1540 Magazine Sts Unit C/3

Urban Honolulu, HI 96822

$490,000F

3 bd · 2.0 ba · 836 sqft · Built 1986 · Condo · Active · 461 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,932/mo
• Mortgage (P&I): −$2,570
• Tax + insurance: −$346
• HOA: −$777
• Vac / Maint / Mgmt: −$826
• Net cashflow: $-586/mo
• Annual: $-7,037/yr
• Cap rate: 4.86%
• Cash-on-cash: -5.13%
• DSCR: 0.77
• 1% rule: 0.80%
• Cash to close: $137,200

Investor read

• This is a 3-bed/2.0-bath condo listed at $490k.
• At list price, monthly cash flow is $-586 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $386k (21.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $393k (19.8% below list).
• It's been on market 461 days — a 12% lower offer ($431k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $386k (21.1% below list) — sets the bar for cash-flow.
• In year one you build about $17k of equity ($3k loan paydown + $13k appreciation (2.7% local appreciation)).
• Location reads: area grade F — 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.
• Market conditions: Rents rising fast (+5.3%/yr); 177 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 24d 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.
• Current owner paid $120k; list at $490k implies a 308% gain — meaningful room to come down on a strong offer.
• By year 3, paydown + projected appreciation supports a ~$42k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 4.9% 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.
• At $3,932/mo this rent would consume 49% of the median local household income ($96k/yr) (locally 2139% 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 461 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• 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?
• 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.