Oahu Tear-downs

This post is about Tear-downs. In real estate a tear down typically refers to a residence or structure on a property which was not properly kept. It's nearly Halloween and when you think of a haunted house, you have a pretty good idea of what a tear-down is. Due to gentrification and rising land value older and smaller structures can be demolished and replaced with larger more profitable buildings.

Tear-downs come in many variations. The ones in the worst condition are literally demolished and hauled away to a landfill in their entirety. In these cases, an appraisal will typically come in equivalent to land value minus the cost of demolition.

For example if the tax assessed land value of a property is $300k and cost of demolition is approximately $10k you can expect the valuation to come in at approximately $290k. Essentially the owner would be paying the buyer $10k to take the headache off their hands. Of course there are other factors but it's arcane and better left to professionals.

It is possible for developers to make a profit in situations where the cost of new construction, demolition, and land is less than the sale price on a new home comparable to equivalent neighboring properties. Here in Hawaii due to higher labor costs this task can be difficult and making a profit is not always guaranteed.

If you're interested in the process of development or flipping homes you can leave a comment :) 

Comments

  1. UnknownOctober 28, 2018 at 3:57 PM

    Great read! I have always dreamed of buying a tear down and reconstructing my own house. Seems to make sense in Hawaii considering real estate prices are so high. However, it takes lots of capital, time, and skill. Keep up the good work!

    ReplyDelete
  2. UnknownOctober 28, 2018 at 10:42 PM

    I'm not interested in flipping homes but definitely interested in buying! Speaking of tear downs, it would be awesome to find a tear down for 300k! A girl can dream right! I'm trying to convince my grandmother to sell me her house, which is a tear down but she knows she can get 900K for it as is! People are crazy to pay that price just to tear it down and rebuild! I wish I had that kind of money!

    ReplyDelete
    Replies
    1. UnknownOctober 31, 2018 at 5:43 PM

      Hey Victoria,

      I actually just put in an offer for a teardown. 250k offer on a 5,600 SQ/FT lot. If you are curious about homes priced below 300k I could answer your questions.

      Delete

Post a Comment

Popular posts from this blog

Discussing North Korea:   After watching the video, what are your thoughts about how North Korea is run as a country?  We obviously think they may be a little "crazy," however, they think we are equally as crazy.  Let's stop and think for a minute- what if we are the "crazy" ones?  Additionally, how does this add to the discussion about intercultural communication?  We are certainly the crazy ones. Here in America we are allowed so much freedom. We don't have government handlers and we have many organizations dedicated to workplace safety. We have civil rights and the freedom of speech. Here in America nearly anyone can receive a driver's license and throttle a 10,000 pound truck down a highway at 100 miles an hour. Here in America a person can enter false information and receive multiple credit cards with six digit credit limits. He can  use those same credit cards to purchase firearms and ammunition. What a person does with that deadly vehicle...
Read more

One Percent Rule

People learning about investment may come across different real estate investment terms. The one percent rule is a guideline to assess the value and potential profitability of a certain piece of property.   This rule is simple. Following the one percent rule would mean the gross monthly rent should be at least one percent of its final price. For example: $150,000 property / $1,500 monthly rent = 100 months $200,000 property / $2,000 monthly rent = 100 months $300,000 property / $3,000 monthly rent = 100 months $400,000 property / $4,000 monthly rent = 100 months If you are an investor this would be a quick and easy way to eliminate poor investment opportunities. Of course it helps to have information on comparable properties to help with estimating monthly rent.
Read more

Akoko at Ho‘opili

Image
Akoko at Ho'opili is a D.R. Horton development. Located in Ewa Beach, the Akoko development offers  2- and 3-Bedroom townhouses.  The Affordable Flats  start at $340,000 where as Market-priced Townhomes  start at $559,000. Qualifying for affordable housing means saving $220,000. As you can see, if you know someone who can qualify for affordable housing, it is an incredible benefit. The two and three bedroom layouts are meant for family living. This development is oriented toward couples and families who have children. There are five schools and the UH West Oahu campus near to the Akoko development. The units also each include two parking spaces. For families, multiple vehicles are a necessity due to our lack of public transportation options. As you can see on this map, the entire development is dependent on the H-1 freeway. My only issue with living on the west side is traffic. If you work or go to school in town the traffic will be hell. Thankf...
Read more