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Read word for word from our radio episode below:
Team Lally Show with Duke Kimhan
Hawaii Pacific Property Management
Announcer: It’s time to enter the world of real estate in Oahu with Hawaii’s only true real estate radio show, the Team Lally real estate show. Grab a pen and get ready to take notes! For the next full hour, Hawaii’s premier real estate leader, Adrienne Lally and Attilio Leonardi will bring you the latest in real estate news and real world strategies on how they can guarantee to sell your home at a price and deadline you agree to! Or they’ll buy it! Now, here are your hosts, Adrienne and Attilio!
Adrienne: Welcome to the Team Lally real estate show, home of the guaranteed sold program or we’ll buy it. If you have any questions, just give us a call at 799-9596 or you can check us out online at www.teamlally.com.
Attilio: Alrighty, so hey everybody, this is Attilio! I usually talk about the uh, I used to do the Mom disclaimer but we’re going to go to the life coach moment. Life coach moment! That’s what we’re going to call this top of the hour, right before we do the quotes. And uh, so I want to talk to you about, I’m going to, you know on these first ones that I’m going to talk about, I’m going to mainly focus on—oh, by the way, if you hear anything on the show that sounds like tax or legal advice, we’re not doing that.
Attilio: No. But—
Adrienne: We’re not giving that advice.
Attilio: If you need somebody to give you great legal advice, who would we recommend?
Adrienne: You can call Myron. He’s awesome.
Attilio: What’s his number?
Adrienne: 352-6417. And you can check him out online at www.kamiharalaw.com.
Attilio: If he doesn’t know the answer, I’m sure he’ll point you in the right direction. Alright, so, uh, I want to talk to all our sales people, business owners that have sales people, sales forces, and I want to you about the three P’s that are holding you back. And I’m not talking about going to the restroom.
Attilio: What I’m talking about, the first one is, Adrienne, if you had to guess, what do you think the first one is? This holds, it holds back everybody in, even if I’m not in sales.
Adrienne: Uh, they’re procrastinators.
Attilio: I bought a book titled How to Stop Procrastinating. It sat on my nightstand for three years until I sold it at a garage sale. That’s what the author talks about as an example. It’s a funny haha example about procrastination. So, again, procrastination. It’s the big one and what happens with the longer we draw things out, what happens as far as our stress?
Adrienne: You get more and more stressed and—
Attilio: It gets worse.
Adrienne: It builds, more and more things that need to get done.
Attilio: Okay. And then, perfectionism. Lot of times uh, sales people, they come into the office, they’ve got to get their cup of coffee, they’ve got to talk story, they’ve got to make sure that their, they got all the notes on the client before they give them a call, they’ve got to make sure that uh, they know exactly what’s going on with the product or this or that and get all knowledgeable and then they call the person and what does it go to?
Attilio: Voicemail! So—
Adrienne: All that prep was for no reason.
Attilio: So, avoid the perfectionism, you will always do better, just pick up the phone and start calling people. And get them on the line and start communicating with them to reach out to them, so that’s perfectionism. And then the last one is paralysis from analysis. What do you think that means, Adrienne?
Adrienne: I think that’s like, you’re just getting ready to get ready.
Attilio: You’re getting ready to get ready. And here we go!
Adrienne: And you’re never ready.
Attilio: If you are the person so afraid to call, that you can’t will your fingers to dial the phone, or your feet to move, so afraid of calling on strangers that you find it hard to go to work or even get out of bed, have a tip for you! Quit!
Adrienne: (laughing) Then get out of sales.
Attilio: Go do something else! Life is too short to spend your day doing something you hate. If you can’t get over that 900-pound telephone, that fear, by the way, uh, Teddy Roosevelt said it himself. The only, the only thing that you have to fear—
Adrienne: Is fear itself.
Attilio: Is fear itself. These people need your help. If your mindset is that they need my help, when you call them, they’re going to answer, and they’re going to take your help.
Adrienne: Okay, so I have some quotes.
Attilio: Go ahead.
Adrienne: Of my own. Actually, they’re not my own, they’re courtesy of Hawaii Pacific Property Management and Duke Kimhan. He sends them to us every day.
Attilio: I thought it was from the famous Philippine philosopher named Anon.
Adrienne: Well, there are, actually one of these quotes is from Anon.
Attilio: From Anon? Okay.
Adrienne: Yes. “Discipline is just choosing between what you want now and what you want most.”
Attilio: What you want now, so kind of, a little bit of delayed gratification right?
Adrienne: That’s right. Alright the next one is a Japanese proverb. “You can know 10 things by learning one.”
Attilio: Say that again, I, wait, wait, wait, one more time?
Adrienne: “You can know ten things by learning one.”
Adrienne: Alright and then the last one is from Pablo DeSarisant. “A genius for 37 years, have practiced 14 hours a day and now they call me a genius.” I think that also kind of goes hand-in-hand with uh, you know, mastery. Right? Having what, 10,000 hours equals mastery.
Attilio: Well that, that, no one, sure.
Adrienne: I don’t think, I don’t think your mic’s on, your mic’s not—
Attilio: There we go, he’s on!
Duke: I’m on, okay!
Adrienne: There you are.
Duke: So, if you don’t work on your goals, every day, someone will hire you to work on theirs.
Attilio: That’s a good one!
Duke: (laughing) When I read that one, I was stunned.
Adrienne: You’re like, it’s time to work on the goals.
Duke: It’s time to work on my goals.
Attilio: Yeah, if you don’t have any goals, you’re working on someone else’s.
Duke: That’s right!
Attilio: So, go, your number one on your goal sheet should be go get some!
Adrienne: Yes, and work on them. Alright, so I think we’ve got uh, Janyce on the line to give us her tip of the week on permits or design.
Attilio: Janyce! Janyce! What’ve you got for us? Welcome.
Janyce: Thank you! Today I wanted to talk about the 5-foot setback.
Adrienne: What is that?
Janyce: So, most people, what is that? Well, most people know that there’s an area on your lot that you’re not supposed to build out to and urban legend has the 5-foot setback well-known. Which applies to residential properties, so most people say, oh, I can go up to within 5-feet of my property line when I’m extending. But there’re qualifiers. So first of all, it depends on your zoning. Secondly it depends on the height of your house, and secondly and thirdly, it depends on which side of your property you’re talking about.
