Going on a Buta Hunt

We're gonna pick this up where we left off before venturing to more recent items.

Looking back at Holomua, I knew the time was past making amends with my first choice. Bigger and Better were the two words that were my new mantra. I kept checking MLS (multiple listing services) with www.oahure.com looking around for things in my price range and consistent with my list of wants.

The amount of different architecture, floor plans, building pros and cons are staggering. Mankind is not created equal and neither is the housing that he builds. If you're looking, remember that you will most likely make a concession or two about something. There were many instances of this happening to me. I was originally interested in Kinau Lanais since it is so close to my work, however, the first apartment that really caught my eye was a unit on the 40th floor in the Regency Tower.






This is your view. You can see the appeal.

It so happened that this unit was a little out of my price range, and the seller was in no hurry to sell and stayed firm on his price. This door was closed, but seeing as I was interested, Christina helped me out by sending me MLS listings which often coincided with properties I was looking at on my own. Except for a few open houses, she started making appointments to see the often vacant units. I went to King St, Prospect St, Kinau, Date St, and a few others. There were different things I liked and disliked about each. Some were renovated, some needed renovation. We would usually check general building appearance on the outside, how many elevators, where is the parking located, and then we'd be in the unit and I imagined myself living there.

To make an analogy. It's like going into a clothing store. You really wanted a shirt, and then there's two that are similar, one fits better, one is a nicer color, and then you'll see a pair of shorts and etc. You get lost in options, because each property is going to fit you differently and provided you made some semblance of a list you can narrow down some and consider others. As a warning, you need to make your decisions quickly, especially in highly desirable buildings. When you are the first offer, you have some power to negotiate the price down. When you are in contention with other buyers, you do not have the luxury of naming what you think the unit is worth; you have to "put your best foot forward" and be OK with losing that property. Many units we visited that I decided not to act upon, ended up in escrow within a few weeks.

What also helped me get ahead was being pre-qualified for a certain loan amount. This gives you a time advantage because other serious buyers will need to be pre-qualified to put up an offer. No seller will commit to selling you a property you can ill-afford.

Having this one-up on the competition we went to Kukui Plaza and I really liked it. The layout was awesome, the space felt very large, the amenities were great. Only thing was community laundry (which isn't so bad there because there are washers/dryers on each floor and some units with w/d inside), and what seemed likea lack of open fresh air. There was a listing for an open house on a high floor the weekend after I visited a unit on the 15th floor and it so happened a Regency Tower open house on the same day. Valynn took me to both open houses and the start of a new lengthy process begins soon.

Fun Little Things You Should Do Anyway

Hey you!


Check it out. These are FLTYSDA even if you're not in the market to buy a home. I'm jumping the gun here on story time a bit cause you don't run into this till you need to go thru your bank/lender but it's good practice anyway:

