How to Wholesale Real Estate in Hawaii (2024 Updated)

This extensive guide will help you discover many important things to start wholesaling homes in Hawaii, from information on the contracts to effective marketing techniques.

It includes advice for newbies and various resources to jumpstart your journey in wholesaling real estate in Hawaii.

Continue reading to become a Hawaii real estate wholesaler.

As a beginner real estate investor, the first thing you need to be sure of is that it is legal to wholesale real estate in Hawaii.

It’s not prohibited by law. However, it is crucial to comply with the legal requirements pertaining to real estate transactions carefully.

To ensure that your real estate wholesaling business operates legally, it is essential to comprehend the Hawaii real estate wholesaling laws and the risks of wholesaling real estate.

Using incorrect or inappropriate phrasing in the contracts when promoting them to prospective end buyers is a notable hazard in the field of real estate wholesaling.

It is important to note that the role of a wholesaler is to market solely the responsibilities and entitlements of a contract while only licensed Hawaii real estate agents or homeowners can market a property.

It is also recommended to seek assistance from the best Hawaii real estate attorneys who can review or draft a template of a purchase agreement and assignment contract for you.

To gain an in-depth knowledge of applicable Hawaii laws, take a look at the rules and regulations set by the Hawaii Department of Commerce and Consumer Affairs.

In Hawaii, two wholesaling approaches, namely contract assignment and double closing, are utilized, similar to other states.

It’s worth noting that living in Hawaii isn’t a prerequisite for engaging in house wholesaling activities.

Thanks to modern technology, you can conduct the entire real estate wholesaling process remotely. This is called virtual wholesaling, which we will discuss later.

Contract Assignment

When new investors are trying to learn how to wholesale houses in Hawaii, they usually start by familiarizing themselves with the strategy of the contract assignment. Here’s how this strategy typically works.

To get started, you must obtain a signed purchase contract from a motivated seller as if you were the actual buyer. But instead of purchasing the property yourself, you will have another person — an investor — do it.

When getting the house under contract, the agreement is supposed to be signed by both the seller and you.

In order to assign the contract to an end buyer, it’s essential that the contract includes a clause that permits you to do so.

You must have both the seller and end buyer sign an assignment contract that means that the investor becomes the buyer instead of yourself.

After having the contract assigned to them, the investor will pay you an assignment fee. As a real estate wholesaler, this will constitute your earnings.

In most cases, a refundable earnest money deposit of one or two thousand dollars is all you need to complete a wholesale deal when using this approach.

This technique allows you to avoid having to come up with the funds to purchase the property yourself.

Double Closing

To become proficient in wholesaling real estate, it’s important to not only learn the contract assignment strategy, but you should also include learning the double closing method on your real estate wholesaling checklist.

Double closing involves two separate closings: one with the seller and one with the end buyer.

As always, there are both pros and cons of real estate wholesaling when using the double closing strategy.

The primary benefit of using the double closing method is that you can keep your profits hidden from both the seller and the end buyer.

One of the drawbacks of using the double closing strategy is that if you don’t have your own funds, you’ll need to secure transactional funding to complete the transaction: you need to have the whole amount the property is sold for.

This type of funding can be obtained from one of the best Hawaii hard money lenders.

Not all title companies are knowledgeable about real estate wholesaling. To ensure the transaction is done properly and smoothly, find a wholesale-friendly title firm.

Wholesalers typically opt for the double closing strategy when their assignment fee is substantial and they don’t want the seller or end buyer to see their profits.

To master everything you need to know about wholesaling real estate, you also need to be aware of the possibility of virtual wholesaling, which we are going to discuss in the next section.

Virtual Wholesaling

If you live elsewhere, you can still engage in virtual wholesaling in Hawaii.

However, before securing your first property under contract, it’s crucial to network extensively.

Additionally, since you won’t be physically present, it’s important to have a firm grasp of the wholesaling real estate step by step before attempting to manage it from a distance.

Collaborating with Hawaii investor-friendly real estate agents could be beneficial in managing communication between yourself, the buyer, and the seller.

Before commencing with the process, you’ll want to identify two key service providers:

1. A Hawaii wholesale-friendly title company that can help you with your virtual closings.

2. A trustworthy home inspector in Hawaii or contractor who can provide you with repair cost estimates for your properties that are under contract. This information can help you analyze real estate deals. Be sure to include an inspection contingency clause in your contract that allows the contractor to access the property and give you an accurate estimate before proceeding.