Attilio: Yeah. I think people need to realize too—
Adrienne: A lot of factors here.
Attilio: What if your fence is not on the property line?
Attilio: And you’re using that as the, as the, as the starting point for your 5-foot setback. We’ve had people that are like oops! Fence wasn’t in the right spot! And then we build this and now we’ve got to go knock this down and—
Adrienne: It’s a big mess.
Attilio: It’s hard to shave a house.
Adrienne: No, you cannot.
Attilio: Yeah. But uh, so, that’s a good thing to know about, that 5-foot setback. What’s uh, real-life situations where you come across, where they thought they were within that setback and they weren’t?
Janyce: Uh, most people know that you can use it on the rear and side property lines, but they’re not aware that as soon as your house is more than 15 feet tall, that the building on the ___ required to start sloping in. So, a two-story house cannot be 5 feet from the property line at any of its walls that are two stories tall and so that’s where people get in trouble.
Attilio: What’s the logic of that?
Janyce: Uh, well, there’s a bunch of different things we take a look at, so if you look at areas like Village Park, where just about everybody’s 5 feet from the property line at a single-family home. The allowed roof overhang, eave as it’s called in the industry, is 2 and 1/2 feet. So, that means that you and your neighbor, if you’re in such a situation, would have literally 5 feet between the edge of your roof and the edge of theirs. And you know, that’s not a lot of space if you like to have privacy in the space, but more importantly think about if there’s a fire and a windy day like today, then, if you were any closer, you’d practically be touching anyhow.
Attilio: I think that’s a good situation for a cat burglar though!
Attilio: Because they can break in to multiple houses!
Janyce: Cat burglar! (laughing)
Attilio: They can just jump from house to house!
Janyce: Neighboring cat!
Adrienne: Your children, I know my children like to climb on the roofs.
Attilio: Thank goodness you have, your neighborhood has proper setbacks. Because your kids would be jumping on your neighbors’ houses. But, alright.
Adrienne: Well thanks, thanks Janyce!
Attilio: Thank you, Janyce.
Janyce: Thanks! Take care!
Adrienne: So, you can reach Janyce at 206-7107 or check her out online at www.dreamhousedrafting.com. She’s got lots of helpful information there. Give her a call with your questions!
Attilio: Yeah, here’s the, here’s the one-time I’ll only tell people, don’t take notes. Just take a phone number down. You try and figure this stuff out, that’s complicated like this, hire an expert, you’re always better off going in that direction. Okay?
Duke: Janyce is helping me build my house right now.
Attilio: Is she? Good!
Adrienne: Awesome! So, we’ve got a—
Duke: She’s amazing!
Adrienne: We’ve got a happy uh, a happy client right here in the studio.
Attilio: Testimonial! From Duke!
Adrienne: From Duke Kimhan of Hawaii Pacific Property Management. With the, the man with the quotes. (laughing) Alright, so we’ve got, we’ve got Ben from AAA Roofers Hawaii with his roofing tip of the week.
Attilio: Hi, Ben, what’ve you got for us today?
Ben: Okay, so, uh, I’ve been coming across a lot of this where you know, you install an affordable tech system or a solar system on your rooftop, on a brand-new rooftop that was just completed, and then what happens is it gets all smudged up by uh, solar workers. And you know, there’s, there’s a bunch of good solar workers out there, you know, solar companies and whatnot, and then you know, there’s the ones that are a little bit different, right? I’ll just call it different. Uh, you know, a brand-new roof, they come and it’s like a brand-new piece of paper where they’re going to do their work. And then when they are done, the roof seems to be all smudged up. You know, from uh, the way they walk uh, the type of shoes that they wear and whatnot and then what happens is, now you have compromised the rooftop uh, you know, you won’t, it won’t have its full life expectancy and now the roof is really messed up, I mean I’ve run across a lot of it like that lately where it’s damaged. Uh, my best advice for that would be to have the solar company, or to have the contractor take some photos before and take some photos afterwards. You know, and, and just, just say, just say something like, you know, it’s, it’s something that I want you know, where if you could take some pictures before you do your work and then take some pictures after your work’s done so I can take a look at the work. Uh, then you’d be able to determine if it’s all smudged up or you know, I fit’s good or whatever you know, there are some now that are starting to use carpet to work on top of the roofs so that they don’t smudge it. Which is a good thing.
Adrienne: So, you can request, so if you’re thinking about getting a, a photovoltaic, you can request them, have, put the carpet down, don’t, don’t mess my roof up!
Ben: (laughing) Yes!
Attilio: Go outside your house when they’re on the roof and go, hey! Where’s the carpet?
Ben: And then you know what, truthfully I’ve done that, you know, I’ve done that, you know, usually with my work what I do is, you know, when, when, when our roof is completed and someone wants to put photovoltaic on top of the roof that we’ve completed, we ask the homeowner to come in, meet them, give us a call and let us know that someone’s going to be coming out on top of that rooftop to put PVs in or solar water panels and then I go while they’re doing it, so, you know, it’s, it’s more so protection for, if you’re going to penetrate this rooftop with some lag bolts, I want to see how you uh, watertight it so that it doesn’t become a blame game between he roofer and, and the solar water guys or the solar people. You know? Or, you know, pretty much, take a look at it to see if it’s all smudged up or whatever, you know, so I, I come and I double check all my work.
Adrienne: So, it sounds like you guys really take that extra level of service with your clients.
Ben: We have to because if anything happens, during that time, I mean, the first person to call is the roofer because it’s a roofing problem, right?
Attilio: So, when you, when they, when you get the call, maybe you guys should be like, oh! How’s’ your electric bill. Oh, it’s really low.
Attilio: Maybe, you know, because that’s what, you get the homeowner right, they’re like oh! You know what? I’m saving so much money on my electricity but my roof is leaking!
Ben: Yeah. You know, I, I, we want to avoid things like that. So, there’s been something, there’s something that should be really looked at.
