509 University Ave #205

Urban Honolulu, HI 96826

$299,000D

1 bd · 1.0 ba · 551 sqft · Built 1961 · Condo · Active · 514 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,799/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$346
• HOA: −$1,078
• Vac / Maint / Mgmt: −$588
• Net cashflow: $-780/mo
• Annual: $-9,362/yr
• Cap rate: 3.66%
• Cash-on-cash: -9.39%
• DSCR: 0.58
• 1% rule: 0.94%
• Cash to close: $83,720

Investor read

• This is a 1-bed/1.0-bath condo listed at $299k.
• At list price, monthly cash flow is $-780 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $161k (46.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $280k (6.4% below list).
• It's been on market 514 days — a 12% lower offer ($263k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $161k (46.1% 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: Ala Wai Elementary School (math 22% / reading 37%, grade F, #122 of 183 statewide, top 71%, 356 students, 59% 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 60% FRL vs 39% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $125/mo; HOA is 39% 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.
• 2 sale attempts since 29y ago; this cycle's ask has dropped $76k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $85k; list at $299k implies a 252% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone A (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.7% 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 $2,799/mo this rent would consume 49% 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 514 days. Have you received any prior offers? Is the seller open to a 46% concession, seller financing, or rate buy-down credit?
• Built in 1961 — 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.