All Forum Posts by: Michael Mazzella

Aloha Gang, 

Yes, the offer of coffee/coaching/MasterMind on Weds mornings that I offered to @Jonathan Cheng is open to all who read this thread. Several other peeps who saw this thread have messaged me and replied, and we met yesterday, with a few others scheduled over the following weeks. Every Wednesday, 8am-9am. @Adam Geike , yes, you're welcome to come when you can. ;-)

Seize the Day!

Aloha @Jonathan Cheng ,

Got your message - Every Wednesday morning I have a coffee 'mini-mastermind' session with different people before my company operations meeting starts. If you can break away on any Wednesday from 8am - 9am, I'll be happy to sit with you. Bring all of your hardest questions with you, and a notebook - and you can fire away - no question is off limits. Message me with a date that works for you. @Michael Gayer Jr , once Jonny sets a day/time with me, you're welcome to join us.

When it comes to REIA groups & other REI-related groups, there's an excellent article here on how to find a good one, and how to steer clear of the bad ones (note - Hawaii has both): https://www.biggerpockets.com/renewsblog/2008/12/28/find-real-estate-investing-club-avoiding-bad-clubs-succeeding-good/

Create an Awesome day!

 (and also to my 2x Michael brothers)

Interesting thread, here, guys! But there are entirely too many 'Michaels' posting here. Yesterday's Wall Street Journal had an article that the name 'Michael,' having reigned supreme as the #1 boys name for decades, has lost its popularity lately. So despite appearances on this thread, apparently we are becoming somewhat more scarce! That's probably a good thing. ;-)

I noticed the same thing that Michael B noticed when I read that particular post of Jonathan's - It jumped off the page at me like a big red flag; I could hear my 'BS detector' alarms going off (okay, maybe that was just in my head...). Using a financial planner/financial advisor for advice on RE investing can take you out of the game very quickly here. But don't sweat it, Jonathan, it's common for people to do that. Read on...

As one of the leaders in the house-flipping space here on Oahu, (currently flipping/building 50+ houses a year here) I can tell you that I do not see a lot of serious competition here in this market. There are several reasons for this. One of those reasons is that many would-be Hawaii RE investors are knocked out of the box early in the game by following marginal advice. (it doesn't even have to be 'bad advice.' Just off center enough to take you off focus on what is effective). Much of the marginal advice originates from the following sources.

1. Unsuccessful investors. There is no shortage of peeps in this category willing to advise you. The scary part is sometimes they lead REIA groups, Meetup groups, and sadly, they can even show up as coaches from some of the national training companies. They can sound legitimate. It only takes a few books and webinars before one learns to 'talk the talk.' When I take an investor under my wing as an apprentice, partner, or student, I frequently have to reprogram them and unteach them crap they've been taught. This is sometimes stuff they've paid top dollar for. Many newbie investors have not developed good critical thinking skills or strong "BS detectors" to discern the talkers from the doers. In our business, street cred only comes from doing plenty of profitable deals in the market in question. 
2. Real estate agents. In Hawaii, every 3rd person who walks by you has a realtor's license. They work hard for their money, it's insanely competitive, and it's a tough way to make a living. Most realtors in Hawaii cannot feed their families on realtor pay, and work another job to make ends meet. Generally speaking, realtors are not trained to be investors, and most of them are struggling just to be successful realtors. Even a successful realtor often knows very little about successful RE investing. They are entirely 2 different animals. A good realtor is a key player on our PowerTeam, (I love my realtors) but it's usually a mistake to seek investment advice from your realtor. While it can be difficult to know who the successful investors are, it's easier to tell who the successful realtors are in Hawaii. (Feel free to message me to learn how to find out in about 30 seconds, how successful your Hawaii realtor is). 
3. Friends and family members. This is a big one, largely because they may already be in your "inner circle" of trusted advisors. I saw a recent post that stated 'taking advice from friends & family is one of the leading causes of business failure.' I did not verify if this is actually true or not, however, I do see the point as valid - just because someone is close to you, and trusted, does not mean they are giving you good advice.
4. Financial planners. The whole idea of taking investment advice from a commissioned sales person has never passed the 'sniff-test' with me, and always requires additional independent research. There's a saying that goes: "Never ask a barber if you need a haircut." Yet much of what Americans know about investing was taught to them by a commissioned sales person. Same is true of insurance, by the way. So when they're doling out advice on RE investing... forget about it. 
5. Attorneys. A good RE attorney is an important player on our PowerTeam. They are our trusted advisors on certain specific matters. They can also be known as deal killers in our business, as they play the devil's advocate role and highlight legal risks, some investors will get frightened and walk away from a deal. This does not mean attorneys give good investment advice. That's not their job.

Well, the sun is coming up, and I'm a vampire. Gotta get my workout in. I hope this post will help some of my REI colleagues here in Hawaii and elsewhere.

Seize the day!

Aloha from Hawaii Kai, @Heather Castellano !

