We buy property / Oahu
What started as a simple bike ride and a casual glance at real estate brochures in Kailua soon evolved into an unexpected investment journey. From navigating steep prices and avoiding debt to finally closing a cash deal on a high-rise apartment, this is the story of how a spontaneous idea turned us into property owners in Hawaii.
Home / Stories
CHAPTER I
When we go shopping in Hawaii and come out of the store, there are sometimes boxes filled with brochures for various things. Sometimes they are newspapers for car sales, food, or real estate magazines.
Since the beach stretching from Kailua Beach to Lanikai is very long, and we were staying right in the middle of Kailua Beach, we were far away from the public beach.
While the public beach was crowded and I was out windsurfing, Mischko lay completely alone, at least a kilometer away from the tourists. Because the locals were working and didn’t have time to swim, we were usually the only beachgoers until at least four in the afternoon. When the first people got home from work, they started arriving around half-past four. Because the houses were so widely scattered, barely any beachgoers came near us.
Besides, the locals rarely came to the beach—at least not the ones who owned houses there. They had to work hard all day to earn money.
While I was out in the waves windsurfing, my wife lay there flipping through brochures and reading. But she wasn’t alone. A large, furry, brown-and-white dog kept her company every day. His owners were probably not home all day. Because he was bored at home, he looked for company and came to Mischko every day, lying down next to her and sleeping. When he got thirsty, he would run back across his large yard, where he probably had his food, too. Once he was full, he would return and make sure no one sat down next to Mischko.
While I was out on the water, I kept an eye out to make sure no one bothered her. Several times, I saw guys sitting down next to her. I immediately surfed closer to the shore to ensure she was safe. Even though all my windsurfing gear was lying right next to her, guys would still sit down and hit on her.
I have no words for people who just sit down and hit on a woman even though they know her husband is out there.
One day, I came back to take a break, and Mischko showed me some real estate listings in the newspaper. I looked at the prices and told her she shouldn’t show me things like that again, because I couldn’t afford million-dollar properties.
“If you find something for thirty thousand, then you can gladly show me, because we only have ninety thousand US dollars in cash in our account,” I told her.
She often got on my nerves showing me expensive things. I asked her again not to show me stuff like that, but as long as she enjoyed looking at it, it was fine by me.
Then one day I came out of the water, and she said, “I actually found something for you. Right in your price range.”
I looked at it. True enough. A two-bedroom apartment for 27K.
When we went to look at the location, we realized it was far in the northwest, somewhere deep in the jungle among the poorer native Hawaiians. I didn’t think either of us would feel comfortable living among the poorer locals, and besides, I thought we would be the first victims if the locals decided to rob someone.
That’s why I told her that the next time she wanted to show me any real estate, it had to be here in Kailua or near this beautiful beach—the most beautiful beach on all the Hawaiian islands.
Eventually, we wanted to do something different, so we went for a bike ride. It was the year 1996. We rode from Kailua, over the mountain toward Kaneohe.
From our place on Kaimalino Street, the route was pleasant to ride. We easily navigated the few curves between the properties until we reached the main road. Every property had a few palm trees and the Hawaiian trees used to make leis. The trees in Hawaii whose blossoms are used for the traditional flower necklaces are called Plumeria (often also called Frangipani). In Hawaiian, these trees and their flowers are called Melia.
Because of their intense colors (ranging from white to yellow to pink) and their intoxicating scent, these flowers are the absolute top choice for the famous flower wreaths known in Hawaii as leis.
When we turned left onto the main road, we stayed on the bike path. The scent of Plumeria followed us the entire time, even as we passed the Safeway on our right.
We could smell it everywhere. It was that pleasant tropical air. After we passed Safeway, a few houses appeared on the left side where poorer Hawaiians lived. But the area where we had found our accommodation was rather upscale.
Here, too, no matter where we rode, Plumeria trees were planted everywhere. The trees constantly changed colors. When you look at a tree like that in January or February and think of Germany, it’s quite a contrast. To me, these trees looked like giant monster bouquets of flowers.
After leaving Kaimalino Street and riding along the main road for about two kilometers on a flat stretch, we had to ride our bikes up the mountain.
I admired Mischko for how she managed the climb up the mountain on her women’s bike. She was tireless. Just like me, she groaned because the air was simply too warm for us Europeans.
When we reached the top of the mountain, the street signs pointed to the highway exit toward Honolulu. This newly built highway was also the one you took if you wanted to drive across the island toward Pearl Harbor.
What we didn’t know was that this road was still under construction that year. They had drilled a massive tunnel through the mountain so that cars heading west wouldn’t always have to drive through Honolulu.
Up here on the mountain, we took a water break. After the break, things got easier for us. While the Kamehameha Highway veered to the left, we rode straight ahead, down the mountain, and arrived in Kaneohe about twenty minutes later.
Since we weren’t experienced cyclists, the route took us forty minutes including the break, even though it was barely six miles. Once we reached the bottom, another mountain appeared. We had to go up again. Once more, I admired my wife for how she tackled the hills on her women’s bike. Another incline, and even though she wasn’t as trained as I was, she was unstoppable.
CHAPTER II
Because we were hungry, we made a quick stop at Taco Bell. Afterward, we continued straight ahead on the road leading toward the North Shore, through what you could call the wilderness. Before we reached the wilderness, we came across a massive parking lot with countless spaces, indicating a mall—a shopping center, something we didn’t really have in Germany at the time.
