2873 S King St #203

Urban Honolulu, HI 96826

$271,000D

1 bd · 1.0 ba · 570 sqft · Built 1969 · Condo · Active · 69 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,798/mo
• Mortgage (P&I): −$1,421
• Tax + insurance: −$452
• HOA: −$641
• Vac / Maint / Mgmt: −$588
• Net cashflow: $-304/mo
• Annual: $-3,644/yr
• Cap rate: 4.95%
• Cash-on-cash: -4.80%
• DSCR: 0.79
• 1% rule: 1.03%
• Cash to close: $75,880

Investor read

• This is a 1-bed/1.0-bath condo listed at $271k. Condition is rated good.
• At list price, monthly cash flow is $-304 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $227k (16.2% below list).
• Meets the 1% rule at list price ($3k rent vs $271k).
• It's been on market 69 days — a 6% lower offer ($255k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $227k (16.2% 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: Prince Jonah Kuhio Elementary School (math 22% / reading 37%, grade F, #122 of 183 statewide, top 71%, 196 students, 66% 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 (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: HOA is 23% of rent.
• Market conditions: Rents rising (+3.5%/yr); 224 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 122d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 3 sale attempts since 5y ago; this cycle's ask has dropped $20k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 4.9% vs local median 1.6% 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 $2,798/mo this rent would consume 49% of the median local household income ($68k/yr) — 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 69 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• Built in 1969 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?