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 premiere 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 you can reach us at 799-9596 or check us out on the web at teamlally.com.
Attilio: Well hey everybody this is Attilio. I was focusing on something, this lady came up to me, tapped me on the shoulder, started asking me a bunch of tax and legal questions and then I said, “Those are great questions. Highly recommend you seek the appropriate licensed professional.” And then I said, “But mom, what other questions do you have?” So if you hear anything on the show, sounds like legal advice, hey go run that past an attorney. If it sounds like tax advice go see a CPA. But I want to talk about focus.
Attilio: Tony Robinson says there are three things that people who are not happy focus on, and if you want to be happy you focus on the opposite.
Attilio: Adrienne what’s one of them?
Adrienne: Focusing on things that you cannot control.
Attilio: Yeah extremely depressed people constantly focus on things that are not within their control. So focus on - and you know what, and here’s the bottom line. There’s really only one thing that you’re in control of. What is it?
Adrienne: You. Yourself.
Attilio: Yep. You, yourself. So if you have tourette’s syndrome -
Attilio: Be a positive tourette’s syndrome.
Attilio: Go up to people and be like you look good! That’s a nice haircut! Focusing on things that are not within our control. The second thing is focusing on things that are missing in our life.
Attilio: And the opposite of that is being grateful for the things that you do have in your life and he goes on to say 70% of the world’s population lives on $2 a day. So-
Attilio: If you live in the United States, even if you’re living on the beach collecting welfare, that is a fairy tale compared to the 70% of the world’s population that doesn’t even have clean water.
Adrienne: They say that maybe your nightmare of a day-
Adrienne and Attilio: Is their fairy tale.
Adrienne: So think about that.
Attilio: The last thing is focusing on the past. There’s nothing we can do about it, it’s done.
Adrienne: It’s happened. Yep.
Attilio: So focus on the present. That’s a great way, and you know what, the people around you would appreciate that. Be present.
Adrienne: Be present.
Attilio: And if you’re goal oriented you’re going to switch between focusing on the future and focusing on the present. So that’s Tony Robbins’s key to happiness.
Adrienne: Okay and I have some quotes from author unknown.
Attilio: Unknown. No it’s Anon.
Attilio: He’s a very popular writer of quotes this anon guy.
Adrienne: And it’s awesome because Duke from Hawaii Pacific Property Management sends us these quotes everyday.
Attilio: Uh-huh, yep.
Adrienne: Y’know it’s a good way to start our day.
Adrienne: So these are the ones for today. “There are no mistakes in life, just lessons.”
Adrienne: “The starting point of all achievement is desire.”
Adrienne: And then the last one is, “Good ideas have a very short shelf life.”
Attilio: Awesome. Alright we’re going to talk to Bradley?
Adrienne: We are. So who is Bradley?
Attilio: Who is Bradley?
Adrienne: Bradley from Allstate Insurance-
Attilio: Oh wow!
Adrienne: - is on the line to talk with us about his insurance tip of the week.
Attilio: Alright Bradley you there?
Adrienne: This is Bradley Mariama.
Bradley: I am here.
Attilio: Hi. Welcome to the show. What kind of insurance tip of the week can you give us?
Bradley: Okay. Insurance tip of the week we’ve had bad weather. A lot of strong winds.
Bradley: If you do see shingles on the ground or you think that your roof or your … has some damage call to … your roof and your fence right away.
Bradley: Be proactive.
Adrienne: Wait a second, wait a second. Call someone? We have someone that they can call! AAA Roofers!
Bradley: AAA Roofing.
Bradley: You know you want to call them to make sure that the damage will be above the deductible. A lot of times will call in -
Bradley: - and find out to repair their roof it would have been $500 but not we have a claim on our system that could compromise their rate.
Bradley: Before you put in any claims of course let the insurance agent know but get an estimate to see whether the damage will be above or below the deductible before you even instigate a claim.
Adrienne: I think that’s good advice all around. Right? Even like if you’re in a car accident.
Adrienne: You know you don’t want to put in a claim if the damage is fixed for less than what your deductible is.
Bradley: Yeah actually so I’ve been taken about ten calls this past weekend.
Bradley: And of the ten, two of them were below the deductible but I simply tell the client, you know, here’s a couple of roofers I would call to get an estimate.
Bradley: They’ll take pictures, they’ll have the report, they’ll have an estimate so the process from there is very - it can be expedited if all this has already been done. So-
Bradley: Get an estimate and it’ll better - give you a better experience during the claims process when you do file a home or wind claim.
Attilio: Alright. Talk about missing shingles. What if you see a reindeer and Santa Claus?
Bradley: Then we have an issue.
Adrienne: Different problem.
Bradley: That’ll be an escalated liability claim so-
Attilio: I think if you’re older than eight years old and you’re seeing reindeer and Santa Claus on the roof you need to - we need to get you some therapy.
Attilio: But if you’re under the age of eight, you know what? You’re just excited!
Bradley: You know since I did miss last week’s call I’ll give a second tip.
Attilio: Sure go ahead.
Bradley: PV Panels are very prominent now here on the island.
Bradley: Please make sure you contact your insurance agent to add it to your hurricane and homeowners policy because if the wind does blow those PV panels down, and it’s not added in, it could become a problem. So the solar companies are not making it mandatory for you to add them on but it is your responsibility to let your insurance know that you’ve added it on because we don’t have crystal balls. We’re not going to know if you added it on if you don’t let us know about it.
Adrienne: Alright well thank you so much Bradley for those insurance tips of the week and you have a wonderful rest of your week.
Attilio: Thanks Bradley! Alright you can reach Bradley at what number Adrienne?
Attilio: Give it to them one more time. The pencil broke.
Adrienne: It’s 591-8016 and then also we want to give out the number for AAA Roofers Hawaii.
