New and moving to Hawaii. I want your opinions on my opportunity

20 Replies

Thanks for the guidance here.  I am new to this but have been fortunate to have great equity in my current home.

I plan to move to the Big Island of Hawaii in the next year.  I have appx 200K equity in my current home and want to use this to get there.  The job market is thin there and will have to start a business which will be a cold pressed juice mobile establishment.

The finances will look like this:  80k to the new home of 280k. I will finance the 200k.

Pay cash for the mobile business of appx 60k well equipped.  This will leave a buffer of 60k to ensure I start up, and can keep running.  All goes well this will leave 60k to also re invest into something else down the road.  

I reach out to ask you all as I am completely new to this and hope to turn my main home as I have done before.  I also would like to invest in real estate as time goes on with any extra money that comes in.

Thanks so much for any insight you may provide.


Andrew

Originally posted by @Bryan Martin :

@Andrew Meikle Hi Andrew, I'm not sure what your actual question is. Can you clarify what you're looking for and then we can try to help?

I guess the question is can you run a food vendor business profitably  ??  

Originally posted by @Andrew Meikle :

@Jay Hinrichs

Thanks for the reply dude!

If you wanted to move to Hawaii and home is $300k. How would you spend $200k as a financial minded individual?

Keep in mind I do need to source my own income as market is thin.

When you get to the outer islands market is thin as you state..  

If it was me I would set up a Japanese wedding company !!  when I am in Honolulu we have a view of Ala Moana park and the Japanese couples that come to Hawaii to get married are down there one after another for their pictures. its a big business.  Just hire someone who speaks the language .. 

 

@Jay Hinrichs @Andrew Meikle The Wedding Company makes a lot of sense. It may be tough getting established, but weddings are expensive and I imagine it's busy year-round in Hawaii.

Have you spent substantial time on the island? If not, maybe try to get a job there or even a remote job you can do from home to start until you get a feel for what is needed on the island. I personally think the juice business probably has a high probability of failure. I could be wrong though as I'm by no means an expert.

Originally posted by @Bryan Martin :

@Jay Hinrichs @Andrew Meikle The Wedding Company makes a lot of sense. It may be tough getting established, but weddings are expensive and I imagine it's busy year-round in Hawaii.

Have you spent substantial time on the island? If not, maybe try to get a job there or even a remote job you can do from home to start until you get a feel for what is needed on the island. I personally think the juice business probably has a high probability of failure. I could be wrong though as I'm by no means an expert.

U would need a Japanese partner for sure.. but its a HUGE business in Honolulu dont know about Island of Hawaii its a big island with the main tourist areas From kona up to the north so pretty spread out. 

the ones I see in Honolulu have packages with the big Hilton Waikiki  the Japanese tourist really love Waikiki Although with Covid I bet its been shut down.. Japan is still way behind us .  they have not even started vaccinations or its just now starting. 

Its very clannish there as well ..   End of the day its tourist based.. if I was doing food cart I would go for the Snow cones  the guy who has one the one in Kihei kills it.. so do some of the Ice cream vendors.

 

Originally posted by @Bryan Martin :

@Jay Hinrichs Seems like the snow come business is saturated there. Too much competition, not saying it wouldn't work, but I bet there's been a ton on snow cone companies that didn't make it and saw their money melt away.

well one can always try to be a wholesaler or sell Amway !!  

 

@Jay Hinrichs @brianmartin

Part of the juice business plan is to run a Taiwanese shaved ice that will be infused with cold pressed juice. Making the snow itself it’s own texture and style. It would be a first in the world cold pressed infused shave ice company. This will give me something unique and different as it’s technically a healthy dessert item.

Brian: I have not spent any time on this island and yes there is some competition for cold pressed juice and shave ice on the island. I will have a good advantage being mobile and little to no overhead as the business will be paid for.

I have also considered once established investing in camper vans to rent on this island. They have a ton of camping opportunity on the island. This would be my step toward passive income. Ultimately to free up time and money for something like real estate.

@Bryan Martin I was misspelled your tag before. I replied in the above message to your comment.

I do agree that it may be best to see what May work there before buying a juice truck/trailer.

I do have juicing equipment now and have been learning the trade. I can very easily set up at farmers markets to test the viability of the business.

