Considering buying first rental in HI (Oahu)

[Kenneth Burdick]

Hello BP community! Newbie here, so go easy on me :) I live in Southern CA and own a home in which we have over 50% equity. At some point, me and my family would like to relocate to Hawaii ... most likely Oahu, for the weather/beaches/lifestyle, etc. I know this is a difficult market from a LTR perspective, but I continue to be drawn to the idea of buying a duplex/triplex and renting it out for a few years until circumstances allow for us to wisely relocate there (want to let a child graduate from high school and then figure out what the employment situation will be). I'm thinking of putting 20% down on a home (will likely need to leverage some of the equity we have in our current home, either through a HELOC, cash-out REFI, or just selling the house altogether...) that would provide modest positive cash flow out of the gate while allowing us to get our foot in the door of the Hawaii market at current prices rather than higher purchase prices that I assume will exist a few years from now. Eventually, we would move into one of the units there and I would hope to add on and do more real estate investing locally there.

A couple things give me pause:

- COVID fallout. Is this an overly risky time to be buying in Hawaii? I know timing the market is impossible, but I wonder if prices could actually decline over the next year and I might be wise to wait and save a little more.

- Being so new to all of this, is it unwise to start with a million dollar home in a market like this? I don't want to stay on the sidelines unnecessarily because I want to "get in the game" and get some momentum, but I also want to make sure I'm not overextending myself right out of the gate.

Any thoughts you all would like to share would be very welcome. Loving the site so far. Thank you!