Attilio: Hold on what if I want to go on the internet to check out Bradley then?
Adrienne: Okay yeah you can go to check them out at allstate.com and that’s Bradley Mariama.
Attilio: Now here’s the important part. We’ve gotta do like a little takeaway and give it to them, the information for the roofer. Here’s the reason why you want to have a good roofer: This roofer, this information that we’re going to share with you, the contact information for this roofer - they’ve been on the show, and this is what they talk about. People run on the roof, go put the tarp with the bricks and stuff like that, but don’t do the repair, because you’re going to void your opportunity to have the insurance claim go through.
Attilio: And what Ben and Tony and them always mention to us is that they’re really good at working with the insurance companies. They’ll even help you with the paperwork!
Adrienne: Yeah they take care of it all.
Attilio: What’s the number?
Adrienne: So they make it really easy.
Adrienne: And they do free estimates too
Adrienne: So that’s Tony and Ben Mamuad, and that’s aaaroofershawaii.com. You can reach them at 531-2211.
Attilio: Give them a call. If you’re an insurance company out there and you’re looking for a great roofer to work with, they’re locally owned, and they’ve been doing business for a long time. Alright. That’s AAA Roofers.
Adrienne: Yes, so, um, do we have a property management tip of the week?
Adrienne: From Duke Kimhan.
Attilio: Hi Duke are you there?
Duke: I am! Good afternoon!
Attilio: Good afternoon. Alright whatcha got for us?
Duke: Team Lally Radio Show.
Adrienne: Yes. Welcome to the show. We’re excited to have you here.
Adrienne: Alright so what’s your tip?
Duke: Tip of the week is use a property management company that is geared toward property management and not buy/sell real estate.
Duke: So we have systems in place to take care of our owners and put money in their account.
Duke: You know we only do property management and it’s a huge time drain to have listings and showings and deals in escrow and things like that.
Duke: Where your agent may not be totally focused on protecting your home and putting money in your account like our company is.
Adrienne: There’s that word again: focus.
Attilio: Yep, focus.
Adrienne: Duke we were talking earlier in the show about focus and I think that’s really important that you’ve gotta have that focus on property management.
Adrienne: Because it can be a disaster!
Duke: That’s our speciality, yep.
Duke: That’s what we do.
Attilio: And you know we always believe it, and we know this, that a higher level of service will always be provided by a team of specialists than by a generalist.
Adrienne: That’s right.
Duke: That’s right.
Adrienne: And you’ve got an awesome team of specialists there.
Duke: We do! We have a … department, and we have all kinds of people that totally focused. We all answer the phone.
Duke: You will never get a busy signal with our company and that is something that a lot of people come to us for.
Duke: And we always answer our phone, or you get a call back within two or three hours, and that is my promise.
Adrienne: That sounds like a communication guarantee.
Duke: Communication guarantee. We do a rent guarantee. We do an eviction guarantee. It’s all on paper in writing.
Attilio: Alright so tell us about your rent guarantee.
Duke: The rent guarantee says that if we don’t rent your home in 30 days or less we pay that amount of rent.
Attilio: Okay. Super awesome.
Adrienne: You guys are good.
Duke: In writing.
Adrienne: In writing.
Attilio: Alright. Thanks Duke.
Duke: And the eviction guarantee states that if we put a tenant in your unit and we have to go to evict them, that we pay the court costs and legal fees.
Attilio: And take over all the hassles, because that doesn’t sound like something that somebody - that doesn’t fun!
Attilio: You know I was up there like “Go to the beach and surfing!” and then “Evict a tenant.”
Attilio: Two things that are super fun.
Adrienne: That’s no fun!
Attilio: No only one of those things are fun and that would be the beach part.
Adrienne: Alright so you want to give Duke Kimhan and Hawaii Pacific Property Management a call at 445-9223 or you can find them on the web at hipacificpm.com.
Attilio: Give them a call.
Adrienne: Alright so we’re going to-
Attilio: Go to the beach, go surfing, give them a call, let them take care of your tenants.
Adrienne: Yeah. So we’re going to take a short break but when we come back we have a very special guest joining us.
Announcer: The Team Lally Real Estate Show continues.
Adrienne: Welcome back and thanks for the 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 teamally.com.
Attilio: Hey! We’ve got a guest in the studio.
Adrienne: We do!
Attilio: Alright let’s read the introduction. I’ll do the first part, you do the rest?
Adrienne: Okay, alright.
Attilio: So our guest today offers a unique mixture of successful startup and management experience, personal real estate and investment experience, and nearly 25 years of local and national banking experience covering the areas of equipment leasing, commercial, corporate banking, and for the last 15 years building a thriving private banking practice at Hawaii’s largest bank.
Adrienne: Alright so he’s a graduate of Iolani School and obtained his bachelor’s of business administration degree with a concentration in finance from the University of Washington in Seattle. He is the vice president and senior banking manager for the real estate industries group of Bank of Hawaii’s private banking division. Let’s welcome today’s guest, Ronald Chang.
Ronald: Thank you Adrienne. Thank you Attilio.
Adrienne: Thank you so much for joining us this afternoon.
Ronald: Oh my pleasure.
Attilio: Yeah you know one of the things we kind of - when we bring guests onto the show, we always like to have a little local flavor on it in that, you know, local style we want to get to know the person a little bit before we get into the business.
Attilio: So tell us about your background. You know, the school you went to again.
Adrienne: That’s Iolani.
Attilio: Because that’s like the big - that’s the important question.
Ronald and Adrienne laugh.
Attilio: You could be valedictorian for Harvard, we don’t care. What highschool did you go to?
Ronald: Well I’ve actually, I’m born and raised in Hawaii and I got into Iolani when it was easier to get into I think, than nowadays.
