Hi, I am new to the forum but have been reading the discussion forum and gotten some great info. I have found several properties that are selling for under the assessed value near the beach in Hawaii. I am doing a 1031E and want to buy at least 2 of these properties. This may sound silly but how do you know when you have a good deal? Is it the price per square foot? Also, how do I get financing for more than one home? I have a mortgage on my primary residence and am preapproved by the bank for puchasing one of the two properties I found. Should I see a hard money lender for the 3rd property? Are there any other options? I need money or a partner w/money quick! Thanks.
You need to know the comps in the area to determine if it’s a deal or not. Hopefully you can find a realtor that would help you with that. A good mortgage broker should be able to help you get loans. If you credit and income support it, there is usually not an issue with having serveral loans.
modern,
Are you looking to buy and hold or are you just trying to flip them? I am licensed in Hawaii and have done a a couple of deals there. My Aunt and my ex-wife (gosh I hate the way that sounds) both live on Maui. The main problem we ran into was the amount of time it takes to get anything done. Everyone there seems to work on Hawaiian Time meaning when it gets done is when it gets done. No rushing anything. I was there last October and there was tons of construction going on all over the place. People were buying as fast as they could get them built. I guess when good housing is limited you don’t have a slow down.
Well, it has NOTHING to do with assessed value. It has everything to do with your exit strategy for the property, the real value of the property, and what you can buy for.
Assessed value is only what a tax appraiser has set the tax value at. In a place like Hawaii, this can be ‘off’ tremedously in relation to a true value!
Keith
Thanks to all for the info!
Christopher, I am looking to buy and hold for 2-5 years. I found out very quickly that the pace in Hawaii is indeed slow. It took 3 months to rehab my 1st investment property, mostly due to the wait for cabinets and slow contractor responses. I finally found a contractor that I work well with. He is on time and was cool with me doing some of the work myself, he even helped out. I will definitely use him again. As far as comps go, it was kind of difficult to get true comps because the previous owner was a contractor that added on over 1,500 sf to a 1,500sf home, making it over 3,000sf. Most homes in this area are only 1,000- 2,000sf. So I based my offer on a 2,000sf home in this area. The home is in foreclosure (bank owned) and it has been on the market over 100 days. My realtor thinks my offer was dead on.
My only problem is the long wait to hear back from the bank re: my offer. I have a 1031E deadline of Nov. 2nd to identify a replacement property. In the meantime, I am looking for financing for another deal in the same beach area. I found another home that the owner is anxious to sell, but it is a tear down. I don’t have enough money to make another down payment and really can’t afford the holding costs as the home is rebuilt. Looking for a partner…
Being that November 2nd is less than a week away you had better start looking for a back-up in case the current property falls through. As for the third property if you have the credit score and the assets you might consider using a no ratio program. A no ratio program takes income out of the equation so it eliminates DTI issues. Hope this helps.
Hi Christopher,
Thanks for the info. It really helped. I put in an offer on my 2nd choice property just to make sure I obtain a property for the 1031E. Nov 2nd is indeed coming up quickly.
Does DTI mean debt to income? I am new so I haven’t gotten a hang of all these abbreviations. Thanks again for your help.
Sheila
Sheila,
Good luck on that offer I hope it works out for you. And to answer your question D.T.I does stand for debt to income. Just another quick fact regarding no ratio loans. They eliminate the “landlord experience” condition that can pop-up sometimes when you go with stated income loans. The landlord experience condition is when the lender asks for proof that the investor has a two year history of owning or renting investment properties.