Private Money Hawaii
How to Finance a Fix-and-Flip in Hawai‘i With Little Money Down
Hawaii’s real estate market offers some of the most profitable fix-and-flip opportunities in the country—but high purchase prices often discourage new investors who believe flipping requires massive cash reserves.
Good news:
You can flip homes in Hawai‘i with low down payments, and in many cases, far less cash than you think.
As a local Hawaii hard money lender, I help new and experienced flippers structure deals creatively using equity, ARV, partnerships, and private capital. This guide will break down every legitimate method to lower your out-of-pocket costs while still funding a profitable flip.
Why Fix-and-Flips in Hawai‘i Are So Profitable
Before we talk financing, it’s important to understand why Hawaii is such a strong flip market:
Limited housing inventory
Demand always outpaces supply.
Aging homes
Many Hawaii houses need renovation, creating opportunity.
High buyer demand
Local buyers, mainland buyers, and investors all compete.
Strong resale markets
Especially on O‘ahu, Maui, and Kona.
High ARVs
Renovated homes often sell well above median prices.
This creates the perfect storm for profitable flips—if you can structure your financing properly.
Myth: You Need Huge Down Payments to Flip in Hawai‘i
Reality:
Many investors flip successfully with:
- 10–20% down
- Some with under 10%
- Some with no cash using equity or partners
The key is to use the right financing strategy for your deal.
Strategy 1: Use Cross-Collateralization (Use Equity Instead of Cash)
Cross-collateralization allows you to use equity in another property as your down payment.
Instead of bringing cash to close, you pledge equity from:
- Your home
- A rental property
- Land
- A family-owned property
Example Scenario
You’re buying a flip requiring $200,000 down.
You own a condo with $300,000 equity.
Instead of cash, you use your condo as additional collateral.
Down payment becomes $0 out of pocket.
This strategy works extremely well in Hawai‘i because many families own multiple properties.
Strategy 2: Use ARV-Based Lending to Lower Your Cash Requirement
Some hard money loans in Hawaii offer:
- 85% of purchase price
- 100% of rehab
- Up to 70% of ARV
If your ARV spread is large enough, your cash-to-close can drop dramatically.
Example
- Purchase: $500,000
- Rehab: $100,000
- ARV: $850,000
Your loan structure may look like:
- 85% of purchase = $425,000
- 100% of rehab = $100,000
- Total loan = $525,000
Total project cost = $600,000
Your cash = $75,000
(Or far less if using cross-collateral.)
Strategy 3: Partner With a Capital Investor (Split Profits)
Many new flippers work with partners who provide:
- The down payment
- Rehab capital
- Closing costs
You bring:
- Deal acquisition
- Project management
- Contractor oversight
- Sale strategy
Profit splits vary:
- 50/50
- 60/40
- 70/30
This approach has launched so many Hawaii investors.
Strategy 4: Combine Private Money + Hard Money
Private money is flexible capital from:
- Friends
- Family
- Local business owners
- Small private investors
- Silent partners
Use hard money for:
- Main loan
- Rehab financing
- Fast closing
Use private money for:
- Down payment
- Reserves
- Initial repairs
- Holding costs
This hybrid structure is common in Hawai‘i and highly effective.
Strategy 5: Use Credit Lines for Rehab Costs
While not ideal for full rehabs, credit lines can reduce upfront costs.
Options include:
- Home Depot or Lowe’s accounts
- Business credit cards
- Unsecured credit lines
- Vendor financing
Tip:
Use these for cosmetic or minor repairs only.
Strategy 6: Buy Properties With Built-In Equity
You can drastically lower your down payment by finding undervalued deals:
- Off-market properties
- Distressed sellers
- Pre-foreclosures
- Homes with major cosmetic issues
- Unpermitted additions (case by case)
- Properties with outdated interiors
Lower purchase price → lower cash requirement.
Strategy 7: BRRRR Method (Buy, Rehab, Rent, Refinance, Repeat)
BRRRR is extremely effective in Hawai‘i.
Here’s how it works:
- Buy with hard money (low cash down).
- Rehab the property to increase value.
- Rent the property at market or Airbnb rates.
- Refinance into a DSCR loan (30-year fixed).
- Repeat with new capital from cash-out.
Your refinanced loan repays the hard money loan and often recovers much of your initial investment.
Strategy 8: House Hacking a Flip
House hacking isn’t just for long-term rentals. You can:
- Live in the property
- Renovate it over time
- Sell for tax-free profits (if primary residence 2+ years)
This reduces holding costs and down payment requirements.
Strategy 9: Use Hard Money on Condos or Condotels
Condos with:
- Short-term rentals
- Low reserves
- Litigation
- Hotel-like operations
Banks often decline them.
Hard money lenders can approve these quickly.
Condos are often more affordable than SFHs, reducing the down payment needed.
Strategy 10: Leverage Seller Financing + Hard Money Hybrid
Some sellers offer:
- Carryback financing
- Partial seller financing
- Contract-for-deed
Combined with hard money, this can drastically reduce cash requirements.
Example:
- Seller carries 10%
- Hard money funds 85% of purchase
- You bring 5% + rehab
Total cash could be under 10%.
What NOT to Do as a Low-Cash Flipper
Avoid:Using personal credit cards for large repairs
High risk + high cost.Underestimating construction costs
Hawaii labor and materials cost more.Taking on structural flips without a contractor
Permitting is stricter than mainland markets.Flips in slow rural areas without exit strategy
Market demand varies drastically by island.Ignoring ARV
You must know your numbers before making an offer.Real Examples of Low-Down Payment Flips in Hawai‘i
Here are true-to-life scenarios from deals I’ve funded:Example 1 — O‘ahu Condo Flip
Investor used equity from another unit (cross-collateral). Cash to close: $0Example 2 — Big Island Lava Zone Flip
ARV spread was large → down payment reduced to 12%.Example 3 — Maui Off-Market Deal
Private partner funded down payment → 50/50 profit split.Example 4 — Honolulu BRRRR Single-Family Home
Bought distressed with hard money → refinanced into DSCR → pulled out most capital. These strategies work every day across the islands.Want to flip a property in Hawaii with low cash?
Apply for a Hawaii hard money flip loan
Have a deal and want to know how little you can put down?
Request a low-down-payment analysis
Need creative financing?
Contact David Ige for custom flip solutions
Offering Rates Starts at 9%
At Private Money Hawaii, we are proud to fund commercial properties, multi-family residential, investment residential properties, fix and flip projects, land, and construction in Honolulu and across the Hawaii Islands.
Ready for a Honolulu Hard Money Loan? Fast, Flexible Financing Across Hawaii
Act Fast with a Trusted Local Partner
Secure funding in as little as 7–14 days. No bank delays—just Honolulu hard money loans designed for investors who need speed and certainty.
Tailored Loan Programs
From fix-and-flip loans in Oʻahu to bridge loans in Honolulu, DSCR rental financing, and construction loans across Hawaii, we customize terms around your project’s needs. With interest-only payment options, LTV up to 70%, and clear origination fees, you’ll have flexible funding that works for you.
Local Expertise You Can Trust
Led by veteran lender David Ige, with nearly 30 years of experience funding Hawaii investment property loans, we combine deep local insight with transparent terms to help investors succeed.
Private Money Hawaii
Address: 411 Hobron Ln #3912, Honolulu, HI 96815
Call: +1(808) 753-1204
Email: funding@privatemoneyhawaii.com