Attilio: Oh wow.
Ronald: But it was a fun experience. I went to University of Washington, Seattle. So that was a great community. It’s grown up so much since I’ve gone there, which was more than a few years ago, and then I came back to Hawaii. I was in banking for a few years after graduating and then I got recruited by Bank of Hawaii to come back.
Attilio: Oh wow.
Ronald: I’ve kind of been in banking my whole life.
Ronald: But I’ve always had an interest in real estate. I grew up, you know, in a two story walkable apartment. We were renters, but I saw my cousins get into homes, and then I was wondering why we couldn’t get into a home.
Ronald: I think that kind of set the stage for me to have this interest in real estate as well as an interest in investments, and that’s kind of done well in Hawaii. I think we’re fortunate and blessed to have a Hawaii market that is strong, we don’t have a lot of oversupply that some of the mainland markets have.
Ronald: And we’ve got, you know, a good resident population where there’s always demand for rentals as well as purchases.
Adrienne: Yes so we saw Ron speak at, it was like the Bank of Hawaii, there was a big room. What’s the name of that room?
Ronald: Our Surf Rider room.
Attilio and Adrienne: The Surf Rider room!
Adrienne: So they were kind of enough to invite Keller Williams Honolulu, I guess the top 20% out for a presentation.
Ronald: That was wonderful. You guys have a very great, great company, great agents.
Attilio: And free food.
Attilio: We show up for free food.
Attilio: I only eat two kinds of lunch. Vegetarian and free.
Adrienne: Well I’ve also seen you eat very expensive meat.
Attilio: Yeah. Sometimes.
Adrienne and Ronald laugh.
Attilio: Well speaking of lunch, let’s talk more about the real estate market and get you, you know let’s kind of talk about the presentation that you gave because I felt that it was a lot of helpful information even for the lay people that are not necessarily in the industry. You know let’s kind of talk about the presentation that you gave because I felt that it was a lot of helpful information for the lay people that are not necessarily in the industry.
Attilio: And uh - go ahead.
Ronald: Okay well what we’re seeing now is there’s still a lot of strong demand in the price ranges under a million.
Attilio and Adrienne: Mhm.
Ronald: We saw, you know, a new construction building on Keikilani Boulevard go up and sell out, you know, within a weekend on the market pricing, and then the reserved housing went the following weekend.
Ronald: So I think the activity is there, you know and interest rates are coming up a little but people are still looking for housing. There is still a lot of vocal residents looking into getting their own places. I think a lot of people are looking to move into towns.
Ronald: There’s a lot of construction in the Kakaako area. A lot of, you know, building by Howard Hughes, by .. Kobayashi Group, as well as other developers like Stanford Carr.
Ronald: Trying to deliver product at price ranges that appeal to the local market, the higher end we’re seeing I guess a slow down in the over $3,000,000 range.
Ronald: Especially for single family homes, you know, in the neighborhoods that have traditionally been very strong but probably a little more cyclical at the top end of the cycle, but Hawaii I think has always rebounded so even when things slow down we don’t go through a big correction. Prices kind of do a stairstep, so they go up, they kind of plateau for a while, work through the cycle, and then they start appreciating again. I think we’ve had a lot of overseas buyers driving demand.
Ronald: But all of the new condo inventory that’s coming up, we’re seeing a lot of options. Not just buying Kahala or Hawaii Loa Ridge or East Honolulu, but also you know, getting luxury $3,000,000 condos in the Kakaako area where they have security, they’ve got services, concierge services, and just a great location. So there’s a lot of choices out there for the buyers and all of the different price ranges, and I think if you’re looking and you’ve got cash, you know it’s not a bad time to buy. It just depends on what your objectives are. Especially if you’re looking for housing where I think everyone should own a house at some point, you know, because rents in Hawaii are a lot cheaper than owning but rents will always go up.
Adrienne: Or the landlord might want to sell, or they might not want to fix things, or-
Adrienne: I mean all sorts of things can happen that are unexpected as a tenant.
Ronald: Correct. Yes, absolutely Adrienne. We’ve seen that in many cases where people love the place they rent but then the landlord needs to sell, or the landlord’s children are coming home and they need a place for kids.
Ronald: So you know when you own you have more control over your destiny and sometimes you just have to adjust to what you’re willing to purchase as your first home. You may be able to rent a million dollar condo but only buy a $600,000 condo.
Adrienne: But it’s yours!
Ronald: But in the long run it’s yours! Exactly!
Adrienne: You’re building-
Attilio: You can put holes in the wall!
Ronald: You’re building wells!
Attilio: Hang up all your pictures!
Ronald: That’s right, yeah, exactly.
Attilio: So the other thing, you know, you’re - thank you so much for giving that report. You know we can take a look at - We’re going to be talking about this event coming up for the forecast for CCIM but people want to know, they want that crystal ball, and so we can provide - for economists you always have - there’s an art and a science to making forecasts and the science part of it is providing the quantitative data as far as median home prices, inventory, interest rates, and all of that, but a lot of the articles and a lot of the research that we’ve been doing on what affects the change in the buyer psychology towards whether they’re going to continue to pursue buying a home or just staying put is psychological, or what we call the qualitative aspects of the industry so one of the things we did learn and you can speak to it from Bank of Hawaii, was that here’s a concern: We’re going to go through this big bubble again, and it’s going to correct, and values are going to drop. What we noticed from, I don’t know we did 400+ short sales-
Attilio: Majority of the properties that were being closed on were from mainland lenders, and so why is that important for Bank of Hawaii to have not gotten all caught in that? I mean it was a good thing for Bank of Hawaii, but more importantly for the hawaii and the individual consumer.
Ronald: Sure, thanks Attilio.