Adrienne: Now, now Ben, how does it work in reverse, like let’s say that they already have like a whole full roof full of panels, and their roof needs to be replaced. Do you guys like work in, together with the PV company?
Ben: Yes, we will, we’ll work in collaboration with whatever solar company it is. We’ve been working with a lot of solar companies because you know, nowadays, I, I guess you’d say maybe around 35% of Honolulu has photovoltaic? You know, so when we go out, you know, uh, we would collaborate with whatever solar company it is. They come, they would detach uh, remove everything, including lag bolts and everything, and then we come in and we do the tear-off, the re-roof and everything else, and when it’s done, they come back in and they reattach everything. They reset everything and then at that time, we’ll be resetting everything. That’s when I come to make sure that, you know, that a lot of it is done correctly.
Attilio: I know you’ve called in to the show or been in the studio before and you’ve also mentioned that sometimes the solar company, they’re there, they’re primary mission is to sell solar and get it installed and that they should ask you to come out and take a look at the condition of the roof.
Adrienne: Just to make sure.
Attilio: To make sure that it, they’re not installing it on a junky roof! That’s going to have to be—
Ben: Yeah, there’s a lot of, there’s a lot of that also. Salesman will just come in and he wants, he or she wants to make their sale, and then what happens, they put it on a roof that has already, uh, passed the extent of its’ life and, and then now it’s, now it’s there, you know what I mean, and then in about a year, maybe two years, now you find yourself paying to have the roof uh, the, the photovoltaic detached and rest. I mean it’s expensive! You know, to do so.
Adrienne: So, have a roof check done if you’re thinking about adding PV, just make sure, call AAA, AAA Roofers Hawaii, they’ll come out and assess the roof!
Ben: Sure, we’ll be glad, we’ll be glad to come out and assess it for free.
Attilio: And you know, Ben, I heard this that uh, if they don’t have you guys come and check out the roof before the uh, put the new, put the PV in, it’s their own asphalt.
Ben: Yes, it is!
Adrienne: Alright, thanks Ben!
Attilio: Thank you Ben.
Ben: Okay, thank you so much.
Adrienne: So, that was uh, that was Ben with AAA Roofers Hawaii.
Duke: I think his name’s Benji.
Adrienne: Yeah, or Benji, at 531-2211, www.aaaroofershawaii.com.
Attilio: Check them out on their website, they’ve got a commercial, uh, locally-owned! Local family, locally-owned company.
Duke: Good guys!
Duke: They do good business.
Adrienne: I think, I think, you had your, your roof done by them, too!
Duke: Benji did my roof, he took my PV off and uh, re-roofed. Unfortunately, uh, 60% of the PV companies have gone out of business, so he’s struggling to try and get that done the correct way.
Adrienne: But he figures out a way to get it done. Because that’s what he does.
Attilio: Yeah, he’s been, him and his uh, and Toni, his wife, been in the business long time. And they have an excellent crew, they’ve done jobs as small as a single-family home and as big as an apartment complex!
Duke: They do work for our uh, property management company and we’ve found them to be uh, very responsive and responsible. Good people.
Adrienne: So, call, so, go call them up, you’ve got some very happy clients.
Attilio: Good testimonials.
Adrienne: And testimonials here. So again, you can reach them at 531-2211. We’re going to take a quick break, but stay with us, we’ve got, we’ve got Duke here!
Attilio: We’ve got Duke Kimhan from Hawaii Pacific Property Management. He’ll be talking about the best way to earn from a property you own and how to choose the right people to manage it for you! Stay tuned!
[Music fades to commercials]
Announcer: The Team Lally real estate show continues.
Adrienne: Welcome back and thanks for listening to the Team Lally real estate show, home of the guaranteed sold program or we’ll buy it. I’m Adrienne—
Attilio: And I’m Attilio.
Adrienne: If you have any questions you can reach us at 799-9596 or on the web at www.teamlally.com.
Attilio: Our guest today was born and raised in Honolulu and grew up in Manoa Valley.
Adrienne: He was first a restauranteur. Before delving into the world of real estate, he was a chef and owner of a fine dining establishment in Florida. He was also a general manager of the year for TGIF and owner, proprietor for Outback Steakhouses.
Attilio: His newest challenge is managing Hawaii Pacific Property Management division with Team Lally. Please welcome to the show, the principal broker of Hawaii Pacific Property Management, Duke Kimhan.
Duke: That’s quite an intro.
Adrienne: Well you’ve had quite uh, an eventful life!
Duke: I don’t even know who you guys are talking about.
Adrienne: And I think we missed a few things, too! We really had to, you know, scrunch it down, and it, you know, for the time’s sake here.
Duke: Yeah, well property management has turned out to be such a wonderful avenue for real estate, uh, I’ve done general real estate since 2001 and uh, that’s going across from cities like uh, Florida, uh, Florida cities where I’ve practiced and owned real estate and I own real estate in Las Vegas. So, it’s, it’s been very interesting growing up in Hawaii uh, I so love being you know, back home uh, yeah, born and raised here in Manoa, __ Roosevelt, KCC and then onto the mainland but, you know, the property management side is just so different than the buy-sell side of real estate and I’m, we, we’ve accumulated a very, very nice quality bunch of owners that really care about their properties and so, my job is in the absence of owner presence, to manage the home in the best way possible to, for two reasons, one to put money in the owner’s account and to protect their home.
Adrienne: Well you’ve got two uh, happy owners right here next to you!
Duke: Yeah, testimonials, there you go!
Adrienne: So, we have all sorts of testimonials on this show.
Attilio: You know that brings up, brings up a really good point. A lot of, you know, a lot of what we’ve found, it’s uh, been really good, easy to get into this industry, is you have a lot of the, the property management market is broken up by the agents that are doing 5-10-15 properties and they’re doing sales, and all the things that are involved in that, all at the same time, I don’t know how they can provide a high level of service as, as a specialized company as you.
