Hawaii Beach House Renovation

Introduction

So I'm a wanna-be house flipper and I've been doing a lot of reading, analyzing potential deals, and networking around my local area. Out of all of those things, networking is definitely my most favorite activity.

I get to meet new people and talk about something I'm passionate about.

Lately, I've been tagging along with some more experienced investors and have been getting a "behind the scenes" look into the whole process. So now, I'm going to start writing about the things I've learned!

For my first blog post, I'm going to write about an inspiring couple who just finished their FIRST renovation of an amazing beachfront home in Hawaii!

Meet the Investors

Alex and Delila started investing in real estate back in 2018 on the beautiful island of Oahu. Alex has a MBA and works full time as an accountant for a non-profit. Delila has a Masters of Arts degree and works as a Home Health Occupational Therapist.

Both Alex and Delila are also real estate investors who plan on flipping even more properties in 2019!

Ewa Beach Surf House

Quick Details

• 1,064 square feet of living space
• 4,043 square foot lot
• Two bedroom, two bathroom duplex
• Beachfront property with direct views of Diamond Head and gorgeous sunsets

Some Photos

Investor Interview

How did you find this property?

Delila's friend became a realtor and presented the property to Alex and Delila! The property was listed on the MLS for over 240 days.

How much did you acquire the property for?

Originally listed at $740k, the couple placed their initial offer at $640k. They accepted the seller's counteroffer of $695k! The purchase was financed through both hard money and private money lenders.

How much was the rehab?

A whopping $200k was the original budget. Why? Because they planned on converting the 2/2 duplex into a 3/3 single family home with a new garage! The ARV would've been at $1.15m. However, they ran into a serious issue when applying for construction permits: Hawaii's shoreline setback rules prevented them from doing any kind of new construction on the property within 40 feet of the shoreline.

With this new information, their entire plan took a HUGE hit. With the property already purchased, they needed to come up with a new plan. Fast.

Since the shoreline setback rules doesn't say anything about renovating existing structures, that's exactly what they did. With a budget of $113k and new ARV at just under $1m, they were able to beautifully renovate the property. 

How much do you expect to sell for?

The property was originally listed in December 2018 for $999,999. However, the current list price is now at $899k. 

What was the biggest lesson you learned on this flip?

Due diligence! Alex and Delila started on the property thinking they could raise the value of the home by making some major changes only to be stopped dead in their tracks due to some obscure law regarding new construction near the shoreline.

Conclusion

I think Alex and Delila did a wonderful job on their FIRST flip! Yes, they ran into an issue that completely derailed their original plans; and yes, the property is still listed even after a price reduction. But again, this was their first flip. They're still set to break even, if not profit a little. The value in the lessons learned on their first project? Priceless.

What was your first flip like? What challenges did you face? What lessons did you learn? I want to know!