I did it. Here’s what I did. In 1999, I was WAAAY upside down on a condo that I bought in West Oahu in 1993. I paid 180,000 in 1993. By the late 90’s, the same units were selling in foreclosures for around 70,000. For those of you that do not know this, the 90’s were devastating to real-estate in Hawaii, following the Japanese investment bust/bubble.
Many of my friends and co-workers were doing short sales or going into foreclosure.
I took a different approach. I just “knew” the market had to be at the bottom. I was right. I cashed in an IRA. I had to pay taxes, but it wasn’t as bad as I thought, as my property purchases and fix up investments cancelled a lot of my tax obligations in that year.
I used the money to buy to more condos, for a total of 3 real-estate investments on Oahu. I bought another condo in West Oahu in the same complex that I owned in, for 72,000. It was a mess, but I knew an underemployed handyman that did the whole fix up for a very reasonable price. I also purchased a one bedroom apartment at the base of Diamond Head, just out side of Waikiki, for 171,000.
I did extremely well on both investments. No regrets. I hope you have similar results.
I’m following the San Diego market and the Honolulu market. Both are still to rich for my blood, though this might be the bottom. I don’t know (who does??). I’m staying put, unless things take another leg down. If I were thinking of making a purchase for my primary residence, I would likely jump in now, but that’s not the case.
