Oahu’s housing is expensive and much of it is old, which is the combination that makes renovation pay. A dated single-wall house in Kaimuki or Kaneohe can sell for far more once it has a new kitchen, baths, roof and electrical. The financing has to cover a high purchase price, the full renovation, and a timeline that includes Honolulu’s permit process.
How the loan is sized
A fix and flip loan combines a share of the purchase price with the renovation budget, and the total is capped at a share of the after-repair value (ARV).
| Purchase price | $850,000 |
| Rehab budget | $180,000 |
| After-repair value | $1,350,000 |
| 90% of purchase | $765,000 |
| 100% of rehab | $180,000 |
| Loan | $945,000 |
| 75% of ARV ceiling | $1,012,500 |
| Cash to close, before costs | $85,000 |
The rehab money is not paid at closing. It is held back and released in draws as each stage of work is inspected and completed, so you or your contractor need enough cash to start each stage.
Plan for permit time
Work that changes structure, plumbing or electrical needs a building permit from the City’s Department of Planning and Permitting. Approval can take months for plans that need review. Cosmetic work on finishes usually does not need a permit, but most profitable flips go further than that.
- Ask your architect or contractor for a realistic permit estimate before you make an offer.
- Choose a loan term that covers the permit wait and the construction. Our flip loans run 6 to 24 months.
- Carry the monthly interest for the whole period in your numbers.
What older Oahu houses hide
- Single-wall construction. Many homes from before the 1970s have no wall cavity, which makes electrical and plumbing upgrades harder and can affect insulation and appraisal.
- Termites. Subterranean and drywood termites are common. Order a termite inspection early and budget for treatment and repairs.
- Unpermitted additions. Enclosed carports and added bedrooms are common. A buyer’s appraiser may not count them, so permit or remove them.
- Electrical and plumbing. Older panels and galvanized pipes are frequent upgrades.
The exit
Most flips end in a sale to an owner-occupant, which is why your after-repair value should come from recent sales of renovated homes nearby. If the market slows, a DSCR rental loan can replace the flip loan and turn the house into a long-term rental, with a cash-out refinance at up to 80% loan-to-value.
Common questions
With a 720+ credit score, roughly 10% of the purchase price plus closing costs and reserves to carry the loan, since we can finance up to 90% of the purchase and 100% of the rehab within 75% of the after-repair value.
No. First-time investors can qualify. Investors with 5 or more flips in the past 2 years can close without an inspection or appraisal.
No. You can pay the loan off the day you sell.
See full terms on the fix and flip loans page, or get pre-qualified.