved elsewhere, but if you want a slice of heaven and want to offset your costs or be profitable, that is possible too.

- Our love for Kauai only grew during our time there, the people and culture of Kauai make it an incredible place to raise a family. We see so much potential and opportunity on the island and hope to have a positive impact on respecting the island and also improving the housing and guest experience there.

I'd love to hear what other owners on the island think of their investments there. Our condo was averaging 85k in gross revenue a year when we purchased it. We are on pace to exceed that this year, and with the improvements made, it looks like its going to be realistic to cross over the 120k in gross revenue in 2026. We are currently looking to purchase another condo on the island as we speak, and also want to partner with a small number of owners to serve as co-hosts.

Hi everyone, I have a partnership that we are beginning to dissolve. We have 42 properties that we are looking to sell. Mostly SFH with a couple duplexes. We are open to selling in bundles or even individual properties. Feel free to reach out through BP or email me at [email protected]

Hi Keisha, let’s definitely connect, I’ll send you a PM.

As someone who owns a handful of homes in Rockford IL, I’d say don’t sleep on all of Illinois. You just have to take Chicago out of the equation 😂

Hi Anna, I’m born and raised in Rockford and my wife and I own and operate a long term rental portfolio. With Rockford being the 3rd largest city in Illinois it’s going to come with some very diverse areas and neighborhoods. As long as you’re buying in the right area crime has been a non-factor in our personal experience. We have also seen appreciation, but not necessarily at the same rate as the rest of the country. I think the draw to Rockford for a lot of investors is the affordability/rental demand which tends to make it easier to find cashflow. 
As far as the midterm rentals, I do have a few friends in the medical field in Rockford who have told me the demand for short term housing for travel nurses is very high. My wife and I are currently in the process of renovating a house for this purpose. If there’s anything I can do to help regarding Rockford feel free to PM me anytime. 

I'd be curious to hear from someone who is currently flipping homes in that 100k price range. It certainly seems in my market in Illinois that people are paying up for properties to a point that I can't imagine that they have much profit to speak of based on the comps in the area, especially after you factor in the short term capital gains they are going to pay on that profit. Are investors just settling from much smaller gains? Or are they banking that the ARV is going to be drastically higher than the current comps due to the lack of inventory in the market.

@Brian Simental I'd have to echo the point that @John Warren brought up. An LLC definitely offers some protection, but as mentioned earlier in this conversation so does an appropriate umbrella policy. I know from our personal experience we owned our first couple duplexes in our personal name and I am happy to have them wrapped up in long term conventional financing. We later quit claimed the properties to our LLC in order to transfer the ownership. Starting out you typically want to generate as much cash flow as you can in order to roll into the next deal and start to scale, so the 30 amortization you'll be able to acquire with a conventional loan will probably outweigh the initial benefits of purchasing it in an LLC.

Hi John, welcome to the forum and congrats on taking the first steps in real estate investing. I'm pretty biased towards real estate but between house hacking and the BRRRR strategy it has absolutely shaped our lives. I operate my portfolio in Rockford, but if there's anything I can do to help along the way just let me know. The beautiful thing about this business is I've encountered way more people willing to help each other than not, and I've definitely received my fair share of help from this website and other investors along the way.

@Erika Wilson In my experience financing with an LLC has broken down to two scenarios.

- If you want to take advantage of the great 30yr amortized conventional loans you'll need to buy in your personal name and then quit claim the property to your LLC after closing. We purchased our first 7 homes in our name and then later transferred the ownership to our LLC. The concern here is the due on sale clause that could be called when the bank sees the transfer of ownership. I didn't have an issue with that, but I know it's always pointed out as a concern.

- The other scenario would be to switch to commercial lending right off the bat. It's going to be much friendlier towards working with your LLC, and overall just an easier acquisition process. What you sacrifice typically is you end up with a slightly higher interest rate and an ARM. However, we found the switch to be very advantageous for our business.

I invest in Rockford IL and would be happy to connect you with a few different commercial lenders if that would be of help.