All Forum Posts by: James Joyce

Hi everyone,

Thanks for all of your input! I just wanted to circle back to see if anyone has additional thoughts in light of developments over the past month. Also, the sellers of the 2BR Honolulu condo I'm interested in came back to me and knocked another $15k off the price, bringing the price to about 96% of recent sale comps. I already have a friend lined up to rent the second bedroom, which would cover almost half of total monthly expenses, so I'm optimistic about the house-hack for the next two years. However, I'm still planning on moving back to the mainland in a couple years, and it's really hard to gauge whole-unit rental comps (they're all over the place). As of now, it looks like I'd be anywhere from negative $500 per month to cash-flow neutral. I'm still pre-qualified for a 2.75% mortgage with a small lender credit. 

Given all of that info, should I pull the trigger on this place? Or is the Honolulu RE market about to fall further in the coming months? Also, since I will likely be cash-flow negative (at least initially) when I start renting out the whole unit in a couple years, is this a wise investment? I expect to have the income to pay a few hundred dollars per month out of pocket and would be willing to do so if it's a good move over the long term. I know appreciation on Oahu is historically strong, but I'm wondering if it's wise to bet on that appreciation while bleeding some cash in the short term.

Thanks for all of the help! I'm new to real estate and really appreciate any guidance I can get.

@Christian Cramer Thanks for that info! Why do you think prices wouldn’t drop for 3-6 months? It’s not exactly a secret that there’s a recession coming, so shouldn’t the market begin to reflect that expectation soon?

Hi everyone! I'm currently renting an apartment in Downtown Honolulu and have been looking to purchase a 2-3 BR condo in the Kaka'ako / Ala Moana / Waikiki area, somewhere in the range of $450k-600k (I'm already pre-approved up to $700k at ~2.75%). My plan is to house-hack it for a couple years then rent it out when I leave Oahu, holding onto it for at least 5 years (but potentially longer) before selling. I already made an offer on a 2BR in Kaka'ako last week, and the sellers dropped the price significantly in their counter-offer, but I ultimately walked away from the deal after they were unwilling to drop further.

I have heard that the Hawaii RE market is resilient, but I have to imagine that the economic uncertainty and impending recession due to Covid-19 will drive prices down to some extent in the short-term. How long will it take the new economic reality to be reflected in the Honolulu RE market? Any prediction on how much prices may drop? I am eager to buy, but also patient and willing to wait if doing so will mean lower prices. I'm reluctant to "grab a falling knife," but also know that perfectly timing any market is impossible. 

My plan right now is to make low-ball (but not insanely low) offers on properties currently listed for sale and see who's panicking and eager to sell. I know it may take a while but I'm not in any rush because I think time is on my side (and my lease on my current apartment doesn't end until May 31 anyway). Any thoughts on that strategy? How low (relative to pre-covid market value) is low enough to reasonably protect myself against a short-term downturn in rents and resale values?

I'd love to hear any and all thoughts and advice! I'm brand new to real estate so I appreciate any help I can get. Thank you!