House Hacking in High Price Market, Oahu

[Charlie S. Webster]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Kailua.

Purchase price: $825,000
Cash invested: $94,000

3/1.5 SFH Fixer Upper. Received $15.5k credit, actual price $809.5k. House hacking with two roommates and self renovating the house, converting to 3/2, and converting Family Room and storage closet into Studio/1Bath. Adding Accessory Dwelling Unit with attached garage and workshop.

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

Military with VA Loan moved to Hawaii. Interested in forced equity/house hacking, and 2015 changes to Accessory Dwelling Unit laws. Home is on greater than 5k sqft lot within 10 minute walk to beach. Was the cheapest on the market that was really close to the beach.

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

MLS. Offered full price due to houses in Kailua VERY desirable and not on market long. Inspection showed new roof and minor termite damage. Asked and recieved $15.5k credit

How did you finance this deal?

HELOC on previous 2012 Short Sale investment and cash provided down payment. VA 10% down loan yielded lowest VA loan fee. Original rate 4.25% (would be 4.5% with recent rate hike). Bought down the rate to 4.0% from 4.25% for $16k due to intention to buy and hold original low interest on $730k loan with $3900 PITI. Will finance all renovations with a combination of cash, HELOC

How did you add value to the deal?

I intend to add/ create two units and multiple bathrooms, self renovate, and house hack with roommates. Additionally, considering adding a tiny house to the very large driveway for additional income.

What was the outcome?

Just getting started, will fill you in later

Lessons learned? Challenges?

Stick to your guns on counter offer. I stood firm on $15.5k credit after their $10k counter. They accepted my $15.5k request. It was a fair request.

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

Vickie Graham in Kailua was a great agent, video taping the entire property for me so I could buy site unseen in person.