What kind of REI market is Hawaii?

[Micah A.]

I'm new to REI (about 1 year) and have a condo on Oahu that I'm using a buy and hold strategy on. I would like to know what the current state of Hawaii's REI market is. Is it a buy and hold, fix and flip, wholesale etc...? I just want to make sure my money is backing the right horse for my location.

[Michael Mazzella]

Aloha from Hawaii Kai, @Micah A.!

Welcome to the site, and to the exciting world of Hawaii real estate investing! There's potentially big money in this business and the work is fun... (most of the time, hahaha!)

To answer your question, the Oahu / Honolulu metro is ideally suited for wealth creation - appreciation plays, as in combining forced, instant, and market appreciation (i.e., house flipping), as these are mostly all 6-figure deals. That means most people can replace their w-2 income with just one house flip a year. By the time you're flipping 4-5+ houses a year, you're in the top income bracket making $400k - $600k a year, and it truly becomes life changing. I've got 22 projects with 39 house-flips in progress at the moment here on Oahu, which shows that there are plenty of deals to be had here. Obviously getting funded is essential, also totally do-able. 

Its possible to cash-flow stuff here too, (I've got a few rentals here) but the cash-on-cash return is typically lower than what you can find elsewhere, because of the high price-points here. As an example, for some of my passive income, a few years ago I took $1.5m and bought 48 houses in Jacksonville, FL, which provide a NOI of $20k to $22k per month.

Seize the day, Micah - now get out there and kick some okole! ;-)