Short Term Rental Property in Legally Zoned Building in Waikiki

[Joshua Vasquez]

Investment Info:

Condo buy & hold investment.

Purchase price: $175,000
Cash invested: $55,000

250 sqft. Condo in Waikiki. Large lanai, queen bed, kitchenette, personally renovated down to the studs.

What made you interested in investing in this type of deal?

Legally zoned short term rental property in Waikiki. Very rare private building with no hotel affiliated.

How did you find this deal and how did you negotiate it?

Found the building during an open house. We didn't get the first one we saw but another became available and we pounced.

How did you finance this deal?

It wasn't easy. As far as I could find, there were only 2 companies that would finance this type of property. These condos do not fall under traditional financing rules. Ultimately, I received financing through my credit union on island. 30% down and around 5% interests for investment properties.

How did you add value to the deal?

I put about $10,000 into a renovation. The property was bought below asking price and $35,000 below the current tax value.

What was the outcome?

We are now renting at approx. $130/night with over 80% occupancy.

Lessons learned? Challenges?

Hawaii is expensive and short term rentals are always under attack by hotels and private interests. The market is hot though and it almost doesn't matter what you buy, as long as it is zoned properly.

Finding the legally zoned, well priced, fee simple property in Waikiki is the challenge.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Shannon Barber was our agent and she is GREAT! Very quick response time, extremely personable and highly knowledgable of the Hawaii real estate scene. Hawaii has some unique challenges when it comes to real estate. I don't think I could've done it without her.

Check out her Company: Barber and Co. Instagram: making.hawaii.home