Duke: Well I don’t want to criticize anybody, but a buy-sell agent doing property management as a secondary form of income does not stand a chance to compete against a property management company who does, strictly property management. For several reasons: one, we have a huge back house system, two we have the marketing that is unmatched in our field, and three, we have property managers who only look after your home. We do walkthroughs on a timely basis, uh, we can, we can care for uh, issues of maintenance that happen at the middle of the night, uh, and so if you’re a 5-10 kind of uh, property manager who does buy-sell on the, on the forefront, you cannot compete against that because that is not your focus.
Adrienne: Well you’re not able to give that level of service I know that you guys have had like floods and had to do full-on rebuilds—
Duke: Fires, floods, we’ve experienced it all.
Adrienne: Yeah! Everything, yeah. I mean, as your project managing, it’s a lot of work! When things go wrong.
Duke: We’ve probably rehabbed uh, maybe 15 homes to date. Uh, front to back, where the owner will come and say, hey, you know, can you update my home and that’s bath, kitchen, flooring, uh, roof, we’ve taken care of all that stuff.
Adrienne: Wait, so you have owners that are like, hey, you know I want to update and make my home, you know, nicer and be able to get—
Attilio: I want to get better tenants.
Adrienne: Higher rent.
Duke: When they rent their home for 25 years and now it probably needs a whole paint job on the inside, you’ve got to change out the windows, uh, the, the blinds and the draperies are all dated, uh, a lot of that stuff has to be updated. So, if you want to bring your rent to the 2020 market, you’ve got to update some of this stuff.
Attilio: Would you say that’s a good indication of a good owner? To invest in their property?
Duke: A lot of owners are very smart uh, or they have children now that are handling their investments. Uh, we’re getting that more and more where the, the first parent has passed away, the second parent is going into a nursing home, uh, and now the kids want to use the home that’s solely paid off as an investment to help offset the expenses for the, the parents and so, you’re getting $3,000-$4,000 a month, you’re offsetting your parent’s cost that run anywhere from $6,000-$10,000 a month. It’s amazing how smart they are in business.
Adrienne: So, so Duke, when you guys come across a home that’s, like that’s a little bit dated, do you go through like, you do like, tell us about the process and the conversations that you’re having with owners.
Duke: We make recommendations, totally. Uh, some things are safety issues like old appliance, uh, sometimes we have carpets that are severely stained or wood floors that are popping up and, and these are issues that are going to be safety issues and they’re going to be a deterrent to getting top rent in this market. The rental market is very competitive also, uh, it’s also got a smaller window of error than the buy-sell market because the rental market has less than 15 days of inventory. So, it’s, it’s kind of tough out there, but if you don’t have the product at the price that you’re asking, people will shy away in a heartbeat. Most of the time they will not tell you what’s wrong.
Attilio: So, the, the, you get the homeowner that’s like, hey! You know, in my green shag carpet and my chipped-up Formica countertops and my super dark cabinets, and my avocado refrigerator and, and range, can I get market rent?
Duke: Well, you know, market rent’s a moving target. So, a lot of times we just say no. And some of the people who refuse to make uh, updates or safety issues, uh, concern in their home, we just turn away from management.
Attilio: It doesn’t make sense to get sucked into that.
Adrienne: So, you guys offer these, you know, these suggestions for them to get the, you know, the best tenant and the highest rate. Now, do you have vendors, or project management, how does, like how does that work, because I know that can be kind of stressful to have all these things to do to get ready for the rental market?
Duke: We have a whole list of licensed contractors that we’ve done business with for almost 10 years now, so a lot of the people we have a good relationship with, and we can give a good time frame to the owner on how quickly we can get the house turned around and back on the market. The thing that’s the most important part of the rehab uh, the house that’s out there for 6 months, then you’re losing 6 months’ rent.
Adrienne: Yeah. So, the timely turnaround of these, these updates that need to be done is, is crucial.
Duke: Right. Summer’s always the busiest time where you have the largest amount of inventory but you also have the largest audience. So, right now, uh, we’re right in the middle of it, uh, going into July we’re going into the back half of the rental season. Once we get into the first week of August, it’s over, you know, school starts—
Adrienne: Okay, so it starts to slow down, so right now it’s like just crazy busy for you guys.
Duke: Crazy busy. Our phones are ringing off the hook. They can go to our website at www.hipacificpm.com and go to available rentals, you can look at all of our inventory there, I think we have 35 today.
Attilio: Oh, wow, so one of the, uh, we send out educational videos twice a month to our, to our loyal viewers and I know you guys do too, so they can subscribe at your guys’ website if they want to get those educational videos, but the last one we sent out, was number one mistake that property owners make the, the, uh, for-rent by owners, is they never raise the rent!
Duke: Sometimes they do not know what the market rent is and a lot of the owners will call us when their leases end uh, we judge that and gauge that by the market price of the home, so if the home is, uh, going to be selling for $800,000, you should be getting $3500 to about $4000 a month, just to cover your, return on investment. So, that’s the measure that we go by. A lot of times if they had a tenant in there for more than 5 years, they’ll give them a little bit of a break on the rent.
Attilio: Right, so basically you guys are doing a rental analysis, before you put the first tenant in and then probably at the, in between each lease?
Duke: Yup, and then we send the owners the recomps uh, and the re-up lease. A lot of times, most people in military will stay for 2-3 years.
Attilio: Gotcha. Alright.
Adrienne: So, okay, so, with uh, with, with property management, you guys have this uh, this rent guarantee. Talk to us about that.
Duke: Well, you know, we followed the guarantee sale, uh, model, and we went with the rent guarantee. So, the rent guarantee is fairly simple. Uh, I go to the home and I look at the condition and I say, this is what we can guarantee your rent for, and it’s never going to be at the top of the market, so let’s just say your house, we recommend a start at $3200 in rent, we’ll rent guarantee the home at $2700, but, so that’s saying that if you get down in price, down to $2700 and you don’t get anybody for 30 days, on the 31st day, we’ll pay that amount of money. So, nobody else in the industry is offering a guarantee in what they do.
Attilio: Yeah, and I think what people are, the listeners need to realize, that’s a backstop. You’re getting a backstop on that empty home as far as the mortgage payment, and, but, you know, you’re, you’re, the homeowners have to cooperate, there’s a quid pro quo, they’ve got to like, make the recommendations to get the house in rentable condition and allow you to do the marketing and all of that good stuff.
