Private Money Hawaii
Fix-and-Flip Loans in Hawai‘i: Funding, ARV & Fast Closings
If you’re planning to flip a home in Hawaii, whether on O‘ahu, Maui, Kaua‘i, or the Big Island, you need fast, flexible financing. Distressed homes, houses with unpermitted additions, aging plantation-style properties, and auction deals move quickly. Sellers want certainty and speed.
That’s why investors across Hawai‘i rely on fix-and-flip loans, also known as hard money flip loans or ARV loans, to buy and renovate properties quickly.
As a local Hawaii hard money lender, I help investors secure fast, common-sense financing tailored to the unique qualities of Hawaii’s micro-markets. In this guide, I’ll break down exactly how fix-and-flip loans work, how ARV (After-Repair Value) determines your loan amount, what down payment you’ll need, and how to get approved fast.
What Is a Fix-and-Flip Loan in Hawai‘i?
A fix-and-flip loan is a short-term, asset-based loan used to:
- Purchase a property
- Renovate it
- Sell it for profit
These loans are ideal for:
- Distressed homes
- Properties needing repairs
- Outdated interiors
- Termite-damaged homes
- Foreclosures and auctions
- Homes with unpermitted additions (case-by-case)
- Condos or SFHs in need of cosmetic upgrades
- Rural or older homes, banks won’t finance
Traditional lenders require perfect property condition and full income documentation. Hard money lenders don’t.
Why Fix-and-Flip Loans Are Essential in Hawai‘i
Hawaii’s market is:
- High demand
- Low inventory
- Competitive
- Fast-moving
Sellers often choose the strongest offer—not necessarily the highest price. A fast, non-contingent offer backed by local hard money can give you a critical edge.
Local lenders understand what mainland lenders don’t:
- Lava zones
- Leasehold ownership
- Condotel rules
- Ohana units
- Permit challenges
- Local contractor timelines
- Island-to-island pricing differences
That’s why using a local fix-and-flip lender is essential.
How Fix-and-Flip Loans Work (Step-by-Step)
1. Pre-Approval (Same Day)
You provide:
- Property address or TMK
- Estimated purchase price
- Photos
- Rehab budget
- Your down payment amount
- Exit strategy
I respond with terms the same day.
2. ARV (After-Repair Value) Calculation
ARV is the projected value after the renovation is complete.
Local ARV analysis includes:
- Comps within 0.25–0.5 miles
- Recent 3–6 month sales
- Island-specific market trends
- Quality of contractor bids
- Scope of renovation
- Unique Hawaii factors (views, ocean proximity, erosion zones, lava zones, etc.)
Accurate ARV is essential because it determines:
- Your loan amount
- Your renovation budget
- Your profit margin
Local ARV calculations are much more accurate than mainland models.
3. Purchase + Rehab Funding
A typical Hawaii fix-and-flip loan includes:
- 85% of purchase price
- 100% of rehab costs
- Up to 70% of ARV
Rehab funds are disbursed in draws, as work is completed.
4. Renovation Phase
Contractors complete:
- Cosmetic updates
- Structural repairs
- Plumbing/electrical upgrades
- Kitchen/bath renovations
- Permitted additions (if necessary)
Hawaii-specific upgrades like:
- Termite repairs
- Moisture barriers
- Roof replacements
- Cesspool-to-septic conversions
- Hurricane clips
It may also be required, depending on the home and island.
5. Sale or Refinance
Once the renovations are complete, investors typically:
- Sell the property for profit, or
- Refinance into a DSCR loan (BRRRR strategy)
Refinancing is common in Honolulu, Kapolei, Kihei, and Kailua-Kona—areas with strong long-term rental demand.
How ARV Impacts Your Loan Amount
Your ARV determines how much the lender can fund.
Example:
- Purchase price: $600,000
- Rehab budget: $120,000
- ARV: $900,000
Possible loan structure:
- 85% of purchase = $510,000
- 100% of rehab = $120,000
- Total loan amount = $630,000
Your down payment = purchase price – lender’s amount.
The higher the ARV spread, the lower your cash requirement.
Typical Fix-and-Flip Loan Terms in Hawai‘i
- Interest Rate: 10%–14%
- Points: 2–4 points
- Down Payment: 20%–30%
- Loan Term: 6–12 months
- Closing Time: 3–7 days
- Rehab Funding: 100% (draw-based)
Local lenders are usually more flexible on:
- Property condition
- Credit
- Income documentation
- Unique or rural properties
- Condotels
- Lava zones
Down Payment Requirements for Hawaii Flips
Most flips require 20–30% down, but there are creative ways to reduce this:
1. Cross-Collateralization
Use equity in another property as your down payment.
2. ARV-Heavy Deals
Big spreads = smaller down payments.
3. Partnerships or Private Investors
Share profits, reduce upfront cash.
4. Credit Lines for Rehab
Home Depot, business credit, etc.
5. BRRRR Strategy
Refinance after rehab to pull capital back out.
For an in-depth guide, see How to Finance a Flip in Hawaii With Little Money Down.
Why Local Fix-and-Flip Lenders Perform Better Than National Lenders
Mainland lenders struggle with Hawaii properties due to:
- Lava zones 1 & 2
- Leasehold restrictions
- Ohana units
- CPR properties
- Condotels
- Rural access
- Island-specific comps
- Permit challenges
- High construction costs
Local lenders know these markets firsthand, making underwriting faster and more accurate.
Common Types of Hawaii Properties Financed as Fix-and-Flips
- Kapahulu bungalows
- Ewa Beach single-family homes
- Pearl City plantation homes
- Waimanalo older properties
- Maui Kihei condos
- Kahului or Lahaina fixer-uppers
- Kona houses with ocean views
- Hilo split-level homes
- Puna/Pahoa lava zone properties
Many banks decline these due to the condition; hard money lenders approve them.
Tips for Successful Fix-and-Flips in Hawai‘i
Get contractor bids early
Labor shortages can delay projects.Understand permitting requirements
Counties vary widely.Budget extra for materials
Shipping delays are common.Avoid over-renovation
Keep upgrades aligned with neighborhood standards.Know your target buyer
Military, locals, retirees, or investors?Work with a local agent for ARV comps
Hawai‘i’s submarkets are hyper-local.Ready to fund your Hawaii fix-and-flip?
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.
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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.
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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