Moreover, it is crucial to opt for electronic signature software like DocuSign to sign necessary documents from a distance, not only before but also during the closing.

There are various types of motivated sellers, including those who need quick cash and lack the time or money to fix the property or resolve legal issues to be able to sell it through conventional means.

If you want to be successful in Hawaii’s real estate market, it’s crucial to know how to find houses to wholesale at an attractive price to potential buyers.

These properties are owned by motivated sellers who are willing to sell at a discount.

To present you with the options of finding distressed properties, we will discuss three different methods.

#1 Buy Hawaii Distressed Seller Leads

To find motivated home sellers, buying leads is the simplest method. There are firms that focus on marketing and other techniques.

These leads include contact information and details about the homeowners’ properties.

Typically, they also include information on situations indicating their willingness to sell their property to Hawaii companies that buy houses for cash.

Some real estate wholesaling software tools also provide lead purchase features.

Some examples of the leads that these companies specialize in include absentee owners, expired MLS listings, probate homes, and pre-foreclosure homes.

To increase the chances of successfully converting leads, it’s important to choose a reputable company that has a proven track record of generating high-quality leads.

Some companies may charge a subscription fee or per lead, and the quality of leads can vary, so it’s important to do your research before signing up with a service.

If you are a real estate wholesaler, you can evaluate various lead providers by using this compilation of the best lead generation services for real estate wholesalers.

Additionally, Real Estate Bees offers a lead marketplace that offers high-quality leads for purchasing investment properties or wholesaling.

#2 Hire an Agency to Do Marketing for You

An experienced real estate investor marketing agency can assist you by providing turnkey marketing services, including wholesale real estate lead generation.

They can create a customized plan that meets your budget and then execute your campaigns while you concentrate on other aspects of your business.

By entrusting these responsibilities to a digital marketing agency, you can free up your time and energy to focus on growing your real estate investment business.

Services offered by digital marketing agencies include:

• Real estate website design
• Writing web content for your website, social media, and marketing collateral
• Real estate investor SEO
• Managing your social media profiles and advertising
• PPC ad management for real estate investors

While paid advertising can yield rapid results, optimizing your real estate website for search engines (SEO) will take longer to generate leads.

However, it can create an asset that continues to generate leads automatically with little further effort on your side.

Therefore, even though SEO works slower, it can provide a more sustainable and long-term strategy for generating leads for your real estate business.

To run various marketing campaigns, most marketing agencies will charge wholesalers a monthly retainer fee plus setup fees, depending on the service.

Just like lead providers, these companies can be unscrupulous, failing to deliver services as advertised.

If you are leaning towards hiring an agency, you have to be able to sift through an overwhelming sea of bad companies to find one that will serve you as advertised.

But since you are our reader, our team has already done all the heavy lifting for you. We’ve polled and surveyed thousands of our real estate wholesaler members and the overwhelming majority recommended Magnyfi, run by Jacob Hicks.

The service provided by Magnyfi is not cheap. But it is definitely worth it if you are serious about growing your real estate wholesaling business.

Go ahead and watch Jacob’s video presentation on the Magnyfi profile page discussing their methodical process they have been using to successfully help other investors grow their businesses.

#3 Do Your Own Marketing by Yourself

If you have a limited marketing budget, you may need to roll up your sleeves and do the work yourself.

The first essential tool you will need is a professional real estate investor website that is designed for effective motivated seller lead generation.

A website can serve as a powerful asset that can attract leads from Google search and be the destination for the ones coming from various other channels.

Currently, there are several best website templates for real estate investors available on the market that you can choose from to ensure your website is of the highest efficiency.

It is crucial to choose a website solution that is both user-friendly and optimized for search engines.

However, your marketing efforts should not be limited to online methods alone. There are several offline methods that you can use to reach out to motivated sellers, including:

• Placing bandit signs in strategic locations
• Driving for dollars to find distressed properties
• Sending real estate wholesaling postcards
• Searching through public records for potential leads
• Networking with other real estate professionals

By combining both online and offline strategies, you can increase your chances of finding more leads and expanding your real estate investment business.

To reach potential cash buyers for your wholesale properties, there are various marketing strategies for wholesaling real estate that you can use.

But to market your Hawaii wholesale properties and find real estate investors most effectively, it is essential to have or create a list of cash buyers.

To ensure that you cover all bases and reach the right cash buyers for your wholesale properties, it is crucial to understand that each type of buyer has different buying criteria.

Therefore, creating lists for each type of buyer is an effective way to target the right audience and increase the likelihood of closing a successful deal.

