2018 Fern St #304

Urban Honolulu, HI 96826

$347,000D

2 bd · 2.0 ba · 667 sqft · Built 1970 · Condo · Active · 117 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,975/mo
• Mortgage (P&I): −$1,820
• Tax + insurance: −$328
• HOA: −$702
• Vac / Maint / Mgmt: −$625
• Net cashflow: $-499/mo
• Annual: $-5,993/yr
• Cap rate: 4.99%
• Cash-on-cash: -4.66%
• DSCR: 0.79
• 1% rule: 0.86%
• Cash to close: $97,160

Investor read

• This is a 2-bed/2.0-bath condo listed at $347k.
• At list price, monthly cash flow is $-499 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $259k (25.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $298k (14.3% below list).
• It's been on market 117 days — a 9% lower offer ($316k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $259k (25.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-1.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Hawaii Department Of Education (suburban): math 32% / reading 50% proficiency, ranked #1 of 1 in HI (top 100%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: King William Lunalilo Elementary School (math 27% / reading 42%, grade F, #108 of 183 statewide, top 61%, 260 students, 64% FRL); President George Washington Middle School (math 30% / reading 46%, grade F, #17 of 42 statewide, top 39%, 569 students, 61% FRL); Kaimuki High School (math 12% / reading 47%, grade F, #35 of 43 statewide, top 86%, 620 students, 60% FRL) — zoned schools average 62% FRL vs 39% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $122/mo; HOA is 24% of rent.
• Market conditions: Rents rising (+3.5%/yr); 161 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); 1,638 units permitted in Honolulu County in 2024 (793 in 5+ unit buildings).
• Honolulu County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 24y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $240k; 45% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.0% vs local median 1.5% in Urban Honolulu — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $2,975/mo this rent would consume 52% of the median local household income ($68k/yr) (locally 2466% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 117 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Built in 1970 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.