You CAN flip a home in Hawaii

[Francis J Carey]

Investment Info:

Single-family residence fix & flip investment in Kapaa.

Purchase price: $600,000
Cash invested: $300,000
Sale price: $1,479,000

In a three way partnership with a hard money lender in Florida we acquired this 4 bedroom 2700 square foot home on the island of Kauai. The home was distressed and the owners were motivated. After over 5 months of renovations we successfully sold the property to a local family/business owner.

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

We had been searching for a property to flip and came across this opportunity by sending post cards to listed owners of distressed properties. The owner called our number and we were able to construct a deal that was beneficial to both sides.

How did you finance this deal?

We used a hard money lender for both the purchase price and renovations. The hard money lender went in as a partner so the hard money costs were covered by the proceeds of the sale.

How did you add value to the deal?

Adding value was a 5 month journey and a complete renovation. Our renovation costs ended up around $300,000.

What was the outcome?

The outcome was approximately $100.000 per partner and a happy new home owner/family. This was our first flip and we feel blessed to have had the opportunity to help an owner

Lessons learned? Challenges?

We learned quite a bit about hard money lending, coordination and relationships with multiple local contractors. The entire project was a challenge but after all the blood, sweat and tears the deal produced what we'd hoped it would. Another lesson learned was that even in a high price area like Kauai a deal was possible. We just had to dig hard and work hard.

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

My wife Jennifer Carey, a realtor with Waioli Properties in Lihue HI, made the initial contact with the owners and fostered a fantastic rapport with them. Jennifer's knowledge of the local market and vast experience in property valuation was vital to this deal. Jennifer has over 13 years in providing broker price opinions and over 20 years listing and selling properties in NY, CA and the last 10 years on Kauai.