On Oahu, the biggest risk in a flip is often not the budget. It is the calendar. Permit waits, shipped-in materials and a thin pool of contractors stretch timelines, and every extra month costs real money on a million-dollar house.
In short: LendingStreet funds fix and flip loans on 1-8 unit investment property across Honolulu and Oahu, from $150,000 to $5M+. Programs go up to 90% of cost and up to 100% of the rehab budget on some programs, with interest-only payments and closings in as little as 10 days. Rehab money is released in draws as work is completed, and you exit by selling or refinancing into a DSCR loan.
Most Honolulu flips are older single-family homes in established neighborhoods: plantation-era and post-war houses in Kaimuki, Kapahulu, Palolo, Kalihi, Aiea and Pearl City, and 1960s and 1970s homes in Hawaii Kai, Kaneohe and Kailua. Buyers pay a premium for move-in condition on an island where renovating is slow and expensive, which is what creates the margin.
Condo flips happen too, but AOAO renovation rules, contractor scheduling in shared buildings and the building's own financial health add risk.
Oahu buyers tend to value updated kitchens and baths, cooling such as split-system air conditioning, photovoltaic panels and a clean permit history. A flip that adds those, and documents every permitted item, is easier to sell and easier for the buyer's lender to finance.
Many older Honolulu houses use single-wall construction, where the exterior boards are the wall, with no studs or insulation in the usual sense. Bringing them up to current standards for electrical and plumbing can mean more work than a mainland rehab of the same size. Termite damage is common, and inspections often reveal old additions done without permits.
Building permits through the city's Department of Planning and Permitting have had long wait times in recent years, and the city has added third-party review and other changes to speed them up. Cosmetic work like flooring, paint and cabinets usually does not need a permit, but electrical, plumbing and structural changes do.
Many Oahu flippers design their scope around this, keeping the layout as it is and focusing on finishes, or buying homes where earlier work was already permitted. If your plan needs a permit, get a realistic estimate of the wait before you buy and build it into your loan term.
This example is illustrative and not a quote. An investor buys a dated Kaimuki house for $950,000 with a $180,000 rehab budget and an after-repair value of $1,350,000. The loan covers 85% of the purchase and 100% of the rehab, for $987,500, about 87% of total cost.
If the project takes nine months, estimated interest-only payments, assuming the full balance is outstanding, total about $77,766. Add taxes and insurance, purchase closing costs of $12,000 and selling costs of about 6%, and the estimated profit is about $43,234. If a permit wait pushes the project to 13 months, interest rises to about $112,328 and profit drops to about $5,972.
The lesson from the table is that time, not the rehab budget, is often the biggest swing factor on an Oahu flip. Plan the permit path before you close, and keep enough reserves to carry the property if the timeline runs long.
| Item | 9-month project | 13-month project |
|---|---|---|
| Loan amount | $987,500 | $987,500 |
| Estimated interest | $77,766 | $112,328 |
| Taxes and insurance during project | $6,000 | $8,700 |
| Purchase closing and selling costs | $93,000 | $93,000 |
| Sale price | $1,350,000 | $1,350,000 |
| Estimated profit | $43,234 | $5,972 |
Nearly all building materials arrive by ship, so lead times on cabinets, windows and specialty items can run longer than on the mainland, and prices are higher. Order long-lead items early. Licensed contractors are in demand, so check licenses with the state and get firm schedules in writing.
Include freight and longer delivery times in the budget and the schedule. A realistic plan is more valuable to your profit than an optimistic one.
The purchase funds at closing, and rehab money is held back and released in draws after an inspector confirms each stage. You or your contractor pay for each stage first and are reimbursed, so keep working capital for the first round of work and deposits on materials.
Ask for draw inspections to be scheduled as soon as each stage is finished. On an island where trades are booked weeks out, a slow draw can idle the next crew, so clean invoices, photos and lien releases from each subcontractor help keep money and work moving.
Hawaii closings run through escrow companies. Sellers typically pay the state conveyance tax, which rises with the sale price, along with commissions and their share of escrow fees. Include the conveyance tax at your expected sale price in your profit estimate, since it is larger on higher-priced homes.
If the sale market softens, a finished flip can become a rental and be refinanced into a DSCR loan. On Oahu, the rent often supports a smaller loan than the flip loan, so plan to bring cash or keep the rental option for homes with an ohana unit or strong rent.
Because Oahu rents are low relative to prices, holding works best when the house has a permitted ohana or a second legal unit, or when you have the cash to pay the balance down to what the rent supports.
Send the address, purchase price, scope of work, permit plan and after-repair value through the form below, or call (877) 298-1001. Our investor loans are business-purpose loans on non-owner-occupied property. We will size the loan and talk through the timeline.
Up to 90% of cost and up to 100% of the rehab budget on some programs, also measured against the after-repair value.
In as little as 10 days with a complete file and clear title.
It affects your costs and loan term. Plan a term long enough to cover a realistic permit wait.
Yes. Flip loans use a valuation that includes the after-repair value.
Yes, if the building and unit are eligible. Check AOAO renovation rules and the building's finances first.
Often yes, if your plan addresses the unpermitted work and the exit accounts for it. Tell us up front.
Yes. A DSCR loan can refinance it once it is leased, though the loan may be smaller than the flip loan.
No. These are business-purpose loans on non-owner-occupied property.
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