First Time VA Home Buyer Finds “House Hack” Deal on O’ahu, Hawai’i

Last November, I was contacted by Embry, a service member, who was hoping to buy his first home in Hawai’i. Ideally, he wanted a single family home with at least 3 bedrooms, 2 baths, a yard and garage. His last criteria had me a bit concerned as it can be difficult to find a home in Hawai’i with a garage. But as a hobby, Embry does custom wood workings and he wanted to be able to work in his garage. I had hope I could find Embry a home that met all of his criteria. But, given his price point and that he hoped to live in Pearl City, I figured he would most likely have to acquire a “fixer” property unless we were lucky and found a “deal.”

Can Real Estate Deals Be Found in Hawaii?

Embry’s new home

Now if you know anything about real estate in Hawai’i, it’s likely that you know it is challenging to find a “deal.” It is definitely possible, but often takes significant work and luck. And it is especially difficult to find deals once a property is listed on the Multiple Listing Service (MLS).

The main reason is that there are numerous people looking for real estate deals in Hawai’i. Thus, even if a seller prices a home “low” for whatever reason, it is highly probable that the seller will receive multiple offers. And likely at least one of those offers will be above list price — sometimes significantly.

Because of this, I, and other real estate agents I know, often assume there is something wrong with a property if it looks “well priced” but has been sitting on the market for an extended period of time and/or has fallen out of escrow numerous times.

Is This a Deal or a Disaster?

Built in 1987. Original condition but well maintained.

After my initial chat with Embry, I searched all of the areas on O’ahu that he was open to owning a home in, and came up with 7 opportunities. There was another home that seemed to meet his criteria but I passed over it for several reasons. First, it had been on the market over 110 days – an excessive amount of time in the current market.   Comparing that to 23 sold comparable homes in the area that on average spent less than 14 days on the market had me concerned. The other reasons were that the seller had reduced the price six times and had fallen out of escrow twice. The home had originally been listed at $790k (not unrealistic) and had been in escrow at $760k and also at $730k.

Of the 7 opportunities I originally sent Embry, a “fixer” home that was new to the market in Pearl City caught his interest. The home had significant deferred maintenance but with that came a lot of potential. After contemplating it for a short time, Embry decided he wanted to make an offer. Ultimately though, based on his pre-approved loan amount, and that the seller quickly received multiple offers, Embry decided this was not the home for him.

So there we were – back to square one in a real estate market with low inventory and numerous buyers. I informed Embry that I’d be searching daily for new opportunities for him and would be in touch.

7th Time is a Charm

A little over a week later, I received an alert that the home with the garage that Embry and I had originally declined to tour, just had its 7th price reduction. The seller had dropped the price $15k to $695k. At this new price, it was really starting to look like a potential bargain. I contacted Embry and he agreed, and I scheduled a time for us to tour it. I also spoke to the listing agent, and he assured there were no material issues with the home. Rather, the seller has recently done some renovations.

Within minutes of entering the home, both Embry and I had a mutual understanding that we may have found his new home. But at the same time, I was baffled. “I have no idea why this is still on the market,” I told Embry. New carpet, new paint, and new shower surrounds in both bathrooms — the home was in “turn key” condition. But the truly pleasant surprise, is that the home had a large unfinished room that can potentially be turned into a separate rental unit. This was very appealing to Embry as he planned to “house hack” the home.

One of the full baths with new shower surround

Surprise! Unfinished space that was not disclosed in the listing

After touring the house, I recommended to Embry that he submit an offer quickly. With the new price, and very low inventory, I thought it was likely this home would quickly land on someone else’s radar. Embry agreed, and we sat down to decide on the terms. Despite the price reduction, initially I was going to recommend Embry submit an offer below list price. However, I learned that another party had also toured the home the same day as we did, so I thought it best Embry submit a stronger offer. Thus, after talking to his lender, Embry decided to offer $725k with the seller crediting $29k back to Embry. In less than 24 hrs we were in escrow. And from there, it was quite a smooth process. No major issues with the home inspection, no problem with the appraisal, and lender was able to fund in 30 days for a successful closing.

So congrats Embry — with a convenient location from work, a yard to garden in, a garage to foster your woodworking skills and 3 potential sources of rental income, it seems like you found yourself a pretty sweet deal. Wish you the best with it.

Interested in Custom Working Working?

Embry does sell some of his woodworkings to the public. If you are invested in seeing his work, you can contact him at: brywarren@yahoo.com

Below are some examples of his work.

Embry wrapping up a project

Have questions about living in Hawai’i or looking to acquire real estate in Hawai’i? Simply call me directly at 808 354-5772 or click here. I’m here to serve you.

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