Duke: Right, so, if the owner says, hey, we, and we, we give them 3 or 4 qualified candidates. All above a 620 credit score with good uh, background checks, and they say, no, I don’t want that guy. You know, I want another guy. I want this guy, and they keep going back and forth and the rent guarantee kind of voids itself.
Adrienne: Yeah, because they, they have to cooperate right, you’ve, you’ve done your job, you’ve delivered the tenant to have the credit scores and the good background, so, yeah, they’re qualified, yup.
Duke: But see, we also have an eviction guarantee that says that if we put the tenant in that meets all of our standards and we have to evict them, then we’ll pay for the eviction. And so, the problem that my competition does is they charge the owner for the eviction. Even after they chose the tenant.
Adrienne: Yeah, so you’re—
Duke: I just don’t think that’s fair.
Adrienne: Yeah, so you guys are putting your money where—
Attilio: Behind your process.
Adrienne: Yeah! Because you guys have a, a, an extreme vetting process of your tenants, you’re very careful of making sure that you’re putting the right person in place.
Attilio: Talk about, you know, talk about some highlights on your guys’ process, when you’re, with these tenants.
Duke: So, once we get an applicant in that meets the qualifying credit score, they can apply right on our website, uh, once we get the application back and the uh, credit score back along with the background and criminal check, we actually check the last 2 uh, owners, the last 2 uh, landlords, yup, and see how they did and how they kept the home. On top of that we get a, uh, a verification of income and uh, paycheck stub. If we can’t get an accurate paycheck stub, if they’re, they’re moving here, we get a bank statement.
Attilio: You know, I got the best interview question was from a property management and Adrienne, do you remember the question?
Adrienne: It is uh, we do a very thorough background check. Is there anything that you’d like to share with us before we, you know, before we run this, because it’s better to come out now than us find out about it.
Attilio: Or just, you basically, yeah, we do an extensive background check, is there anything you want to share with us and you’d be surprised what people—
Adrienne: What comes out.
Duke: Oh, yeah, I had a bankruptcy last year and I had a divorce and this and that and, you know, it’s—
Adrienne: It all comes out.
Duke: It all comes out.
Attilio: Yeah, they’ll say stuff like you know, does your property owner press charges?
Duke: Criminal, right? Yeah. So, we, yeah, we do all that and then, and our third guarantee is we have a communication guarantee and, and that’s the biggest part of the reason why we get other owners is because they call their property managers and no one answer the phone! So, we—
Adrienne: And it takes them like a week to call them back.
Duke: Yeah, we’re a 24-hour turnaround, uh, we have a phone that uh, phone number that rings to all of our phones so somebody will answer our phone. That’s a guarantee.
Adrienne: And you guys have like assistants in the office, waiting, you know, to help. And at least, you know, take a, have that informed wait, right, for your clients.
Duke: Right, we have a full-time maintenance department that works 8-5, Monday through Friday, we even have somebody on the phones Saturday and Sunday for your maintenance needs.
Adrienne: Ah, seven days a week!
Attilio: And it’s not about bad-mouthing the, the solo agent, but just talking about the reality or the facts of it, I don’t know how a single agent can handle all of that and be available to take care of that when, you know, especially, you know, if you’re in a movie, if you’re in a movie with your kids for the next what, movies are sometimes 2 hours right, with the previews?
Duke: Star Wars, 3 hours.
Attilio: 3 hours!
Duke: Jurassic Park—
Attilio: How much—
Duke: Filmed in Hawaii. 3 hours.
Attilio: How much water damage can occur in 3 hours? Uh, you know, with a leak in the home if you know, the refrigerator or the drain hole’s popped off and the water’s going all over the place?
Duke: You know, we’ve had two really big incidents where a property manager wanted to go show a home, they opened the house, and the water came rushing out the front door. Past her. Along with everything that was floating in the house. And it was a hot water line that had broken, so it was hot water that came rushing out. Pretty amazing. The second is we had a lady put her groceries down on an oven, glass top oven, that was left on. So, the house caught on fire, uh, luckily, we had the tenants that had an insurance policy and the owners, so it covered all the repair, burned down all the cabinets, uh, it, they were out of the home for about 2 1/2 months.
Adrienne: Now, on this insurance, I think that’s an important topic. Because I know that you guys, as you’re onboarding your clients and your tenants, tell us a little bit about the insurance requirements.
Duke: You know, we’ve been recommending that owners get loss of rent coverage in their coverage because if there’s a catastrophe in the house, and the tenants are gone, there’s no rent coming in. So, during that 2 1/2 months, luckily, we had loss of rent coverage, uh, they take a copy of the lease, so, the owners got loss of rent coverage. It was pretty amazing.
Adrienne: And I think it’s pretty reasonable, it’s a very small amount for like the, the writer for that.
Duke: It is, it is, and Bradley makes it so easy, it’s one call, one stop shop.
Attilio: I think one of the big reasons why Adrienne and I, you know, we’ve been running our real estate, our, our sales-side real estate of the, of, of the business for, what? 10 years now. And we’ve had tons of people that come up to us, hey, do you guys do property management, do you do property management? And our answer’s been—
Adrienne: Go to Duke!
Attilio: Go to Duke! And the reason being, now if you’re an agent out there, here’s a tip for you realtors out there that are trying to do everything, be a jack of all trades and master of nothing. Avoid, here’s a risk management tip for today. Have a professional who will do that for you so that you can focus on the sale aspect of your business. And! What is the number one fear that agents have in handing over their clientele? What’s their fear?
Duke: That you won’t get them back!
Attilio: That you won’t get them back. But, what do you, what’s your response to that?
Duke: We have a 100% client return to agent guarantee, that states that we do not buy-sell real estate, if you refer your client to us, they will come back to you when they sell.
Adrienne: Now, I—
Duke: I promise.
Adrienne: I like it how like you kind of, you track the client. If they start asking questions about, like what’s the value, you’re bouncing them right back over to the agent that referred, like hey, you might want to give them a call, send them a CMA, they’re asking about values, so I think you do a, you guys do a great job of helping to maintain that, that relationship.
Attilio: Which is important.
