1 Bay Dr #3506

Kapalua, HI 96761

$359,000F

3 bd · 3.5 ba · 2,065 sqft · Built 2008 · Condo · Active · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,692/mo
• Mortgage (P&I): −$1,883
• Tax + insurance: −$598
• HOA: −$6,765
• Vac / Maint / Mgmt: −$1,195
• Net cashflow: $-4,749/mo
• Annual: $-56,990/yr
• Cap rate: -9.58%
• Cash-on-cash: -56.70%
• DSCR: -1.52
• 1% rule: 1.59%
• Cash to close: $100,520

Investor read

• This is a 3-bed/3.5-bath condo listed at $359k.
• At list price, monthly cash flow is $-5k ($-57k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $359k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#102 in HI) — a working-class tenant base; expect higher turnover. Strengths: crime A+, employment A+; Watch: health & safety C-, amenities F, commute F.
• 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 Kamehameha Iii Elementary School (math 41% / reading 51%, grade D-, #68 of 183 statewide, top 37%, 607 students, 40% FRL); Lahaina Intermediate School (math 19% / reading 42%, grade F, #27 of 42 statewide, top 63%, 647 students, 51% FRL); Lahainaluna High School (math 12% / reading 57%, grade F, #30 of 43 statewide, top 76%, 1,037 students, 46% FRL).
• Watch-outs: HOA is 119% of rent.
• Market conditions: Rents rising (+4.0%/yr); 637 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 906 units permitted in Maui County in 2024 (289 in 5+ unit buildings).
• Maui County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 15 sale attempts since 12y 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 $99k; list at $359k implies a 263% gain — meaningful room to come down on a strong offer.
• At $5,692/mo this rent would consume 68% of the median local household income ($101k/yr) (locally 835% 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?
• 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?
• 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?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.