1. Keep your bank statements, credit card reports and any other financial activity organized and up to date. The lender or bank will want a copy of any and all assets to your name. Usually not credit card reports, but checking and savings statements for sure.
2. Keep your paystubs, they're documentation that you actually work somewhere and get paid. I've been asked for paystubs from 2 months ago. If your paystubs are like mine w/o the company name, you may need to scan in your actual check, or a check stub.
3. Your taxes should be filed away, have a copy of your federal and state tax forms with your corresponding W-2's.
4. When you write out your deposit slips, make a copy for yourself, or note what you're depositing. This is especially important because deposits $400 and larger need to be documented to show they're legit. I have a few deposits where I had to go back to the bank and ask them because I could not remember what combination of check/cash I put in. Luckily BOH scans your deposit slip along with your checks so I was able to show where the deposit came from. If you cannot prove your large deposits, the feds won't back you and that account does not get included for your assets toward a loan.
5. Credit. You need it. The better your score, the better interest rate you can get. Sometimes you can buy points for a lower interest rate, but with a better credit score, and more assets, you can get that same interest rate for thousands less. TransUnion, Equifax, and Experian are the three, you can your free credit report once a year from here www.annualcreditreport.com. Your credit history (comprised to credit cards, loans, etc) might not give you your score but it will give you a good look at if you pay on time, how many lines of credit you have, etc. The lender told me the magic number is about 5-6. Without proper credit history, your credit score will suffer like mine. My credit score is good not excellent due to lack of history, even though I have no delinquencies. Everyone's case is different, but the more credit to your name, the better. You can write to credit card companies to raise your limit as well if you need to. If you find yourself lacking credit don't fear getting another credit card UNLESS you plan on not paying it off (not a swell idea), you are highly in debt with other cards, or plan to never use it. The key word is that they look at history. Start early, use your card where you might use cash sometimes and just pay it off in full. This magic number will either haunt you, or accompany you through life, start early.
6. Budget. I will admit my budget is very loose. But it's better to have it written down or in a program somewhere so that on the rare occasions you document your spending, you can see where it's going. Try to allot certain amounts for things like going out, clothes, entertainment and see how well you can stick to it. Even $5 here and there goes a long way. Bring home lunch, rent a movie, share food, eat to be satisfied and not stuffed ( you might even lose weight doing that too).
7. Don't wait forever. If when you decide to buy the interest rate is super crappy, justify reasons to hold off. When you find the place you want, you have to move on it. You can't hesitate on property. If you love it enough to suffer a mortgage that means someone else might too. There's a luck factor in there but your best bet is to make your own luck and be proactive. Browse listings, contact a realtor (I used and recommend Christina Nishiyama) to make appointments, or go to open houses.
8. Get pre-qualified at the least before starting your search. Work with your realtor and call a loan officer. I used Primary Residential Mortgage and talked to Nelson Oyadomori. Pre-qualification will give you a good idea of what you can really afford. The initial call will take about 10-20 minutes of your time. The loan officer will check your credit history (see #5), and verbally obtain your monthly income and assets. Don't lie. If you move forward on a property you will need to be pre-approved and that is where they will start collecting physical proof (paystubs, statements, etc) of your finances. The best thing about pre-qualification is that it keeps you in check. You know what your price range is and can narrow down the properties you want to see saving time for not only yourself, but your realtor!
9. Be patient. Breathe deep. Someone is preparing to lend you a lot of money. They're gonna want it back with interest. I hope you made that budget and are ready to plunge. Just think, all the cool kids are doing it. Like me :)

To Holo or not to Mua

We're still back in time. To recap, Nakata and I are currently onboard for Holomua. Due to their schedule, they need to secure buyers. I think their system is fairly common. Once you reserve your unit, they need you to be pre-approved for the loan, which requires your state and federal taxes and 2 months of paystubs. Shortly after confirming whether you can afford to get the required loan, they need you to contract and open escrow with them. Opening escrow usually requires one to two thousand dollars. They also expected a 5% downpayment for your unit upon contracting, so make sure you've got liquid assets before even setting foot in the housing market.

On to the affordable housing situation. As stated earlier, Holomua was an affordable housing project. My understanding of it is that the state invests money in the development making artificially cheap (hence affordable) units for you to buy. You must qualify for affordable housing. Some requirements include your income being in a range of levels, you have not bought affordable housing in the past so many years, you do not currently own a home, etc. These affordable units also come with a few restrictions and clauses:

1) No selling/renting of your unit for 10 years (in other words you are an owner occupant and must live there) unless circumstances arise where you need to (loss of job, household members increase due to marriage, children)
2) No renting of your unit unless authorized by the State. Time the unit is rented does not count toward your 10 years of being an owner occupant.
3) Upon your completion of 10 years living in your apartment whatever money the state put into your apartment you now owe to them along with interest. After paying back the State your property is now your own, free and clear.

The above are not all the rules, but you get the gist that with some sacrifice, owning a place can be done so long as you remember that you do not own it until you repay the state on their investment. For those planning to rent out their affordable housing be warned that the State will periodically check if you are there via letters, and that so long as your name is on the deed to that property it should not appear on any other properties. It's not all bad, and because you buy your home below market value, should the need ever arise to sell you should be able to pocket a little and be able to pay the state back assuming your selling price covers everything.