Duke: Well the Lally team does 180 transactions a year, so 1/3 of all transactions are investors.
Duke: And uh, we’re happy to bounce them back to you.
Adrienne: Thank you.
Attilio: So, yeah, so here’s the—
Adrienne: You guys do a great job.
Attilio: Yeah, here’s a tip for you agents out there. I, a property that is being managed by a professional property management company, here’s the definition for you as a sales agent. That’s a long-term listing.
Duke: Long-term listing.
Adrienne: Long-term listing.
Attilio: It’s a long-term listing and in the beginning part, they may be in the accumulation phase, so those are other opportunities where you can make it turn key, where you can sit down with your investors, say hey, I’m going to identify properties, help you buy them, and here’s a company that’s going to take care of and manage your asset. Until you’re ready to sell.
Adrienne: But you guys also do rental analysis for the buy-sell.
Duke: For agents. Yeah.
Adrienne: For agents, to help them in their, like their marketing or just in general and helping them to work with investors.
Duke: I have about 15 agents that contact me usually on a weekly basis saying hey, what’s this property worth on the rental market, because their investors are asking those questions. And those are pretty important questions when you can get a credible answer uh, on how much investment or return on investment you can get back from an investment you’re going to make in Hawaii.
Adrienne: Well yeah, it’s going to determine what kind of offer they’re going to put together based on those numbers.
Duke: Absolutely, yeah.
Adrienne: Yeah, so give, give Duke and his team a call and they’ll, they’ll give these rental analyses, but when it’s time for the investor to, to rent—
Duke: That’s us!
Adrienne: That’s it, that’s right.
Duke: That’s what we do. 445-9223.
Attilio: You know, uh, explain it to me like I’m an 11-year old, you know, everybody hears this phrase, cap-rate uh, you know what’s the most simplest way that you can explain, you know, what is a cap-rate and why is it important that investors know what that number is?
Duke: Investment clients already pretty much know what the cap-rate is that they need to get, so in Hawaii the average cap-rate runs anywhere from 4-7%. Commercial buildings run a little bit different from that because they have a different expense rate, but if you’re looking at a residential cap-rate or capitalization rate, return on investment, if you can get somewhere between 5-7%, I think you’re doing great. And that, you take the uh, the total revenue from the, the property, and you divide it by the uh, purchase price. And then you get the cap-rate.
Adrienne: Nice. Alright, so I think we’re going to take a real short break, but stay with us, we’ve got more questions for Duke!
Adrienne: On property management.
[Music fades to commercials]
Announcer: It’s the Team Lally real estate show. Here’s Adrienne and Attilio!
Adrienne: Welcome back and thanks for listening to the Team Lally real estate show, home of the guaranteed sold program, or we’ll buy it. I’m Adrienne—
Attilio: And I’m Attilio!
Adrienne: And if you have any questions, just give us a call at 799-9596 or you can check us out on the web at www.teamlally.com.
Attilio: Well hey listeners, if you’re just tuning in, we’ve got the principal broker of Hawaii Pacific Property Management, Duke Kimhan, in the studio and we’re talking about property, real estate properties. Property investments.
Adrienne: Yes and, I know that we, we touched on your, you have several guarantees.
Duke: Several guarantees. We have the rent guarantee, the eviction guarantee, and the communication guarantee.
Adrienne: And then of course the 100% return to agent guarantee.
Duke: Yeah, for the agents out there, you bring us a client, we give you a, the first full property management fee back and we’ll give you a 100% client return back to agent guarantee.
Adrienne: I don’t think anyone else offers any of those.
Duke: I just want to do property management. It’s pretty simple.
Attilio: You know, we always, one of the big pieces of advice we give brand new agents, or agents, even if you’ve been doing this for a while, you want some balance in life, add people to your team and you can add Duke and his team to your team, as uh, as a service that you provide to your client. And it’s set it and forget it.
Duke: Set it and forget it, we’ll be accountable for them.
Adrienne: So, speaking about being accountable, how is it that you guys earn your money?
Duke: Well, you know, when, in property management, there’s several phases. One is the, uh, the find the tenant phase. And then the second part is to be accountable to the home. So, h ow we do that is we do a 4 or 6-month walk-through of your home and we set the, the uh, expectation with the tenant right from the upfront that they’re going to use professional services on the way out and in the meantime, you’ll have a 10-day warning if your, you’re wrecking the home or if your pet’s wrecking the home when we walk through it at the 4-month mark. So, if you don’t fix it up or clean it up or change the way you live, uh, you’ll be out of there!
Adrienne: So, you guys do a lot of preventative measures, right?
Duke: PM maintenance. We’re on, we’re on the tenants all the time. That’s our job.
Duke: We take pictures, we send them to the owners, we give you a copy of your 4-6-month walkthrough, let you know what your house and your lawn looks like.
Adrienne: Well I know that at one of my walkthroughs on one of my uh, rental units that you guys manage, we uh, we found out that there was actually the dog was not a small dog, it was like a humungous 90-poudn dog!
Duke: It was a mastiff. It was a 150, dog.
Adrienne: Oh, 150, I don’t even, I just know it was humongous and I was like, oh my gosh!
Attilio: That’s like getting in the range of a pony!
Adrienne: And I’ve got a, a tiny little 2-bedroom condo on the third floor I was like, oh, no! No, no, no!
Attilio: Was the dog’s name Trigger?
Duke: But, uh, what happened was the uh, tenant told us that he was getting a mixed breed after he moved in. So, after he moved in, we went to go visit and see the mixed breed, because he did not send us a picture, us, as I approached the second bedroom door, there was a loud and low bark. The size of a human being! So, I demanded that I get to see that dog. And so, once we did that, we gave the guy 10 days to get rid of his dog.
Attilio: That’s what happens when you breed a German shepherd with a donkey.
Duke: He was ginormous! He was big.
Adrienne: So, it’s, you know, situations like that, this is why it’s so important to have those walkthroughs and the double checks and the pictures of the animals you know, just to maintain the home, I mean I couldn’t imagine what my condo would look like a year later! With that huge dog staying in, you know—
Duke: Well he broke the front door on you.
