How to BRRRR in Honolulu, HI

Start with the gross math. Honolulu's typical home value is $760,355; ZORI (Zillow's rent index) sits at $2,641/mo. That's 4.17% gross annual yield. That's right at the national 4-5% baseline — workable for BRRRR, but only on disciplined underwriting and a clean refi appraisal.

Run the DSCR sanity check. Assume 75% LTV refi at 7.5% interest, 30-year, plus taxes + insurance + 8% PM + 8% vacancy/capex reserve. On these inputs your DSCR will likely come in under 1.10 in Honolulu — most lenders won't refi at that ratio without a rate-buydown or larger equity contribution. Plan to leave 25-30% in the deal instead of the textbook 0%.

Rent demand color: Honolulu rents ($2,641) sit 37% above the national median ($1,930). Above-average rent + below-average prices is the BRRRR sweet spot — that's why the gross yield is healthy.

Refi appraisal risk: Honolulu home values are flat YoY — refi appraisals should support your renovated comp on a properly scoped rehab. No softening tailwind to worry about, no appreciation tailwind to lean on.