Cash buyers who may be interested in your properties include:

• hedge funds
• individual investors
• real estate investing companies, and other types of real estate investors

By having access to a comprehensive list of cash buyers, you can increase your chances of finding the right buyer for your wholesale properties and successfully closing deals.

Build Your Own Cash Buyers List

You can create your own list of Hawaii real estate cash buyers through networking.

By networking with various professionals, you can expand your contacts and potentially find cash buyers for your wholesale properties.

One effective way to do this is by attending various networking events and your local real estate investment association meetings.

Another way is to reach out to reputable vendors in Hawaii who cater to real estate investors, such as contractors who are hired by investors to work on flips or Hawaii lenders who specialize in lending to Hawaii real estate investors.

Building a cash buyers list doesn’t happen overnight. It’s a continuous process. Fortunately, it can be significantly sped up by Real Estate Bees’ revolutionary invention — Property Marketplace Widget for Wholesalers.

It basically allows you to build your own cash buyers list on autopilot, and it’s the only online tool of this kind on the market.

What’s even more powerful is that this tool lets you syndicate your contracted properties directly to Real Estate Bees’ massive marketplace of wholesale deals for sale in Hawaii and instantly reach thousands of potential buyers!

Leverage Other People’s Cash Buyers Lists

If you’re short on time and can’t build your own list of companies that buy houses in Hawaii, there is another option.

You can leverage the existing lists of other Hawaii real estate wholesalers and other real estate professionals who have spent years building relationships with investors.

While this approach can help you quickly establish your business, it’s worth noting that list owners may ask for up to 50% of your assignment fee.

Nonetheless, if you’re willing to pay the fee, using someone else’s cash buyers list can be a useful shortcut to finding potential buyers for your wholesale properties.

However, if you want to avoid giving away half of your profits while using someone else’s cash buyers list, you can use a robust property syndication tool developed by Real Estate Bees to help wholesalers with the disposition.

The tool lets wholesalers leverage Real Estate Bees’ extensive list of Hawaii cash home buyers to blast their contracted properties for free.

To take advantage of this cutting-edge functionality, create your free account and list your contracted properties.

Contract Assignment

If you’re involved in wholesaling houses in Hawaii, it’s important to have two contracts signed.

The first one is a contract to purchase real estate which is signed by you and the seller.

This purchase contract specifies standard details of the purchase and sale of the property. But it should include the assignment clause and allow you to back out of the deal without losing your earnest money (in case your deal with the investor falls through).

The second contract is an assignment contract which is signed by both the seller and the buyer once you find an end buyer.

When it comes time to close, the title company will need copies of both contracts.

Double Closing

Double closings are a common practice among wholesalers who prefer to keep their profit margin confidential from the seller and the end buyer.

To accomplish this, you’ll need to present two contracts to the title company in order to close the deal: a contract to purchase real estate that you’ve signed with the seller and another one that you’ve signed with the end buyer.

In addition, you may need to secure transactional funding if you don’t have enough cash on hand to cover the full price of the property.

The funding required for this purpose is usually a short-term loan that is due in 24 to 48 hours — enough to conduct the double closing.

Although wholesaling with a real estate license in Hawaii is not mandatory, having one can provide benefits for you and your business.

However, you must first join a Hawaii real estate brokerage to be allowed to use it.

It’s important to note that not all brokers are receptive to agents engaging in wholesaling or home flipping.

Therefore, it’s recommended that you interview different brokerages and choose one that doesn’t mind.

With a license, you have the option to market a property not only as a wholesaler but also as a real estate agent.

This means that if you can’t find an investor to buy your wholesale property, you can list it on the MLS, find a buyer among the general public and get your real estate agent commission from the seller instead of the assignment fee from an investor.

Refer to our guide on how to get a real estate license in Hawaii for more information on obtaining one.

To practice real estate wholesaling in Hawaii, there is no minimum age requirement.

However, in the United States, you must be at least 18 years old to enter into a legally binding contract.

As a result, title companies will not engage in any contractual agreements with individuals who are under 18.

If you are younger than 18, you can still participate in wholesaling by partnering with someone who can sign contracts on your behalf.

It’s not a requirement to have a Limited Liability Company (LLC) to legally engage in real estate wholesaling in Hawaii.

However, it is a crucial aspect of any of the real estate asset protection strategies to establish an LLC or other corporation type.

By operating under an LLC, you can enjoy tax benefits that aren’t available if you operate under your personal name.

Furthermore, being an LLC could make you eligible for business loans, which would not be possible if you were engaging in wholesaling as an individual.