I am selling to friends and coworkers now and selling out every week. 35 bottles is about all I can produce now in a week as I have a big kid job.

@Andrew Meikle

Do you enjoy juice making, from your comment is sounds like you would just buy this business because you need to make income and not because you love it. In my opinion, if your heart is in real estate and not this mobile juice bar, then I recommend you chase your real estate dream. $200k is a hefty amount of cash to get you started on your way to financial freedom.

I recommend you find and purchase a fourplex using an FHA or conventional loan. There are currently a few triplexes and fourplexes available on Oahu. If you buy up to a four unit property and live in one of the units, you could put as little as 5% down. After renting the other units you could have a very small mortgage to pay as the rest would be covered by your tenants. Then I would use the remaining funds to secure off market properties to flip or buy & hold.

If you are living for free and making money off your rentals, you could be well on your way to financial freedom. If your looking for validation on your juice bar, it may be difficult to get that on this forum as the information shared is not enough to gage if it is a good investment or not.

@Mario Cuartas

I have definitely downplayed my love for making juice. I know this is a real estate group so I didn’t press too hard on this topic. I am realistic in thinking that juice may not be the most profitable especially in the beginning. My true dream of leaving my day job to pursue something I can wrap my heart and soul into is juice.

Selling and purchasing houses is a part of all of this. Your opinion on buying a 4 plex does sound very appealing and I will look into that. There is also jobs on that island that are in my field of work already (radiological protection). I am gonna start searching for 4 plexes to get a better idea. For some reason this seems very difficult to achieve but only cause I am new to all of this.

I am keeping my mind open new And big ideas. This is on point Mario! Thank you so much man.

Andy

@Andrew Meikle As others have stated, I'd strongly test the juice market before making a major life decision like this. Not to throw water on anyone's entrepreneurial dreams, but uprooting yourself and moving six-figure sums to start a juice business in a place you've never lived would scare the daylights out of me, even if I didn't have a family to support.

Regarding juicing itself, you have to ask yourself what kind of income you would need to generate and whether that's feasible. 35 bottles/week, no matter what you're charging, won't pay the electric bill. You also said you'd have little to no overhead because the business would be paid for -- that may technically be true but only because you'd have paid outright 60k cash. That money's now allocated and not otherwise working for you, so it's a matter of how you perceive opportunity costs. I'm not saying it's wrong to look at it that way, but just a perspective.

Another thing to think about is whether juicing will at some point lose its day in the sun as another health fad. What will you do if it's replaced by the next thing? It amazes me that people will sit down to a 'healthy' acai bowl and wolf down 700 calories and 60g sugar because they're lured in by the marketing of a magical Amazonian berry when they can grab a handful of blueberries for a couple of bucks.

Lastly, though, I'm all for using real estate to fund your true passions, whatever they are. I don't love real estate -- I'd much rather spend my day reading science books, strumming the banjo, or going hiking than analyzing yet another flip. I use, though, so that I can support my family and do those other things as well.

@Michael Borger

All good things to consider and thank you for your wisdom.  I will keep to the drawing board here.  I will test this market before opening a business.  I am very intimidated by real estate investing but have seen the potential. 

I want to move to Hawaii and use my $200k equity to make moves with.  I would need at least 80k for the down payment.  What would you do to make the remaining work for you and spend wisely? I have the option of renting my home in Utah, and buying over there as well.

Aside from my mortgage, I am debt free.  The wife and I are not having children.  I also have a roommate to help with my mortgage there when I move.

Hi! Just sharing my 2 cents. I am from Kauai but live in Bend, Oregon. One of my favorite businesses on Kauai is Kauai Juice Co- I looked into doing something similarly here as there really is nothing. You prob have already found out that there are a lot of hurdles so just be sure to do your research! Having a floor drain is one thing (not sure if you can get away with a mobile cart to make it) and only being able to sell cold-pressed juice from where you make it is a FDA rule that makes it difficult to start. Anyway- best of luck!! 

Aloha @Andrew Meikle

Allow me to throw a few ideas out as a resident of the Big Island.  You mentioned in your first post an intent to move to the Big Island specifically.  Others have mentioned Oahu, but Big Island is pretty unique among the islands and has a number of differences from the other islands.  Are you set on Big Island as your destination?  Just curious why you chose this island as you commented that you've not spent any time here?  

