I have 500K in cash to invest from the sale of an investment property

5 Replies

To prevent paying capital gains taxes, we used a 1031. We are looking to purchase buy and hold properties in Honolulu, HI. 

Our goal is to have solid cash flow within one year and liquidate in 10-15 years. Like all RE investors, we want to maximize both cash flow and property appreciation.

I understand that there are multiple options available, but what are the main factors we should be considering? 

Cash flow isn't easy to come by in Hawaii, as you likely well know. Right now I'm midway through renovation of a duplex flip near Chaminade and UH Manoa that will hit the market mid-month. It will be super easy to rent out given the proximity to those schools as well as KCC down the road, but the price point of that area itself means it won't cash flow. You'll have to be really selective in your location.

Medium oahu home buyers logo2Michael Borger, Oahu Home Buyers | (808) 377‑4379 | http://www.oahuhomebuyers.com

It seems to me that maximizing cash flow and appreciation is usually pretty tough. It's either one or the other :). 

Originally posted by @Michael Borger:

Cash flow isn't easy to come by in Hawaii, as you likely well know. Right now I'm midway through renovation of a duplex flip near Chaminade and UH Manoa that will hit the market mid-month. It will be super easy to rent out given the proximity to those schools as well as KCC down the road, but the price point of that area itself means it won't cash flow. You'll have to be really selective in your location.

Hi Michael, thanks for your response. We have been specifically looking in this area for a couple of reasons. 

I've been doing a lot of reading and analysis on properties in this area and it seems to have some of the best price points with the strongest cash flow on Oahu. Most appealing factor being the ability to rent. 

One thing to consider is that the appreciation of properties in the Moiliili/McCully and Kapahulu/St Louis Heights markets may not be on pace with other areas on Oahu like Kailua and Kaneohe.

What do you think? I would love your input!

@Harrison Gomes - That's a big question. Who knows on future appreciation? People have been calling for a ceiling on the Oahu market for a while now, but it keeps going up and up. However for cash purposes, being near universities is always a major bonus because you can practically eliminate vacancies.

Medium oahu home buyers logo2Michael Borger, Oahu Home Buyers | (808) 377‑4379 | http://www.oahuhomebuyers.com

@harrison gomes 

I think most areas of Oahu will have little to no vacancy ... except areas impacted by the potential drawdown of Schofield.

If the current bill passes and you can (legally) rent a property on a short term basis, Kailua could be an excellent place to invest.  Don't give up on your desire to find a property that will cash flow -- took me over 70 offers but I got one.