927 Prospect St #406

Urban Honolulu, HI 96822

$399,900D-

2 bd · 2.0 ba · 868 sqft · Built 1971 · Condo · Active · 121 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,272/mo
• Mortgage (P&I): −$2,097
• Tax + insurance: −$666
• HOA: −$984
• Vac / Maint / Mgmt: −$687
• Net cashflow: $-1,162/mo
• Annual: $-13,948/yr
• Cap rate: 2.80%
• Cash-on-cash: -12.46%
• DSCR: 0.45
• 1% rule: 0.82%
• Cash to close: $111,972

Investor read

• This is a 2-bed/2.0-bath condo listed at $400k.
• At list price, monthly cash flow is $-1k ($-14k/yr) — negative.
• To cash-flow at today's rent, offer at most $232k (42.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $327k (18.2% below list).
• It's been on market 121 days — a 12% lower offer ($352k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $232k (42.1% 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.
• Watch-outs: HOA is 30% of rent.
• Market conditions: Rents rising fast (+5.3%/yr); 182 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 21d 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.
• 2 sale attempts 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 $43k; list at $400k implies a 833% gain — meaningful room to come down on a strong offer.
• 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 2.8% 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 41% 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 121 days. Have you received any prior offers? Is the seller open to a 42% concession, seller financing, or rate buy-down credit?
• Built in 1971 — 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?