I was ahead of Nakata in this process due to some really horrible realtors just jamming us both up, Nakata more than myself. After contracting and writing them a check I was allowed the usual 30 days to make up my mind. During this time the affordable housing along with cozy living conditions made me do a few double takes. The expiration date of my decision fell upon me the day after Valynn, Nakata and I went to Seattle.

On the way there, when we were there and a few other times I not only pestered Nakata and Valynn, but also Christina my sister and realtor. In different ways, everyone told me the same things: I have a comfortable living situation at home to save money, an older place might be larger with no restrictions, Ultimately, after going through so much, I decided to back out of Holomua, very unsure of if I had done the right thing.

Introduction

So you wanna be a rock superstar?

Hell ya I do. Unfortunately, it's not gonna happen. I do however, want to be a homeowner.

Rewind. Welcome to April 2011. My Dad tells me about this new development called Holomua. I've been dreaming of finding a place for awhile. Don't have much saved up, just enough. Hell, I'm lucky to have a job. Anyway, we go to Holomua's open house. Lo and behold it's in the vacant lot where they're planning to build this high rise. My step-sister Christina is my realtor, and when one of her clients steps out of line I swoop in and snag his spot. 

Morning sunshine is beginning to heat up. Nakata and I arrived a little early and weren't expecting that long a line. We can't both take his place, so Nakata troupes to the back of the line which quickly snakes behind him. I"m jockeying in the first 10 people. They allow us in to the lot where they've scattered the ground with small rocks, set up canvas tents and round folding tables and chairs. We're quickly briefed, then it's out to a board with a list of all the units available. Think Jeopardy. Each block contains the floor #, parking #, size of unit and unit type. Another board elsewhere shows a layout of the unit, and another contains the textiles they plan on using.  Christina encourages me to be aggressive, she's taking pictures of the sign and anything else to answer questions from other clients. We've barely toured all the boards when they start calling out numbers in the order we came in to select a unit.

Okay, gotta decide fast. She tells me bugs and dust typically stop around floor 15, and noise gets less too. The only unit in my price point is a 354sqft unit. It faces across the street at another condo. For re-sale purposes Christina advises that I choose a unit that clears that other condo. I'm looking at the board, and from perusing Oahure.com, I have a good idea that 354sqft, although three times the size of my bedroom, is not large comfy living area. Even so, I can't afford anything bigger, and the other affordable units are face to face with the condo behind making my studio the best option for those in the affordable category.

My number is called and I go up to select a unit. I've been writing down all the available 02 units along with their prices. According to Christina, you generally add an extra $1K per floor you go up. The building tops at 22 floors and I choose the 19th floor. We immediately start filling out paperwork. What happened to Nakata? Poor guy is stuck outside the fence still, but eventually he makes it in and is able to choose floor 17. As I fill out and sign a stack of papers I go over in my head what's important to me in a place. 

Making a list, or at least recognizing things you want in your condo/townhouse/home is step number one.

To me, I wanted to be in a high-rise with a view (not a walk-up), low maintenance fee, covered parking, open air (not running a/c 24/7), washer/dryer in my unit, bathtub, lanai and preferably no pool or other amenities. Why no amenities? Simple, amenities cost money. The more you have, the higher your maintenance fee is. Holomua seemed to check off everything. Low maintenance fee, no pool, covered albeit compact parking, small lanai, washer/dryer in unit, convenient location and best of all brand spanking new.

The process of going through with Holomua took a few months. The developer of the project needs to secure funds in order to start construction. This project has failed to start once before. Building a tall building takes a lot of money, obviously, so there are financial institutions (in this case a bank) that needs to see good faith that there are enough owner-occupants and investors commited into this building so they will release the funding. They needed 67% of both investor units (units for those looking to buy, then immediately rent out) and affordable units (the state helped with the bill in exchange for affordable units - more on that later). During this period Nakata and I met with Christina a few times to discuss whether or not Holomua would be worth it. The affordable housing restrictions as well as unit size made her wary and gave the both of us a lot to think about.