Duke: And he broke some, some other pieces out of there, so we got, we got the guy out, and uh, he moved out, he didn’t want to get rid of his dog, so he left!
Adrienne: And that’s fine, that’s fine, he, as he should.
Attilio: If you’re a renter, with uh, you know a pet hat’s the size of a Shetland pony, uh, give us a call, maybe we should just help you buy a house.
Duke: There you go!
Adrienne: With a yard, with a yard!
Duke: With a big yard, yeah.
Adrienne: Not like a little, a big yard!
Attilio: And if you want to use your own dishwasher as a chew toy, that’s okay! It’s your place.
Adrienne: It’s what you do. Okay, so, so Duke, you guys are, are growing, there’s, you’re always bringing on new owners and uh, so tell us about like, you guys are always looking for, for talent, for new team members to help service these clients.
Duke: We do, and a lot of times agents have to be licensed to, before they can get into the property management side. All of our PMs are licensed, uh, I have a real estate license in the state of Hawaii and, and they’re very happy because we give them the business, you don’t have to go looking for too much business when you work for us. The phones are ringing off the hook, uh, and we have a rare situation where we get to pick and choose the relationships that we want to take on with new owners, so we’re lucky, we’re so lucky.
Adrienne: Well, you know, I think, I think a big part of it too is like all of the wonderful reviews that you guys have online, so people are always like searching and researching and they see, wow, look at all these 5-star reviews, they’re very happy, happy clients, uh, now there is, there’s a couple 1-star reviews, but that’s okay.
Attilio: Well, you know, I want—
Adrienne: Let’s talk to that.
Attilio: Well, I’ll speak to that. Here’s the thing with reviews, and, and, when you, as a consumer, when you go look at the reviews, here’s the two things you want to avoid. Reviews that are 100% all good, something’s you know, something stinks in Denmark there because that’s not, that’s not real life. Nobody, Abraham Lincoln said it best. We can only keep some of the people uh, happy but we’re never going to keep every single person or every relationship in our life happy because you know, some people are just, they’re, they came out of the womb grouchy, they’re going to be that way when they go in the casket. And the other side of that is where all the reviews are like bad.
Adrienne: Yeah, but—
Attilio: What you want to be is right in the middle. Mostly good reviews, with a few nut jobs in between. No, I’m just kidding!
Adrienne: What I wanted to point out is the ones that were like, not rating them well are tenants that are disgruntled that, that they’re doing, you know, like they’re protecting the home, they’re protecting the owner and so it’s not that al, all, all 1-star reviews are bad, you know.
Duke: The two that we have are from tenants.
Attilio: You know, I think a lot of it too is the tenants that didn’t take the, a lot of times when I see these reviews, is I will guess, I would bet $1 million that they didn’t take the opportunity to have a discussion with—
Adrienne: Have a conversation.
Attilio: The business owner. But they went from 0 to we’re just going to blow you up on Yelp.
Duke: Yeah, a lot of times the property condition form is such an integral part of our, our move in and move out process so, you know, when the people don’t do a good job with the, the property condition form on move in, we tell them, hey, on the 10-day walkthrough, we need to have you fill this out and have you sign it. Some people are like ah, you know, it’s all good. And I’m, you’re like, no, it’s not, so, you know, then the PMs go through with them and fill it out for them.
Attilio: Yeah, I think it’s important, more detail preserves relationships.
Duke: Yes, absolutely.
Attilio: You get into the he-said, she-said is when it gets all ballistic.
Adrienne: So, like—
Duke: We’ve been there.
Adrienne: So, but like with all of your guys’ happy clients, I think that they’re telling others right and then you have great reviews, so, I think that, that is why the phones are continuing to ring.
Duke: We are very, very lucky, yes.
Adrienne: People want to do business with you.
Duke: Yes, I’m very honored, I’m humbled by that.
Attilio: So, it’s always about, we always, describing the idea of property owner, but it, you know, a couple tips on the, the non-deal property owner. If you’re a property owner out there that does not want to upgrade your property or maintain it in a safe manner.
Adrienne: Be like a slumlord.
Attilio: Uh, you’re looking for a—
Adrienne: (laughing) No slumlords.
Attilio: You’re looking for a discount on the property magnet fees because we strongly believe you get what you pay for! And uh, you know, I, and, and speaking to the other people that are for-rent by owners, you’d be surprised, you probably are below market on your rent. And for the additional, more rent that, that Hawaii Pacific could get you, it would take care of their fees and I don’t know about you—
Adrienne: Take the hassle off your chest.
Duke: Take the hassle.
Attilio: I don’t want, I don’t want on Super Bowl Sunday, the phone call from the tenant for the kid who flushed his teddy bear down the toilet. I don’t want that call.
Adrienne: Now, I want to ask you about the fees. That’s kind of something that differentiates you guys a little bit. Talk to that, about—
Duke: We’re no money up front, we are only 10%, there’s no other fees that you will pay for with Hawaii Pacific, so it’s a one-time, only when we collect the rent, that’s the only time we get paid. So, if we collect a half moth, we only get a half fee, uh, but that’s straight across the board.
Adrienne: It’s that simple.
Duke: That simple.
Adrienne: No, no hidden fees or extra fees, it’s just, it’s 10%.
Duke: 10%. That’s it.
Attilio: Yeah, David Kiyosaki wrote the book Rich Dad, Poor Dad. I remember reading the book and he talks about it, real estate is the, 90% 90-95% of the wealth built in this country was through real estate. And one of the pieces of advice he gave in there was to not manage your own stuff. Have a professional take care of it, it’s like you know, investing in something you know nothing about, would you, that is not, that is not a do-it-yourself kind of situation, especially with all the liability. In Hawaii, Duke, the laws, who do they favor?
Duke: Tenant! It’s a tenant-friendly state, but you know, we don’t have a grace period here in Hawaii when we write our leases. Your rent is due on the first. In California, Las Vegas, some of the other places, you get 5 days’ grace period.
Adrienne: So, here, you guys enforce that. There is no grace period. So, what, what happens on the second?
