Any ideas on investing in the Big Island, Hawaii?

Question

Hey all! The title pretty much covers it. My wife and I absolutely love Hawaii (although we are from GA (-: ) and think that -- now that Oahu, Maui, and Kauai are essentially maxed out or unaffordable for the vast majority -- people will be flocking to the Big Island in the near and distant future. I just wanted to see if anyone has any perspective or ideas regarding this area. We are newer investors, but I believe we're just under the threshold for a USDA loan in that area, also, which would be even more appealing in the beginning stages -- since we won't be house hacking. I do have a few older acquaintances that I could seek for advice. Of course, a lot of research is required in this area due to widespread permitting issues, lava zones, etc. Any input would be greatly appreciated!

Henry T. · Answer

Land is cheap outside of the two cities. You'll have to catch rain water. Blow a hole in the ground for a cesspool. Soil is about 4 inches thick then you hit rock.  Internet is spotty.  Hopefully you can get your house built before all the  materials get stolen.  Str recently disallowed where my brother lives.  Weather is great. If you get up high enough in elevation you can avoid the 3" sized roaches and termites, so someone told me. Hard to believe though.  I'd like to get back there someday. I wanna see that rock where they cooked Capt. Cook and ate him. Wild place.

Mark Waite · Answer

@James Potter there are a lot of people on BP who like to share their expert advice, although having never done business in that market. First bit of advice is to connect with someone in that market. They know best what the local regulations are (and they differ across the state). Then start to look st the numbers. Opportunities do exist in spite of this NOT being a buyers market.

@James Potter If you are considering an STR property, you'll have similar rules to Kauai, in that it has to be in a designated area. Most of the areas are areas zoned for resorts.

If you are thinking longer term, yes, you can get more for your money on the big island.

Henry Clark · Answer

1.  Why are you investing there?

2.  What type of property?

3.  How much can you lose or cash flow?

4.  What is your cost of failure?

Hawaii, all of the islands market is based on the Stock market.  Especially Japanese investors.

A.  Look back in history and find the markets that have both gone down and then rose the most.

B.  Treat this as a Buyers' market.  Pick 4 properties you're interested in.  Cut their prices by 2/3rds.  Subject to inspection, subject to etc etc.  If they have to have a certain price, then tell them $xxxxxx to be paid in 5 years, with no interest.  On a personal note, not tied to the property.

C.  Google Hawaii Big Island real estate trends.  You have to mentally switch from a Sellers market mindset to a Buyers market.

D.  You will have to find financing there.  Your normal bank won't cross state lines.  Or you will need to go with a National firm.  Get your financing in order.

Clark Kahawaii · Answer

Aloha @James Potter,

I am late to the party, but checking to see if you ever made any movement after this post. Investing on the Big Island is great if you have a plan, but can be daunting due to all of the rules and regulations for renting a home. Please feel free to reach out if you have any questions. I manage a large portfolio of rental properties on the Kona side, and at the very least can help you understand the market.

Kanani Fredrick · Answer

Aloha @James Potter

I have to agree with your above replies. Im very new to REI but I do know the Big Island Market. I use to live there so I am very familiar with the areas. I would suggest you look into what kind of strategy/end goal to help you better determine what kind of property to invest in. Im guessing that since you live in GA you might wanna do a STVR. if that's the case, I would do more research into the Hawaii regulations because I don't think they are legal everywhere and I know there are a lot of rules and regulations regarding VR in Hawaii. The Hawaiʻi Island Market is more attainable than the other Islands, but it's just a matter of location. However, if you need help to determine what areas are good please reach out!

I Hope this helps! Good luck!

Mahalo,

Kanani

Chris Piel · Answer

I agree with your general notions. Dig a bit deeper on what strategy / locale you're looking for and we can help. Generally, I'd recommend using the lowest down payment possible to get into a live in flip / house hack. If you're looking for a pure rental property pickings are slim unless you're only focused on long term appreciation. That said, someone with good knowledge and hustle can do well. Be aware of upcoming proposed county level rule changes to hosted STVR.

Chris Piel · Answer

Listen to this man.

James Potter · Answer

Absolutely!! Hahah never a bad thing!! ;)

Any ideas on investing in the Big Island, Hawaii?

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