Do you have a place in mind to purchase?  Based on your estimate of $300k you are almost certainly looking at Hilo side, unless you would consider a smallish condo in Kona or Waikoloa Village.  As many have noted, Hawaii is a tourism-based economy and your juice truck would do much better catering to the tourists.  However the vast majority of tourism on this island takes place on the Kona side, which is a minimum hour and a half or so drive depending on where Hilo side you are coming from (if you plan to live in Puna district, like in Keaau or Pahoa area where the cheapest housing prices are, add another hour onto that commute).  So my first suggestion as you consider the Big Island is to get more familiar with the geography.  There are farmer's markets all over the island, but some cater more towards tourists and wealthy transplants, rather than the working class locals.  You will be able to charge a much better premium selling to the first group.

As for others' suggesting the Japanese wedding business, just putting it out there that it would not be nearly as profitable on the Big Island.  There are far fewer Japanese tourists on this island than Oahu or Maui.  Not to say there are none, but where I can relate to seeing multiple Japanese couples posing for wedding pictures every day at Ala Moana when I lived in Honolulu, here on the big island it is much less common.  This is more a general comment as it sounds more like you are looking for a way to make enough to enjoy your passion of juicing rather than searching for other opportunities.

As for your camper van business idea -- I would suggest against it.  Similar concepts have been tried by others and failed.  While there are many excellent places to camp on the island, there are actually very few proper campgrounds.  Most camping is done by setting up tents on secluded beaches or down 4wd tracks.  Plus nearly everything is viewable via a day trip from the major resort areas. Those who want more of an outdoorsy camping experience tend to stay at Airbnbs with tiny houses, tree houses, cabins, etc. that cater to that experience.  Camper vans would cater to a very small, very niche audience of tourists and I think you would have a very hard time recovering your costs.

As to the juicing business I can't say much about regulations and such since I have no experience in the field.  But I do have some close friends who own a small family business selling shave ice, smoothies, fruit bowls, etc. to tourists near Pololu Valley at the north end of the island.  They run their business out of a trailer, but permanently parked on their own private land.  I can tell you that during busy tourist seasons they have a very hard time getting enough fruit to keep up with their sales.  They grow a lot of their own and also purchase from several local farmers and even from Costco but still struggle to find enough when peak season hits.  So make sure to take the time to research your supply chain too.  Remember, we are on a small island a couple thousand miles away from most everything else.  Expect supplies to be limited at times and always more expensive than you're used to now.

One final comment on the real estate side.  While rentals properties can be profitable on island, those opportunities are few and far between.  House hacking is an excellent option to keep your living costs down -- whether you just have a roommate helping with expenses as you mentioned or if you buy a house with an Ohana unit or even a duplex, tri or quadplex (harder to find on this island because of zoning, but not impossible) and rent out the extra units.  But don't expect great cash flow from a pure investment standpoint.  You can find cashflowing properties here, but not the kind of cashflow that exists in a lot of cheaper markets on the mainland.  In Hawaii, you're mostly having to gamble on appreciation, which is just that -- A GAMBLE.  Historically, it's a safe bet long-term, but markets fluctuate a lot so you could find yourself stuck sitting on something waiting for it to appreciate while other opportunities pass you by.

Also right now like nearly everywhere else, the RE market on the Big Island is INSANE.  Extremely low inventory, tons of competition especially from mainland buyers (the California exodus is real and a lot of them are coming here with piles of cash to buy a home sight-unseen).  Nearly every property hitting the market is getting multiple offers, and most are going for over asking price -- many with cash offers.  There's plenty of debate out there about what will happen with the market in the future and I'll let you read the many other posts about that and decide for yourself, but I just want to remind you what you are up against buying right now on the Big Island.

I hope this wasn't too discouraging as I didn't intend it to be.  Just wanted to help give you a few more things to think about as you make your plans. Feel free to get in touch when you make it out here.  I'd be happy to talk story and I'll certainly buy a cold pressed juice shave ice from you if/when you get set up.  Best of luck.

--Paul

@Daniel Kong

I would put that much down for a manageable payment. Also just to purchase as I am on mainland they want 20% down for a second home. That way I can purchase then move. Not all is necessity but thought this to be the easiest.

I must to more investigating in to the potential of property investing. I am a bit intimidated by it. Where would you begin to educate??

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