All Forum Posts by: Lane Kawaoka

It depends on the price of the property. In higher rent areas 6-9% might be fair but for sub 100k properties 10-12% and 100% of first months rent is the range.

LOL every thing is negotiable if you can find something else.

Learn what is a sucker deal that is daisy chained around... versus a deal that is underwritten conservatively.

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-What are some great exit strategies when buying a rental property if you dont want to sell?

You will eventually want to sell... investing is a game of return on equity. As the value goes up you equity goes up but your return on that equity goes down.

-What is a conventional loan?

Conforming residential loan where you have the credit to qualify. A non QM loan terms basically suck.

-What is a "turn key property"/ "turn key company"?

Turnkey can mean a lot of things but its supposed to be ready for a green investor to take over. I started with this but you eventually get out of it as the turnkey providers charge a premium for the product.

A condo or anything less than 200k is like a 10k house in Detroit... it does not exist without huge issues. Dude every one who comes to Hawaii has this idea but you are like 50 years too late... you are better off finding something in LA or inland empire if you want to stick to a tier 1 primary market.

San Francisco, Hawaii, Los Angeles, Seattle, Boston are examples of primary markets which are NOT ideal for cashflow investing. It could appreciate but I consider that gambling. Sophisticated investors invest on cashflow where the rents exceed the mortgage plus expenses (and enough money to pay for professional property manage to do our dirty work). A lot of this concept is explained in the Keynesian Beauty Contest theory where only the top competitors get the most notoriety but the best picks are hidden in the field. So part of the game is staying away from the "dumb" amateur money.

Sophisticated investors look at the Rent-to-Value Ratio and look for at least 1% or more to be able to cashflow after expenses. You find the Rent-to-Value Ratio by taking the monthly rent dividing by the purchase price. For example a $100,000 home that rents for 1,000 a month would have a Rent-to-Value Ratio of 1%. Most people I work with live in primary markets (as opposed to Birmingham, Atlanta, Indianapolis, Kansas City, Memphis, Little Rock, Jacksonville, Ohio, or other secondary or tertiary markets) where the Rent-to-Value Ratios are under 1%. Plus we invest in red states so we have good landlord laws on our side too.

Inherently when you go through operation you will be faced with mini repairs here and there. You will gain experience managing these minor repairs from afar and might even build a little rolodex.

Its swimming on the shallow end of the pool of course but it helps.

I got out of turnkeys because you have no recourse as an OOS buyer to get abused by big repair bills... everyone things you are an absent rich owner.

Sam and I was in a Mastermind together a while ago... although I don't know what he does in his group I can vouch that he is a legit guy and cares a lot about his people. You can be sure he is not another fake it till you make it random real estate guru which are plenty out there.

Not really a thing called doctor loan... its just a marketing thing.

Check out my article about the Cons of BRRR.

https://www.biggerpockets.com/... this is coming from an Accredited investors POV who used to do turnkey rentals.

I personally would not do Remote BRRR as there is just a lot of risk with 1) risk of embezzlement with contractors 2) change orders and 3) bank doing bait and switch doing a lower appraisal and/or LTV on the refinance.

This is especially true for high paid professionals or those with a net worth of over $300,000.

Accredited investors (who used to own turnkey rentals) all laugh how they wished they got out of owning rentals sooner.

Why would you want to be the direct owner... better to move to LP with no management headaches, not having to optimize equity with refinances in the future, little to no liability, and no debt in your personal name... and no crazy tenants :P

If your net worth is over 500k, I can't really find a good reason to buy a rental property. Especially with the recent run up in Residential pricing (due to low supply)... Commercial (apartments) is where its at. Ultimately its all about getting away from the "mom and pop" retail investor who are buying turnkeys right now.

At this point I don't think you can go Turnkey with the market where it is. See more here https://www.biggerpockets.com/...