This can also improve your credibility as an investor, which could help build trust with home sellers.

Establishing a business entity can enhance your professional image and increase your influence in the Hawaii real estate investment community.

Wholesaling is a popular real estate investment strategy due to its low cost, making it an attractive option for many investors as a starting point.

First of all, you will need to come up with an earnest money deposit of between $1,000 to $2,000.

If you plan to double close, you will require transactional funding unless you have cash on hand.

To obtain transactional funding in Hawaii, you do not require a good credit score or employment history since it’s a short-term loan.

You can use the “request financing” form on Real Estate Bees to find the best transactional funding.

By filling out this form, you can obtain quotes from various lenders and compare their rates easily.

The more effort you invest in wholesaling real estate in Hawaii, the higher your potential profits will be.

For example, a rundown property costing $150,000 can generate an average assignment fee ranging between $10,000 and $15,000.

However, your ability to scale your business quickly will determine the rest of the profit that you can earn.

You can get a broad overview of the market by examining the trends in the Hawaii real estate investing market.

However, to determine how favorable a market is for wholesaling real estate in Hawaii, it mainly relies on the specific city or even the neighborhood in which you intend to conduct business.

Hawaii’s real estate market is dynamic, with varying levels of demand and competition throughout the state.

Some cities and neighborhoods are more conducive to real estate wholesaling than others.

For instance, Honolulu, the state’s capital, is an excellent place for wholesaling because it is the largest city in Hawaii and has a strong economy, diverse population, and a wide range of property types.

Other cities that are good for wholesaling real estate in Hawaii include Kailua, Pearl City, and Kahului, as they offer excellent opportunities for real estate investors.

When considering where to wholesale real estate in Hawaii, investors must conduct thorough research to identify the best areas that match their investment goals and objectives.

To that end, here is a list of the top nine cities in Hawaii for wholesaling:

1. Honolulu HI
2. Hilo HI
3. Kailua HI
4. Waipahu HI
5. Kaneohe HI
6. Pearl City HI
7. Kahului HI
8. Kihei HI
9. Lahaina

However, it is important to note that the success of wholesaling real estate in these cities will depend on various factors such as the current housing market, local laws and regulations, and competition in the area.

It is always recommended to do thorough research and analysis before making any investment decisions.

Before diving into wholesaling real estate for beginners in Hawaii, it’s crucial to gain more knowledge and expertise in the field.

To do so, here are some effective methods to consider that can help you start your real estate wholesaling business quickly.

Courses

A significant number of accomplished wholesalers are enthusiastic about sharing their knowledge and assisting others in achieving financial independence.

They have a wealth of information and expertise to create comprehensive educational programs.

Despite this, there are also numerous fraudsters who aim to take advantage of inexperienced and gullible wholesalers.

If you’re looking for trustworthy courses, Real Estate Bees provides a reliable list of the best real estate wholesaling courses that are legitimate and effective.

By referring to this list, you can ensure that you are investing in reputable and valuable educational resources that can help you succeed in the industry.

Real Estate Wholesaling Mentors

Having an experienced professional oversee your work can prevent you from making expensive errors and help you maintain your focus and direction.

To receive comprehensive and personalized guidance, it’s highly recommended to hire a mentor specializing in real estate wholesaling.

To find a top-rated real estate investment mentor in Hawaii, consider consulting the list of the best Hawaii real estate investment mentors or coaches available.

By working with a mentor, you can establish a solid business plan, set practical objectives, and select effective marketing strategies that align with your goals and vision.

Books

A cost-effective and valuable method of gaining knowledge about wholesaling real estate is by reading books written by recognized experts in the field.

To discover the most informative and useful books, refer to the list of the best real estate wholesaling books provided.

Investor Clubs

In Hawaii, numerous local investor clubs are available for interested individuals seeking to learn from experienced and active members who have practical knowledge.

Joining such clubs can prove beneficial, as many established investors are enthusiastic about sharing their expertise and assisting newcomers in optimizing their businesses for profitability.

Real Estate Bees’ list of real estate investor clubs in Hawaii will help you find them quicker.

In addition, attending clubs can serve as an effective means to find cash buyers for wholesaling real estate.

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About the Author

With over 20+ years of experience in real estate investment and renovation, Brian Robbins brings extensive knowledge and innovative solutions to the HouseCashin team. Over the years Brian has been involved in over 300 transactions of income producing properties across the US. Along with his passion for real estate, Brian brings with him a deep understanding of real estate risks and financing.