Ronald: You know I think what we see in the different real estate cycles is that the mainland lenders they tend to come in when the market’s really strong, and they’re looking at growing their portfolio, but they don’t necessarily have the local expertise to know what are the more stable properties? We’ve seen a lot of foreclosures like you mentioned in the condotel space-
Ronald: - in Waikiki where they’re getting involved that are more speculative, and when the market goes down those projects tend to go down quicker and deeper than, you know, more stable neighborhoods and more stable inventories such as single family homes, or condos in, you know, very established neighborhoods like Kakaako or Waikiki where there’s high demand.
Ronald: And we’re also in tune with the local market to know if something’s price will be high and is more vulnerable.
Ronald: So you know we’ve seen a lot of investors in the … hotel condo buy from the original developer, Crescent Heights, and they kept escalating the prices with each successive round of offerings of units that they were releasing.
Ronald: And when you have 1,100 units sold, and then now those 1,100 owners want to resell, there’s a huge inventory that’s coming on the market when the market slows down people need to sell. They tend to reduce their prices, and that kind of is a snowballing effect.
Ronald: So you just have to be careful in what you’re getting involved with. We look at the - at Bank of Hawaii we look at the individuals that are buying, we look at their cash flow, we look at their financial capacity to repay. So all of those factors come into play. We want to support our customers.
Ronald: In private banking we tend to do it with wealthier customers, but they also have varied needs so not just housing, but you know investment housing, and sometimes that can be a little trickier when you’re buying not just to live in but to make money whether you’re flipping or renovating or you know, long term hold rentals.
Ronald: So we try to look at the goals, what their objectives are, and see if it makes sense for them and see how we can help them. I think everyone, you know, needs to probably try to position yourselves financially having adequate cash reserves and liquidity first of all, looking at your finances for retirement because nowadays companies don’t give you pensions. They don’t give you, you know, a lifetime income when you retire. Social security, people are questioning whether that’s going to be around in 20-30 years so I think we have to self fund our retirement somehow.
Ronald: Either through 401ks or IRAs.
Ronald: But making sure you fund it somehow because if - Attilio you look really young, Adrienne looks younger than us.
Adrienne and Ronald laugh.
Attilio: She is.
Adrienne and Ronald laugh.
Ronald: But let’s say you and I are the same age, and I started - let’s say you started putting money into a retirement account. You put $500 a month in that retirement account, and you did that for 10 years.
Ronald: But in the meantime I thought “You know I’m too young, I don’t need to worry about retirement. I’ll do it later.”
Attilio: “I’ll wait.” Yeah.
Ronald: Yeah I’ll wait, and then in 10 years I start putting in. At that point you stop because you feel like “I’ve got these other things. I want to buy real estate, I want to do other things.” So you stop contributing to your retirement. I start doing the $500 a month that you did, but I do it for the next 20 years. So doing it twice as long as you. In 30 years after I’ve done my twenty years, and you’ve done nothing more than your 10 years.
Attilio: The 10, yeah.
Ronald: If our accounts go at the same rate of interest, you will have more money than I will in 30 years because you started earlier.
Attilio: That’s the key. Start early.
Ronald: That’s the key, exactly.
Adrienne: That sounds like the compound effect.
Attilio: The compound effect.
Ronald: Right, exactly, Adrienne.
Adrienne: Yes. Yes.
Ronald: It’s the magic of compound interest.
Ronald: You know what, Einstein’s greatest discovery - according to Einstein - was compound interest.
Ronald: Well he called it the 8th wonder of the world, compound interest.
Adrienne and Ronald laugh.
Attilio: Yeah, so start early.
Adrienne: So start early.
Ronald: Start early.
Adrienne: That’s a great tip.
Ronald: And then the last thing is shelter. So, you know, having liquidity, having a retirement plan, and then having shelter. So, you know, everyone needs a house, right? But sometimes just getting something to get your foot in the market, to build equity, I think is good. Just don’t overdo it. Don’t stretch yourself too far, and then as the market appreciates you can always trade up. But I think, you know, some people are thinking “Well I’ll wait ‘til the market goes down.” But you know, the Hawaii market doesn’t always go down, and it doesn’t go down for very long when it does.
Attilio: No and what happens if the interest rates will go up so your purchasing power reduces, and-
Adrienne: You’ll be paying the same amount anyways every month. The interest rates go up and the prices go down.
Attilio: We went to a broker forum and the panel that was up there was sharing information with us brokers. Probably represented 90% of the builders that were there, Average Entry, Castle and Cooke, Kobayashi, Stanford Carr, they were all there and every single one of them agreed, and I think their overall estimate was that on average we’re about 50,000 units behind demand.
Attilio: And it’s just because we have limited land space.
Attilio: One of the developers, he even said “When we decide to develop an area, from the time we make a decision on a particular area, and when we build the first home, is ten years, minimal.” 10 years, so…
Ronald: It’s a long lead time.
Attilio: Yeah a long lead time. You know I want to get back to what you said about the criterias for lending and this is what people need to understand. It’s good that you have banks like Bank of Hawaii that take their approach towards lending because in the long run it stabilizes the economy. You know we become distressed foreclosure geeks because we studied a lot and what we realized is that all of that “less than conservative lending” that really liberal lending, pretty much imploded the whole global economy. So for that to occur obviously there’s been a lot of different things, legislation, and regulation has been put in place.
Adrienne: And I think of the 400 we’ve done, maybe one was with Bank of Hawaii.
Adrienne: So it was very small numbers.
Attilio: Very small percentage that were with the local banks or credit unions. Majority, 98% of them were Wells Fargo, Bank of America, and Citibank. Going back to the Alamana Hotel. How many short sales did we do in that one? Probably 22?
Adrienne: Yes, in one year we did just a huge amount of short sales.
