Flipping houses in Hawaii is not for the faint of heart. With an average home value that is more than double the national average, the stakes are high in the Aloha state. In addition, the impact of Covid-19 has had a negative impact on the tourism industry, leading to a large spike in unemployment.
Despite these challenging conditions, there is money to be made in the 50th state. Now let’s take a more detailed look at how to flip houses in Hawaii.
Hawaii House Flipping Stats
Median Purchase Price
$508,850
Median Resale Price
$575,720
Average Revenue
$66,870
Price Per Square Foot
$532
Hawaii Population Size
1,415,872
Median Household Income
$78,084
High School Graduation
91,8%
Travel Time To Work
27.4 Mins
Best Areas for Flipping Houses In Hawaii
- Urban Honolulu
- East Honolulu
- Hilo
- Pearl City
- Bear
Safest Areas In Hawaii
- Kaneohe Station – Safety Rating: A+
- Schofield Barracks – Safety Rating: A+
- Hickam Housing – Safety Rating: A+
- Wailea – Safety Rating: A+
- East Honolulu – Safety Rating: A+
Please note – All the statistics in this article are based on 2020 data. You can view the data sources at the bottom of the article.
The Basics Of Flipping Houses In Hawaii
- Find a property in Hawaii that is undervalued
- Source funding from a reputable lender
- Buy the property for a price that makes it possible to generate profit when it is resold
- Complete renovations that will increase the after repair value
- Find buyers for the property and sell it for a healthy profit margin
How To Find Houses To Flip In Hawaii
1. Use FlipScout By New Silver
- Free to use
- Works for flips and rentals
- Get alerts to your inbox
- Calculates rehab costs automatically
- See ROI and rental income instantly
- Aggregate results from various sources
2. Leverage The Power of Wholesalers
Finding a good wholesaler can be very rewarding for a property flipper. Wholesalers tend to have access to all the most relevant property databases, and they often have unique personal networks. By using a wholesaler, you effectively gain inside access to their knowledge of properties in Hawaii.
3. Attend Bank Auctions
Bank auctions often present opportunities to purchase properties below their market value. This is mainly because banks hold these auctions in order to sell the properties as fast as possible. If you attend bank auctions with a clearly defined strategy, you can potentially walk away with a new property that fits in perfectly with your investment portfolio.
4. Use Direct Mail To Find Off-Market Properties
Although it is considered an old school technique, direct mail can still yield positive results for house flippers. Direct mail has been shown to have a higher response rate than email, and numerous studies have shown that people actually enjoy checking their mailboxes. More importantly, you might be surprised by how many people have considered selling their homes. Your letter could be the trigger that they have been waiting for.
5. Sign Up To The Multiple Listing Service (MLS)
Even though MLS listings can be competitive, it is still a good avenue for finding properties to flip. The MLS is literally a database created by real estate agents, and it is filled with property details and statistics that can help aid your research process. There is a fee involved, but one deal is all you need to comfortably cover the costs.
6. Find Foreclosures
When properties fall into foreclosure, the primary goal of the loan originator is to recoup any potential losses. This is good news for house flippers, because properties in foreclosure often sell for less than their market value. If you are able to locate foreclosure opportunities in Hawaii, there’s a good chance you will be able to purchase a property for less than its market value. This is why foreclosure can serve as a great platform for a potential flip.
Hawaii Housing Market Analysis
House Flippers Are Selecting Mid To Low End Houses: There is a notable gap between the median home value in Hawaii ($668,175) and the median resale price for house flips in Hawaii ($575,720). This suggests that investors are generally focusing on the mid-to-lower end of the market where it might be easier to find poorly maintained houses that have the potential to be renovated.
It’s also worth pointing out that property flippers in Hawaii are generating approximately $66,870 in revenue per flip. To achieve results like these, selecting the right property is key. Experienced flippers know how to transform the after repair value of a home, by focusing on renovations that are known to increase resale value.
Home Values Have Appreciated By 3.9%: According to Zillow, home values in Hawaii appreciated by 3.9% over the last year. Moreover, property prices have been steadily increasing since late 2012.
Despite taking a small dip when covid-19 first arrived in the US, the Hawaii real estate market has responded well since then. Historically low interest rates have increased demand for homes, while the supply of houses hasn’t increased proportionally. This is a recipe for continued home appreciation, at least in the short term.
Homes In Hawaii Are Very Expensive: We mentioned this in the introduction, but it’s worth repeating. Homes in Hawaii are more than double the national average. To be more specific, the median home value in the US is approximately $266,222. This pales in comparison to the median home value in Hawaii, which is $678,175.
The high cost of Hawaii homes means that the stakes are pretty high for house flippers. Your initial deposit will be higher, monthly repayments will be higher, and certain materials may need to be imported from other states. In other words, to flip houses in Hawaii, you need to have first hand house flipping experience.
Unemployment Has Spiked Due To Coronavirus: Of all the states that have been affected by coronavirus, the economy of Hawaii has arguably been hit the hardest. This is mainly because Hawaii relies so heavily on the tourism industry.
To put this into context, in March 2020 unemployment in Hawaii was sitting at 2.9%. Fast forward to April 2020, and that number spiked to 23.6%. Fortunately the labor market has responded well, with unemployment down to 9% as of December 2020. It is reasonable to assume that the unemployment rate will continue to drop, which is good news for the Hawaii economy and real estate market.
Apply For An Investment Property Loan
If you’re ready to start your house flipping journey, New Silver Lending can provide the capital you need to fund your first flip. We offer ultra fast hard money loans with competitive interest rates and quick closing times. The entire application can be completed in less than 10 minutes.
Next Steps
If you’re committed to flipping houses in Hawaii, the next step is to invest time and energy into finding the best possible property. We have outlined a number of methods in this post, and all of them can potentially bear fruit.
Once you have identified a property, using a reputable Hard Money lender like New Silver can help accelerate the house flipping process. Our company is built on speed, efficiency and user-friendly technology. The online application can be completed in less than 10 minutes, and we offer instant proof of funds letters to all of our clients.
Property Flipping Resources
Hard Money Loan Calculator: Analyze the costs of your next flip in detail with our hard money calculator.
ARV Calculator: Workout the After Repair Value of the property that you are hoping to flip.