Wholesaling Code Violation Properties in Hawaii

The short answer

Can you wholesale a code violation property in Hawaii?

Yes, you can contract to buy a property with open code violations in Hawaii and assign the contract, but you must confirm the county record first and follow the broker-license limits. Hawaii has no wholesaler-specific statute that we found. Check current text and ask a Hawaii attorney how it applies.

A violation can be a lot of things: an unpermitted addition, a rental unit that should not exist, an overgrown yard, an unsafe stair or a fence in the wrong place. In Honolulu, the notice comes from the city, and each county in Hawaii runs its own process. Always ask the owner for the paperwork before you write a number. Our code violation leads guide explains common types.

Your job is to learn what the county will require. Call or visit the permitting office, ask whether fines are accruing and ask what it takes to close the file. Our certificate of occupancy guide shows why final approval can matter to buyers and lenders.

The opportunity

Why code violations create deals in Honolulu

Honolulu has older houses in Kalihi, Kaimuki and Pearl City, and many have additions or rental units that were built without a permit. Owners who get a notice may face plans, inspections and fines they did not expect. Some would sooner sell than fund the work. If you can estimate the cure and show a buyer a realistic path, you can price the deal fairly, using the MAO calculator to protect your margin.

Lead sources

Where to find code violation leads in Honolulu

• County records. Ask the city about public notices and complaint files, and check what is searchable online. Our code violation leads guide lists approaches.
• Neighbors and drivers. Peeling paint, junk and unsafe structures stand out. See driving for dollars.
• Tax and mortgage trouble. Owners with violations are often behind elsewhere. Read pre-foreclosure and tax leads.
• Landlords. Rental owners who received a notice after a tenant complaint may want out.
• Contractors and permit expediters. They hear about stalled projects first.

Your exit

Who buys code violation properties on Oahu

Rehabbers and small builders who understand plans and permits buy these homes, because they can cure the issue and build value. Some owner-occupants will also buy if the work is clear and the price reflects it.

Give buyers copies of every notice, any permit history and your estimate of the fix. A buyer should know whether fines are accruing before closing. Use the due diligence guide as a checklist when you assemble the package.

Step by step

How to start wholesaling code violation properties in Hawaii

1. Collect the notice. Ask for every letter, citation and inspector contact.
2. Check the record. Confirm with the county what is open, what is fined and what is required.
3. Price the cure. Use our repair cost guide, add permit fees and plan costs, and test value with the ARV calculator.
4. Make the offer. Use the MAO calculator and cover fines that may accrue before closing.
5. Write protections. Include a due diligence period, following the wholesale offer guide.
6. Disclose everything. Share each notice with your buyer in writing.
7. Close with title. Use an investor-friendly title company and ask how open liens or fines will be handled.

This is a worked example, not market data. A retired Honolulu owner in Kalihi received a notice about an unpermitted second unit that a previous owner had built behind the house. Rent had dried up and the owner did not want to face the city.

You verified the open file with the county, agreed to $690,000 and wrote a 30-day due diligence period. A contractor said that removing the unit and permitting the repairs would cost about $58,000, and $4,500 in fines needed to be settled.

A local builder paid a $14,000 assignment fee, took over the file and closed in about six weeks. The seller left with cash and no more letters, and your buyer got every notice before signing.

Hawaii rules to know

Broker rules, taxes and related mortgage rules

HRS 467-7 says that nobody within the chapter may act as, advertise as or assume to act as a broker or salesperson without a license. If you market a code violation property to buyers, ask a Hawaii attorney whether your plan fits the broker definition in HRS 467-1. We found no wholesaler-specific statute, so check current text and the Real Estate Commission.

Owners with violations may also have a mortgage problem. Hawaii allows judicial and nonjudicial foreclosure under HRS chapter 667, and a power-of-sale notice must set a cure deadline of at least 60 days. At closing, the seller generally pays the conveyance tax under chapter 247. Read our transfer tax guide and ask your title company for the current figure.

Learn it with a mentor

Price the cure with confidence

Violation deals reward people who call the county and read the file. Mentorship students bring us notices and we help them decide whether the numbers work.

FAQ

Code Violation Properties in Hawaii: common questions

Keep going

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