1400 Pensacola St #505

Urban Honolulu, HI 96822

$399,000D-

2 bd · 2.0 ba · 852 sqft · Built 1969 · Condo · Pending · 130 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,362/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$292
• HOA: −$1,073
• Vac / Maint / Mgmt: −$706
• Net cashflow: $-801/mo
• Annual: $-9,607/yr
• Cap rate: 3.89%
• Cash-on-cash: -8.60%
• DSCR: 0.62
• 1% rule: 0.84%
• Cash to close: $111,720

Investor read

• This is a 2-bed/2.0-bath condo listed at $399k.
• At list price, monthly cash flow is $-801 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $258k (35.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $336k (15.7% below list).
• It's been on market 130 days — a 12% lower offer ($351k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $258k (35.4% below list) — sets the bar for cash-flow.
• In year one you build about $14k of equity ($3k loan paydown + $11k appreciation (2.7% local appreciation)).
• 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: President Abraham Lincoln Elementary School (math 47% / reading 57%, grade C-, #46 of 183 statewide, top 29%, 357 students, 57% FRL); Robert Louis Stevenson Middle School (math 30% / reading 57%, grade D, #10 of 42 statewide, top 22%, 576 students, 43% FRL); President Theodore Roosevelt High School (math 41% / reading 73%, grade C, #3 of 43 statewide, top 7%, 1,433 students, 39% FRL).
• Watch-outs: HOA is 32% of rent.
• Market conditions: Rents rising fast (+5.3%/yr); 180 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 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; this cycle's ask has dropped $39k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $284k; 40% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 3, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 3.9% 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.
• This rent runs 42% of the median local income ($96k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 130 days. Have you received any prior offers? Is the seller open to a 35% 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?