056: Buying Rentals in the Mainland from Hawaii with Dean Ueda
Dean Ueda is a full-time accountant who had bought rental properties in Chicago, Las Vegas, Denver, and his home state of Hawaii. Dean is in the process of buying a turn-key rental property in Milwaukee and hopes to go into real estate full-time. On this episode of the InvestFourMore Real Estate Podcast I talk to Dean about how he has found and bought properties from long-distance.
I also talk about how he recently acquired his real estate license and what his plans for the future are. Dean was born and raised in Hawaii and discusses the Hawaii housing market and why it is so tough to be a real estate investor in the state. Even though it can be difficult, Dean has purchased multiple houses in Hawaii and has done very well with his investments.
How did Dean get introduced to the world of real estate?
When Dean was younger he and his girlfriend decided to move in together. They thought buying a house would be the best way to complete that task. Dean purchased a town home and although the relationship did not work out, buying real estate did in a big way. Dean sold his town house for a huge profit five years later and paid no taxes on that profit, because he had lived in the property. Dean was able to use that money to buy another house and start investing in real estate as well.
Why did Dean buy properties in so many different locations?
Dean loves Hawaii, but housing prices are very high in the state. He has bought investments in the state for appreciation, but it is very hard to cash flow. Dean wanted to diversify his investments so that he was not banking everything on appreciation and decided to buy in different markets. He loved to go to Las Vegas, so he thought that would be the perfect place to buy another rental.
Dean found a Realtor through help of a friend in the area and found a Fannie Mae Home Path foreclosure. When he bought the house, Fannie Mae was still offering 10 percent down investor loans with no appraisals required. Dean took advantage of this program and bought a town house for $140,000 that he rented for $1,300 a month. He was happy with the deal especially when it increased in value $90,000 in a couple of years. Dean ended up selling that rental and using a 1031 exchange to buy a property in Hawaii. Properties in Hawaii are a little different. The rental he bought in Hawaii was purchased for $305,000 and rents for $1,750 a month.
Where else has Dean bought rental properties?
Dean has bought a property in Chicago that was $145,000 and rents for $1,600 a month. That cash flow looks great on that one, but Dean warns that property taxes in Chicago are very high and eat into the cash flow.
Dean bought a property in Denver, because his family loves to snowboard, however it did not cash flow well because of the high property values in Colorado. He held that property for a short period of time, but sold it so he could better use the money he had invested in it.
Dean is in the process of buying a turn-key rental property in Milwaukee as well. This property he was able to buy for $70,000 and hopes to rent it for $1,050 a month.
What are Dean’s future goals?
Dean wants to continue to buy rentals and is getting his real estate license. Dean is planning to sell his personal residence in Hawaii and figures he will save about $20,000 by having his real estate license on that one transaction. Dean would also like to use his license to buy more investment properties in Hawaii and possibly help other investors buy properties as well.
For rental properties Dean has looked at buying multifamily properties in Ohio and plans to buy more turn-key properties as well. Eventually he wants to replace his income from being a CPA with real estate, so he can focus all of his energy on investing or being an agent.