Duke: Second day, you get a notice pinned to your door. If we don’t get in touch with you, and it states that uh, you have 5 days to come forth with the rent and then that’s your 5-day notice. After that, we go and file for a court date with the uh, the civil court, and we get a court date that the judge will ask you, hey Ms. Smith, do you owe this rent and a lot of times they go, yeah, but I have an excuse. And, that usually doesn’t hold up very well.
Adrienne: And then, so usually they’re out within—
Duke: 48 hours.
Adrienne: Wow, so like within 2 weeks, you can—
Duke: Two weeks after we get the court date and the judge will say when do you want them out, Duke, and I’ll say 48 hours. He’ll say Ms. Smith, can you be out tin 48 hours, they say no, they say well, then you’ve got 48 hours. And we show up with a locksmith and a sheriff and it’s done.
Attilio: Now I know you guys used to use Nick, you guys don’t use Nick anymore, right? Hey, if I’ve got to come back here to get this rent, you won’t be showing back—no, no, no, you don’t use Nick anymore. You follow the law, go through the process. Tony! You don’t want me to come back here to get this rent, now do you? Anyway.
Adrienne: So, so, Duke, we’re coming here to the end of the show, is there anything more that you’d like to share with our listeners?
Duke: No, but you know, through the process of property management, you’re going to build wealth in your home. Uh, we’ve had several stories of people that are just absolutely shocked that their home value has outpaced their retirement. So, that’s a common story uh, with the property management side, my job is to build wealth for you and to protect your wealth. That’s it.
Adrienne: That’s it, that simple. And you do an excellent job at that.
Duke: Thank you so much!
Adrienne: You had a happy, happy customer right here.
Duke: Very, very happy with your trust.
Attilio: Alright, well thanks Duke for being on the show uh, what’s a, what’s a good number for our listeners to get ahold of your group, your team?
Duke: 808-445-9223. It’ll ring to all of our phones, somebody will answer.
Adrienne: And then check them out online at www.hipacificpm.com.
Attilio: Alright, so, we’ve got uh—
Adrienne: We’ve got Brooks on the line.
Attilio: Oh, Brooks!
Adrienne: To talk about, I don’t know, what, what’ve you got for us today, Brooks?
Attilio: What’ve you got for us?
Brooks: Well everybody likes to live in Kapolei, or get a foothold in Kapolei, this is an entry point unit to the coming soon, uh, it, it, well it’s like a little bit over 500 square feet, it’s an investors’ special, the, this is a great ___ product for what you guys are talking about. A get in to Kapolei for you know, under $300,000. It’s pretty amazing. And uh, you know, great for a single person or maybe a young couple starting out, or an older couple downsizing. So, this is coming soon, it’s going to be live in August, and uh, that’s just a month away and we’re looking forward to bringing this on the market for you guys.
Attilio: Alright, thanks, Brooks.
Brooks: Thanks, you guys!
Attilio: Alright, next up we’ve got Ross! Hey, Ross, what’ve you got for us?
Ross: Hey, this Sunday I’ll be sitting a grand open house over at 91-1022 ___ Street. Over in Eva Beach. That’s 91-1022 ___ Street, over in Eva Beach. This is a huge single-family home with a lot of square footage. And it’s in the desirable Eva by Gentry Prescott located on a quiet cul-de-sac. There’s also a full bedroom and bath on the first floor and mature fruit trees as well so I look forward to seeing you all this Sunday, 2-5 p.m. for the uh, amazing huge home!
Attilio: Alright, thanks, Ross!
Adrienne: Thanks, Ross!
Duke: Ross that’ll rent for about $3200!
Attilio: There you go!
Adrienne: There you go, rent analysis right there!
Attilio: Thank you, Ross.
Ross: Thank you.
Attilio: Alright, so uh, a couple of events that are always repeating and coming up, we always have our Career Nights on the uh, every other month on the first Monday of the month. 5-6.
Adrienne: You can just go to www.teamlally.com, check under the events and you’ll, just, you’ll see Career Night right there.
Duke: July 3rd, July 3rd.
Attilio: Yup, July 3rd is the next one and then we’re also always having uh, always looking for superstars. Uh, we can always—
Adrienne: As, as is Duke!
Attilio: As is Duke, so—
Duke: I’ll be there! I’m looking for a superstar! Right now!
Attilio: So, we’ll be—
Adrienne: We need superstars!
Attilio: We’ll be doing uh, swimsuit and voice auditions.
Attilio: No, no, no, we don’t do any of that stuff.
Adrienne: So, oh, but if any of our listeners want to uh, get ahold of any of our buyer agents, for the coming soon properties, you can reach them at the 234-4421, and find out about open houses, coming soon properties, check it out.
Attilio: Alright, in the words of one of my clients, you speak-y funny huh?
Adrienne: Well thank you for listening—
Attilio: It’s the end of the show.
Adrienne: Yes, thank you for listening and thank you to our sponsors!
Attilio: Jodie Tanga and Derek Tanga of Pacific Rim Mortgage!
Adrienne: Bradley Maruyama of Allstate Insurance!
Attilio: Nathan Baker of Pillar to Post Home Inspections!
Adrienne: Ben and Tony Mamood of AAA Roofers Hawaii!
Attilio: Janyce Myrland with Dream House Drafting!
Adrienne: John Speed of Kilauea Pest Control!
Attilio: Duke Kimhan! Yay, he’s in the house! Hawaii Pacific Property Management!
Adrienne: Mike Metts of Kama’aina Plumbing!
Attilio: Thomas Pattison with Pattison Land Surveying!
Adrienne: Myron Kamihara of Kamihara Law!
Attilio: If you want to get ahold of any of our sponsors, just go to www.teamlally.com.
Adrienne: We want to give a big thank you to Lea, our producer here in the studio!
Attilio: And Duke, our guest! Chi-hoo!
Adrienne: Make sure to tune in next week, we’ll have an awesome guest talking about something that’ll change your life—
Attilio: Forever. This is the Team Lally real estate show, home of the guaranteed—
Adrienne and Attilio: SOLD PROGRAM!
Adrienne: If we can’t sell your home at the agreed-upon price and your time frame, we’ll have it bought for cash!
Adrienne and Attilio: THANKS, AND ALOHA!