You're in a great place, both here at BP, and also in Wahiawa. I'm a big fan of Wahiawa, among other things, its a great little town for RE Investing. You won't have to go far to find the deals. At this moment, I have 4 deals in progress in Wahiawa. 3 house flips and 1 new build that we just broke ground on last week. Just made an offer on another 4-house development project. 

If you love Korean food, Dong Yang Inn totally rocks! ;-)

I think you're gonna love this business...

Carpe Diem!

~Michael

Aloha @Jay Hinrichs ,

I have not yet flipped any houses in Kahala. Came close a few times. Just did a vacation rental there. But as for the adjacent neighborhoods (Kapahulu, Moiliili, Makiki, Wilhemina, etc), these are all older neighborhoods and yes I agree, there are properties with multiple houses abound. When they can be legally divided they can become pretty sweet deals. 

Bro, next time you're here if you have some down time, let's grab a coffee. Time permitting, I'll show you a deal I'm doing in that area (Wilhemina Rise) that is 3 houses on 1 lot. I'll be dividing it, renovating and selling them off individually. In the next valley over, closer to town, I've got 3 deals in progress, 2 of which are small development deals where I'm renovating and/or building 4 units on each lot, which I'll divide and sell off individually. Fun and lucrative. 

We have a big shortage of housing on Oahu (7,500 units per year) so I'm trying to fill the gap, LOL! 

And yes, Jay, 2 points and 8% is still competitive here. LTV/LTC, non-recourse vs PG, and the remaining terms are important too, of course, but I'm seeing the cost of funds continue to drop and terms become more favorable as lenders compete with each other for business. One of my lenders just got bought out by Blackstone, resulting in even lower rates. I currently have $18,000,000 in private capital deployed here and we're about to go over $20m in the next 30 days when I close the deals I have in escrow. I think we'll be over $30m by 3rd quarter of this year. If you're looking to deploy capital here on Oahu, feel free to shoot me a message and we can discuss details.

Seize the day!

Hey, @Stephen Cole , you're very welcome. Glad I could help. Make 2017 the year you crush it and change everything!

By the way, the acquisition methods I use to lock up the killer deals, vs. the narrow margin stuff that I walk away from... are often the same. I buy a lot of houses from banks. So my point is, be relentless! Don't settle for narrow margin (i.e., risky) deals. Always be willing to walk away, remembering that the good lucrative stuff is out there. I've got 44 houses in progress right now on Oahu. If you can flip 2-3 houses a year here, you'll be in the top 10% of all income earners. One property I bought a few months ago has a $700,000 net profit after I develop it. Sweet, yeah? Well, it took 18 months of watching, waiting and negotiating before I landed that baby at the price I wanted. Now it'll take another 14 months to bring it home and get paid.

I hope this encourages you, Steve... Life is short, time is ticking away while you sleep, no one gets out of here alive, and the big secret that most people will never get their heads around is... there is no downside.

And having all this fun in the single most beautiful place on the planet is just gravy. ;-)

This is your wake-up call....

Aloha @Stephen Cole ,

I've got your back, bro - I have cash and can provide the proof of funds today for $500k to help you move forward, no worries. That'll buy you some time.

I think we differ on what a good deal looks like, Stephen. This is typically not something I'd pull the trigger on. The margins are too narrow for my tastes.

As an example, I have 3 deals in escrow right now. In terms of the margins, I'll describe the middle one (meaning one deal has a higher margin, the other is a bit lower). I'm buying this property for $820k, and I'll spend another $250k to bring the property to its best and highest. So I'll be 'all in' for $1,070,000. Then the property will sell conservatively for $1,500,000. I will be in and out in 9 months.

Seize the day!

Aloha @Stephen Cole !

Today you saw one of the 40+ houses I am flipping on Oahu - it's pretty ratty-looking, yeah? (Good to see ya, by the way!) While most of the houses I buy can be considered ugly, to me... they're beautiful! As investors, we know it's another 6-figure paycheck a few months down the road after we apply a bit of 'rehab magic.'

When it comes to the marketing aspect, I think that "Steve buys houses" is going to be more effective - and more accurate. Why take the chance you could inadvertently offend a seller who may otherwise provide you with your next deal? Also, some of the houses I buy are not distressed at all - sometimes it's just the owner that's distressed financially. 

Seize the day!

~Michael

Aloha @Mars Vega,

Sure - PM me with your email address, and we'll add you to the mailing list.

Thanks for posting this, Jasmine!  We've confirmed over 70 RSVPs, and reached the maximum room capacity, so unfortunately, the event is closed to anyone who has not already received a confirmation. 

For future events, all Hawaii real estate investors are welcome. These informal 'Jam Sessions' have become very popular, and we reach capacity pretty quickly. If you'd like to receive earlier notification, you can message me to get on our mailing list.

For those of you who got in, bring all your investing related questions with you, and we'll see ya soon!