Attilio: Short sales, and we knew the price points. We saw on the tax records what they had paid for the unit. Some people had paid $280,000 for the unit-
Adrienne: Were selling it for half price.
Attilio: And we were short selling them at $130,000.
Adrienne: Yeah. 50% off.
Attilio: Yeah, but for that to occur in the overall market, first of all the overall market is not made up of condotels.
Attilio: Which can be, you know-
Adrienne: It’s askewed.
Attilio: Well it’s susceptible to tourism, and stuff like that.
Attilio: Unlike the single family homes and all of that. So we always say that the best time to plant the tree is 20 years ago-
Attilio: Or now.
Attilio: And today.
Attilio: And today. So don’t wait. And this is what we tell buyers: “the longer you wait,” what’s going to happen with their ability to buy and/or the cost? Is it going to go up or down?
Adrienne: It’s just going to go up.
Attilio: It’s just going to go up.
Ronald: Exactly and I think that’s what we’ve seen in the condo market too where prices have continued to go up but part of the escalation in prices is construction costs and building costs.
Ronald: As labor goes up, as costs of materials go up, you know we’ve seen mobile in China and other countries-
Ronald: You know, absorbing the materials, right? So things like steel and concrete. Those material costs are going up so we can’t build them for what we built them 10 years ago, and so just riding that boom would give you appreciation as well.
Attilio: Yeah, and if you think about it when you’re a homeowner you have all kinds of benefits. You have the mortgage interest - Well here’s the deal I’m going to back it up a little bit. You’re always making a mortgage payment. Why is that Adrienne?
Adrienne: ‘Cause either you’re going to make your mortgage or your landlord’s mortgage payment.
Ronald: That’s right.
Attilio: So everybody’s making a mortgage payment, unless you live on the beach. Then you’re not making any kind of mortgage payment, but you know just like anything that’s not fun after a while.
Attilio: And so it’s always good to be a renter/homeowner because you have the mortgage interest reduction, as you’re paying down the mortgage you’re-
Adrienne: You’re building wealth.
Attilio: You’re building wealth, and then the value is continuing to grow.
Adrienne: That’s right.
Attilio: So anyway do you want to take a quick break and then we’ll come back with some more questions.
Adrienne: Yes let’s take a short break but stay with us we have more questions for Ron.
Attilio: For Ronald, Ronald Chang of-
Adrienne: Of bank of Hawaii.
Adrienne: Stay with us.
Announcer: It’s the Team Lally Real Estate Show. Here’s Adrienne and Attilio.
Adrienne: Welcome back and thanks for listening to the Leam 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 you can give us a call at 799-9596 or check us out on the web on teamlally.com.
Attilio: Well hey everybody we have a special guest in the studio if you’re just tuning in. We have Ronald Chang. He’s the - let’s see, Bank of Hawaii’s private banking - part of private - Bank of Hawaii’s private banking division, president and se-
Ronald and Adrienne: Vice president!
Adrienne: And senior private banking manager.
Ronald and Adrienne laugh.
Attilio: I’m just going to give you this awesome, huge-
Ronald: Don’t put me in Peter’s place yet!
Attilio: I’m just going to give you a promotion, right here on the air.
Ronald: Oh thank you!
Ronald: I’ll let my boss know.
Adrienne: So while we were on the break on we were chatting with Ron about a new group that’s been recently formed for the real estate industry at Bank of Hawaii.
Attilio: Tell us more about that.
Ronald: Sure, thank you. So Bank of Hawaii recognized the importance of real estate in the community, especially within the State of Hawaii.
Ronald: And so we’ve - They’ve asked me to set up this group to help work with our clients that have real estate needs. Financing needs, investment needs, you know, buying homes for their children, developers, people who are just investors who have this interest, and we help them with 1031 exchanges, we help them with financing property, and we help them with estate planning, trust services.
Ronald: As they’re looking at passing on wealth to the next generation. So that’s the whole mission of private banking but our group really has a real estate focus because it’s so important to people in Hawaii and so important to the economy.
Adrienne: Well that sounds like a great group for you to be a part of given your history and your passion about real estate, just y’know, from a young age.
Ronald: I know, I love it. It’s been great to people who have been able to invest in - and I think that timing is everything whether you’re in the market, stock market, or the real estate market. You need good timing, and you need to understand the market to know where to buy, and when to buy, and when to sell, like anything else.
Attilio: And we saw you before you came on the show. You were being an excellent Iolani student, you were doing some-
Adrienne: Some numbers!
Attilio: Doing your homework, crunching some numbers.
Attilio: You want to talk to our listeners a little bit about interest rates and how that works.
Ronald: Sure, sure. So we’ve been seeing interest rates come up, especially since Trump got into office and it’s renewed confidence in the economy and where things are going, and people are moving from fixed income into other investment classes, and we’ve seen when you flow into the stock market. I mean that’s driven interest rates up as people have sold bonds. The tenure treasury which bought them like in 1.3-6 range roughly. Grovia this year is now in the 2.3 to 2.4 range kind of bouncing between that level. Mortgage interest rates have gone up probably 75 aces points from the lows. So I think on the 30 year fix you’re looking now probably around 4%. You know you can get rates depending on how many points you want to pay of, maybe 3 and ¾, 3 and ⅞, up to 4, 4 and ⅛. Anywhere around there. I think you know if you look at a million dollar mortgage, which in Hawaii y’know, isn’t that high.
Adrienne and Ronald laugh.
Ronald: The monthly payments will be about about $4,000-$4,775 a month at 4%.
Ronald: And your income to qualify just for that principal interest payment would be about $110,369.
Ronald: It would be more when you factor in property taxes, insurance, if you have any other student loans, or credit card debt.
Attilio: Any other debt.
Ronald: Car loans, yeah.
