The days of crazy appreciation in Hawaii are gone, so profit from flipping will have to be earned primarily upon adding real value to the property -- at a cost which is less than the added value. Assuming a stable market with zero appreciation, with any property type (Single-family home or condo), you must be able to increase the market value of the property (in my opinion) by at least 20%, while keeping your expenses, including carrying costs, realtor fees, etc., to no more than half of that amount. Naturally if your costs are less, you can afford to have less of an increase in the market value of the property.
And, also (in my opinion), the property must be either ever so slightly underpriced or spot on, so it sells rapidly.
The best areas on Oahu for flipping are those that are still appreciating, or that are stable and not declining - and this is provided that you are dealing with property types (e.g. 3 versus 2 BR homes w/ 2 versus 1 BA) and price points with the highest demand (right now the greastest demand seems to be both on the very low end and the very high end for SF homes). Look for foreclosures and eyesores which are really horrible only cosmetically, to get the max return. Right now, there is so much condo inventory that they may not be the best thing for flipping.
I would be exceedingly cautious in flipping properties here on Oahu. First be prepared for hefty capital gain taxes, rising costs for materials, labor and fuel and shortages in reliable, qualified, labor. The luxury market is probably the safest bet for flipping, but know your market, there are some soft spots even in the multi-million dollar markets here on Oahu. Best of luck-
Im stuck with a couple of rentals that I didn't unload in time and Im playing the waiting game.
If you are asking this question, you should not be buying at this time. While you "might" be able to make some cash after your agent makes 6% from your purchase and then 6% when you sell, the Hawaii Market is also FALLING and a reasonable profit is not likely.
Brokers and agents in the past "Bubble" period had the opportunity to "invest" without the cost of the in-out commission. The days of the quick and easy FLIP are over for now and for the forseeable future as are the days of Realtors easy 6% commision. Good Luck.
My name is Mike Gallagher and I am Broker in Charge at RE/MAX Honolulu.
Although this is a strictly a Buyer's Market now, flipping can still be done if you do your due deligence and are aware of the nuances within each of the Neighborhood Markets you are looking to make a quick profit.
Condos, which are the preferred choice for this type of action since the risk is much lower than for SFH's and are also in more demand than SFH's.
As a realtor my clients and prospects often times ignore the fact that most of my earnings come from Commissions on sales. This is not true. Most successful realtors will buy and sell property just like anyone else and make profit.
My choice would be to look at Condos as your preferred investment choice. Since most of the buyers in today's Oahu Condo Market are purchasing at the lower end of the price offerings I would look for a condo that is a 1-2 bedroom. Fee Simple, no pool and mostly no amenities that will drive up the Monthly Maintenance Fees.
Look for a Condo within these parameters, but make sure they have at least assigned parking stall and search the MLS for 'at market' or 'below market' offering prices and take it from there.
If you need help in this endeavor, please visit my website at http://www.hawaiirealestatestatistics.com and call or email me at:
I wish you much Aloha,
Broker in Charge