Ronald: But just for that principal interest payment. If interest rates rose 1% of 5%, your payment would go up to $5,000-$5,370 from $4,775, and your income to qualify would jump to $112,700 and change. $112,785, but if interest rates were to go up another percent, to six percent.
Ronald: Which, historically, isn’t that high. We’ve seen 6% interest rates not too long ago, y’know?
Adrienne: I think like when I started in real estate they were at 6%.
Attilio: No I just refinanced - what was it, no I refinanced my house.
Adrienne: You have a 6% interest. Yep.
Attilio: I bought it in 2007. It was 6%.
Adrienne: I think I still have a 6% interest but it’s like, I’m so close to paying it off, I’m like-
Ronald: We need to talk.
Adrienne: Yeah, no, no. It’s like $30,000. It doesn’t make sense that I’m going to go restart the loan.
Ronald: Unless you want to move it to like a 1% interest rate which we could help you with.
Ronald and Attilio laugh.
Adrienne: I like that!
Ronald: Or 1.75% if you can pay it off in 1-2 years.
Ronald: That might make sense and then there’s no points with our home equity line of credit products, which is another tool investors use.
Ronald: Where they do an equity line to get access to cash for down payments, or to make cash offers.
Adrienne and Attilio: Mhm.
Ronald: So that you’re able to be competitive in the marketplace and you don’t need to put an offer that’s subject to financing. But in your case where we see a lot of people with high interest rate mortgages, that they want to pay off, but they don’t want to go through the trouble of refinancing, and points, and escrow fees, and title insurance, if it’s a smaller balance like $30,000 we can do it with no points, no appraisal, no title insurance, on an equity line, and we have promo rates, y’know as low as 1% fixed for as long as 3 years at 2.75% which is a lot lower than the 6%.
Attilio: Oh wow.
Adrienne: Ooh, I like that!
Adrienne: We are going to have to talk about that.
Attilio: Leverage, leverage.
Adrienne: Change it over to an equity line of credit.
Attilio: You guys think about it. Just easy ways to understand it, Tony Robbins says use analogies. Monopoly. You don’t keep going around the Monopoly board and keeping with the same real estate. You turn those - I don’t know if it’s the red houses into green hotels, but you keep-
Attilio: -taking the money. Yeah, you keep leveraging. Once you have real estate paid off, we highly recommend. Now here’s the problem: This is what people do and where they get in trouble. They start buying depreciating assets. Trips to Vegas do not appreciate.
Attilio: A new car, credit card, consolidating your debt, that doesn’t appreciate.
Attilio: And your spouse will not appreciate you if you do stuff like that but they will appreciate you if you buy appreciating assets. That’s how it’s easy to remember.
Ronald: That’s a good point.
Ronald: Just don’t tell my mom the Vegas part.
Attilio and Adrienne laugh.
Ronald: She hasn’t gotten that yet.
Adrienne and Ronald laugh.
Ronald: But just finishing up that point about interest rates. So at 6% your payment would be close to $6,000 a month.
Adrienne: Oh wow.
Attilio: On a million dollar home.
Ronald: At a million dollars.
Ronald: At 6%, 30 year fixed, compared to the $4,775 at 4%.
Adrienne: That’s a big payment. It’s a big a difference.
Ronald: It’s a big difference.
Adrienne: That’s a whole nother mortgage payment on maybe a smaller condo.
Ronald: Exactly, right.
Ronald: Yeah, and the income to qualify would be $3,000 more. So instead of needing the $111,370 to qualify, your income quality would have to be $114,300 just for the mortgage payment. Not including any other debt or taxes or insurance. So if you find something I would lock in your rate.
Ronald: Unless your time horizon is shorter. If you’re going to turn around and buy another property in 5-7 years, we’ve got 5-7 year fixed rate mortgages that are adjustable rates.
Ronald: Advertised will be 30 years, but you get a lower interest rate. A lot of times a half percent or more lower.
Ronald: For locking in for a shorter period of time, and if you’re going to flip it to something else, or if you’re going to trade up to a bigger home-
Ronald: That might be a cheaper way to go and be able to get as much as house as possible.
Adrienne: Sounds like you need to have a plan though if you’re going to do the shorter term mortgages.
Ronald: Exactly, right.
Adrienne: You’ve gotta have the big picture and then work backwards from there.
Ronald: Right. You don’t want to be stuck into a mortgage that you can’t afford 5-7 years from now because you don’t know where rates will be.
Attilio: Now I know guys, you’ve got one of the real successful marketing campaigns. Wasn’t it like “That’s my bank?” And so here’s my suggestion for your guys’ new marketing campaign.
Attilio: Because I’ll lay the foundation of this new marketing campaign for Bank of Hawaii, on the analogy that Jodie, from Pacific Rim Mortgage gave us.
Attilio: She said if the weather is - let’s say interest rates in comparison to extremely cold weather. Is there a higher probability that the weather’s going to get warmer or even colder? The probability is that it’s going to get warmer if it’s extremely cold. So interest rates are extremely low, so just the probability that the interest rates will rise, so you guys should track down that lady that used to work at Costco.
Attilio: The one that was “Try some, buy some!”
Adrienne and Ronald laugh.
Attilio: And you should have her be your spokesperson.
Adrienne: Did you ever meet that lady at Costco?
Ronald: You know I go to Costco, but not regularly, because I - y’know, huge qualities.
Attilio: The samples.
Ronald: Yes, the samples, right?
Adrienne: I think she’s gone now though. I’ve been looking for her.
Attilio: Like, no, I go Friday nights when I’m feeling hungry, and I’m too cheap to buy dinner, and I just go to Costco and hit the samples. But that lady-
Adrienne: My kids get excited about going to Costco for samples.
Attilio: Do you remember that lady?
Attilio: She was so - “Try some buy some!” She’d be the spokesperson.
Adrienne: I haven’t seen her though. Where is she?
Attilio: And when you guys talk about interest rates-
Adrienne: She’s listening to all of us.
Attilio: “Try some buy some!” Where you at lady? We’d like hire you as the spokesperson for Bank of Hawaii.
Adrienne and Ronald laugh.
Ronald: We need good spokespeople.
Attilio: Yes. So alright anymore questions for Ronald?
Adrienne: So our last question is-
Adrienne: Who would be your ideal customer for-
Adrienne and Attilio: For private banking.
Adrienne: Who are you looking for?
Ronald: Okay so well - Thank you - our private clients typically, y’know - it’s the qualifications are very simple. Just a million dollar net worth and in Hawaii that’s actually not that hard, especially when you can count real estate and your home.
Ronald: Annual income of $150,000. Investable assets of half a million dollars, and balances with the bank of a million. But you only need two of the four criteria, so y’know we’re looking for - typically we get business owners, we get successful professionals, doctors, attorneys, and people who y’know, are investors. They’ve accumulated well over time and they just need help managing their assets. So you know we provide a team of people that can assist them in all the different areas whether it’s, you know, trust and estate planning, retirement planning, investments, helping with their mortgage-
Adrienne: Home equities.
Adrienne and Ron laugh.
Ronald: So we’re partnering with them to help them to be more successful.
Ronald: Using our resources and our skill set and tools, so we’re just like your financial concierge to help with all of your licensing needs and wealth management and wealth transfer needs through the generations.
Attilio: So, alright.
Adrienne: I like that description. You’re a financial concierge.
Attilio: So and your financial concierge should be somebody that’s in the lobby of the bank going “try some, buy some!”
Ronald and Attilio laugh.
Adrienne: No. It should be Ronald Chang.
Attilio: Ronald Chang. So speaking of which is there a good number they can reach you out?
Ronald: Sure. Probably the best way to reach me is via email at email@example.com. That’s R-O-N dot C-H-A-N-G @ B-O-H dot com. Or you can text, or call me on my cell at 753-3858, 753-3858.
Adrienne and Attilio: Alright.
Adrienne: Well thank you so much-
Ronald: You’re welcome.
Adrienne: -for joining us today and if any of our listeners want to contact Ron-
Attilio: They have his information.
Adrienne: They’ve got your private cellphone.
Ronald: Thank you for having me on the show.
Ronald: It’s been a pleasure and I wish all of your listeners a great day.
Attilio: So are we going to go to a break or do you want bring on Brooks and-
Adrienne: Let’s bring on Brooks.
Attilio: Alright, Brooks.
Adrienne: Talk about his coming soon listings.
Attilio: Hey Brooks are you there?
Brooks: I am here! How are you guys today?
Attilio: Doing great! Whatcha got for us?
Brooks: It’s a good day today to have a good day, isn’t it?
Adrienne: It’s always a good day.
Attilio: Yesterday was terrible, so I’m excited about today.
Adrienne: We’ve leaving the past!
Attilio: I don’t know what’s going on tomorrow so I don’t want to think about it!
Adrienne: At the beginning of the show you talked about not living in the past.
Attilio: Don’t live in the past. Live in the present.
Adrienne: Just right now.
Brooks: So if you’re in the present we have a couple of things to talk about.
Brooks: The coming soon property is a picturesque, very unique, and nice bungalow overlooking the Pacific, the beautiful and calm Pacific Ocean. Just shy of
Mā‘Ili Point so you can picture the beautiful Waianae Farrington Highway, the Waianae coast coming up to Ma’lli point. Right on that hillside there’s some really nice homes. They overlook, you could practically throw a rock into the ocean with one toss from this house.
Attilio: You gotta have a good arm though ‘cause you don’t want to hit the cars!
Adrienne and Attilio laugh.
Brooks: Yeah I know I didn’t hear what you said Attilio but I know it was funny because-
Adrienne: He said don’t hit the cars!
Attilio: He said make sure you have a good arm ‘cause you don’t want to hit the cars!
Brooks: Have a good arm in other words, yes.
Brooks: So, great view, automatic gate with moss blocked walls, watch the whales, watch the fireworks when they happen in Ko Olina.
Brooks: Quite a bit of parking, great landscaping. Just a super neat place and it’s very affordable, too.
Brooks: That’s coming soon, that’s going to be going live this coming week and our first grand opening event will be on the fifth of February. So right around the corner.
Attilio: Alright. Thanks Brooks.
Brooks: Now I’m going to be switching gears here and report for Abby.
Brooks: Abby has a grand opening event, can I talk about that?
Attilio: Yeah, go ahead.
Brooks: Okay so this is one that I talked about at last week’s show, it’s the really beautiful townhome nestled in the hills of Aiea, so it’s Iho Place is Ridgeway. Ridgeway is the name of the development. Quite a few sections to Ridgeway but Iho Place, you go up Talonoki, right above Aiea, right above Pearl Ridge, and you go up those, say half a mile or so, and then right on Iho Place. And this is a rim lot, it’s got views to die for. A very nicely put together unit, and the thing that really sets this unit apart aside from all the many other things is that it has two parking stalls.
Brooks: Most of the units up there just have just one. So that makes this one unique, really, really excellent. So what is the address? 98-755 Iho Place. That’s I-H-O Place in Aiea. Come see Abby. She’ll be there from 2-5 this coming Sunday.
Brooks: So tomorrow.
Brooks: She’ll be there from 2-5. I guess that’s how you do it.
Attilio: Yep. Look for the signs.
Brooks: A grand opening event, right?
Adrienne: Yes, awesome job, Brooks.
Attilio: Thanks Brooks!
Adrienne: Thank you.
Brooks: Thank you, I’ll talk to you soon.
Attilio: Alright who’s next? We got Janyce?
Adrienne: Yes, we have Janyce with Dream House Drafting.
Attilio: Wait wait! You gotta do the harps for her.
[Dream House Drafting jingle]
Adrienne: With her drafting tip of the week.
Attilio: Hi Janyce are you there?
Janyce: Yes I am, good morning.
Attilio: Good morning. Whatcha got for us today?
Janyce: Well I’ve got a little bit of a complicated tip today, but I’ve thought it was something that everyone needs to be aware of. All of us are trying to make sure we’re doing things legally, and getting building permits, but everybody’s human and there can be errors, and so I thought it might be advisable, and my tip’s always based on current things that clients are experiencing, to just share a little bit from the revised ordinance of Honolulu chapter 18-5 under the subject of validity. So it’s got a lot of legal speak but basically what it boils down to is-
Attilio: In English.
Janyce: If it is determined that after building permit has been given to you for your home, that an error was made the city examiners or anyone else working for the city and they approved it with incorrect specifications, that you are not protected from future notices of violations, binds, and/or having the building inspector tell you to stop work.
Attilio: Oh wow.
Janyce: Even if it is in truth their error.
Janyce: And so while this thing doesn’t have very often, it is currently a problem that a mutual acquaintance of ours is dealing with.
Janyce: And I thought that it also should be mentioned in the show, because it applies to the possibility of someone falling into this same trap with something that the city has been offering for a little over a year now called “One Time Review,” and this is the reason why a lot of engineers are not wanting their projects, when they stamp them, to go through the one time review, because it basically says that your stuff will be looked at one time by a city examiner. If they find anything and you fix it and bring it back, they’re not going to look at it again.
Janyce: But it doesn’t get you out from under this validity issue in chapter 18. So if they miss something, if in a rush it wasn’t done right, and you’ve spent all this money to build something, you’re still in this same situation where if for any reason it ends up being discussed, or noticed by the building inspector, then it must be corrected because the fact that a permit was approved for the way it was done, does not give you any protection.
Attilio: Alright. Thanks for all of that, Janyce. Appreciate it.
Adrienne: Yes, thank you Janyce. Alright so that was Janyce with Dream House Drafting.
Adrienne: You can reach her at 206-7107 or check her out at dreamhousedrafting.com.
Attilio: Alright thanks for that. Next we’ve got Keli'i. Keli'i are you there?
Keli'i: Hey! How are you guys doing?
Attilio: We’re ding great, whatcha got for us?
Keli'i: Alright I’ll be sitting a wonderful, beautiful home in the Ioloa neighborhood in Kapolei. It’s close to schools, shopping, golfing. It even has an amazing kitchen that was just completely remodeled, a 21 PV panel system on top of it. I recommend everybody come and visit. I’ll be there from 2-5 PM this Sunday, and if you folks are definitely looking for a comfortable, beautiful home to live in someday, or have someone who you know wants to, please come and visit.
Attilio: Alright, Keli'i. It’s the Villages of Kapolei right?
Keli'i: Namahoe Place. Oh yes, sorry!
Adrienne and Keli'i laugh.
Keli'i: The address is 91-25-
Attilio: ‘Kay whatcha gonna do?
Keli'i: Namahoe Place.
Attilio: You’re going to drive around the perimeter of Villages of Kapolei in concentric circles until you see his sign.
Keli'i and Adrienne laugh.
Attilio: Or just to go Namahoe place.
Adrienne: Also go to teamlally.com and check out all of our open houses there.
Keli'i: Thank you guys.
Adrienne: Or you can call the buyer hotline! What’s the buyer hotline?
Attilio: What’s the buyer hotline?
Attilio: Alright, thanks Keli'i.
Keli'i: Thank you.
Attilio: Alright so we got a couple minutes. How many minutes we got?
Adrienne: We’ve got like 30 seconds.
Attilio: 30 seconds! You can change the world in 30 seconds.
Adrienne: I know! So you know speaking of changing the world we have a career night coming up in March. March 6th.
Attilio: And we want to talk to you about a career in real estate.
Adrienne: Okay so now everyone’s perception of real estate is what we see in on TV.
Attilio: Well that’s not real. We’ve learned that even reality TV is produced.
Adrienne: We are everyday providing exceptional levels of surface.
Attilio: And we’re always looking for superstars.
Adrienne: So please, please RSVP at teamlally.com/careernight.
Attilio: Alright so you’re going to learn how to get started, aspects of the industry and how to succeed.
Adrienne: We hope to see you at our next career night, March 6th.
Adrienne: Alright so thank you for listening and thank you to our sponsors.
Attilio: Jodie Tonga and Derek Tonga of Pacific Rim Mortgage.
Adrienne: Bradley Mariama of Allstate Insurance.
Attilio: Nathan Baker with Pillar to Post Home Inspection.
Adrienne: Ben and Tony Mamuad of AAA Roofers.
Attilio: Janyce Myrland with Dream House Drafting.
Adrienne: John Speed of Kilauea Pest Control.
Attilio: Duke Kimhan with Hawaii Pacific Property Management.
Adrienne: John Menard of Kama’aina Plumbing.
Attilio: And Thomas Pattison with Pattison Land Surveying.
Adrienne: Myran Kamihara of Kamihara Law.
Attilio: If you want to get ahold of any of our sponsors just go to teamlally.com.
Adrienne: We also want to give a big thank you to Stephen our producer here in the studio.
Attilio: And Ronald our guest. Chee-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-
All: SOLD PROGRAM!
Adrienne: If we can’t sell your home at the agreed upon price and our time frame, we’ll have it bought for cash.
All: THANKS AND ALOHA!