Because Germans were watching the Americans to see how their economy boomed, they were constantly adopting their concepts. We had noticed this since we started flying to Hawaii at least twice a year and to the mainland USA once a year for the past six years.
When we turned left off our bike path and passed some bushes acting as a fence, we were already in the parking lot of the Kaneohe Mall. We locked our bikes outside and just wanted to stroll around.
As we walked past a small kiosk-like building in the middle of the mall, we saw a real estate office with some brochures displayed outside. We looked at each other. Suddenly, an Asian woman named Donna approached us. She kept talking until she convinced us to look at something we found very interesting: a three-room apartment right here in Kaneohe.
The next day, we returned on our bikes. The street was called Kahuhipa Street.
When we arrived at the four-story building, we had to enter through a gate that required a code to get onto the property. It was monitored by cameras. We went up to the first floor. On that floor, there were at least ten doors lined up along the length of the hallway, each one an apartment.
When we stepped into one of these apartments, it had a large room and a bathroom downstairs. Upstairs were two more rooms, and both the upstairs and downstairs had a balcony. That was what made this apartment stand out: two balconies in a three-room apartment across two floors.
We went back with the realtor, and she really wanted to close a deal. We only had ninety thousand US dollars in our account. The apartment cost 156K.
We told the realtor we couldn’t pay that much. She said we could negotiate and made an offer of 125K. We could only have afforded that if we got a loan from a bank in Berlin. We did the math, and we would have had to go into debt.
The next day, we went back to the realtor. She said the seller had dropped the price to 149K. We told her we couldn’t pay any more. She suggested we make another offer, but we had no chance because we had calculated that we couldn’t get any more credit in Germany. When the realtor saw that we weren’t going to bite, she angrily tore up the contract, and we said our goodbyes.
We returned home. Tom, the husband of Lucinda where we were staying, saw us coming back and asked, “Did you buy the apartment yet?”
We said, “No. It’s too expensive for us.”
Tom said, “Don’t worry about it. The prices are going to drop.”
When we visited our friend in Honolulu, who is a state prosecutor for taxes, she explained the process. When people don’t pay their taxes, she prosecutes them, and if they can’t pay, the property goes to the state. The state sells it and keeps the taxes owed and the court costs.
Because she was a prosecutor, she looked at the address and told us that the apartment we had looked at was actually only worth exactly what the seller was asking when he lowered the price: 149K.
We spent the rest of our vacation and headed back to Germany in 1996.
In 1997, we had absolutely no interest in real estate because we were just glad we hadn’t gone into debt.
Since we had stayed with Nancy the year before, we wanted to visit her husband while he was playing ice hockey. We showed up unannounced. We wanted to surprise him. He was married to Nancy and had three children.
When we got to the ice rink, they had already started playing. We sat up high, wanting to surprise him. When he was on a break and sitting down, we were about to head down, but suddenly a woman sat down next to him and kissed him. We were astonished that a married man with three adult children was kissing a strange woman.
We stayed up high, unnoticed. When we got home a few evenings later, Nancy would normally be sitting there waiting for us so she could chat with us for a bit. But that evening, she wasn’t there. We went upstairs and heard someone crying. We went in, and she told us that Ed was leaving her.
So, we spent that vacation in sadness. The following year, in 1998, we wanted to visit Nancy—she had moved to Oregon, and their house had been sold.
CHAPTER III
We called Lucinda, where we had stayed before. She recommended a house to us. We paid a deposit of one hundred and fifty dollars.
When we arrived from Germany, we weren’t happy with the reservation. It was somewhere right on the main road.
So the next day, we went looking on our own and found a house with Jean and Matthew right in the middle of Kailua Beach. We paid $2,700 for six weeks.
While we were staying there, we wanted to see what was happening on the real estate market. When we looked at the prices in 1998, the apartment that the seller had tried to sell us was still unsold and listed for 79K. Two years earlier, he had wanted 149K.
Now he had a huge problem. And if he sold the apartment at that price, he would likely be heavily in debt.
We thought, Now we might actually be able to buy something for our money. Back then, ninety thousand was all we had, and we would have gone into debt.
Mischko called the realtor we had dealt with two years prior, Donna. But she was only doing new builds now. She gave us another phone number. Mischko called a woman named Myra. She offered to pick us up in her car and show us some apartments.
After spending the whole day with her and looking at four apartments, we were unsatisfied with all of them because they were simply all wooden houses. Since we lived on the third floor in Berlin and had wooden floorboards above us, we knew exactly how loud it could be when just kids were playing upstairs.
As we drove south from Mililani on the H2 highway, I was sitting in the back while Myra and Mischko were in the front, observing the whole area. Everything was green wherever we drove, on both sides of the highway. Suddenly, I saw two high-rises, looking like the Twin Towers in New York that the terrorists would destroy with planes in 2001.
In that exact moment, I thought, Oh, it would be nice to buy an apartment here. On a high floor, I’d feel like I was in an airplane every day.
I must have thought out loud because Myra said to me, “I thought you didn’t like concrete blocks.”
I said, “That’s true. I don’t like the ones in Honolulu. But these two are isolated. If I bought an apartment here, no one could look into my window. In Honolulu, anyone can look into your window without binoculars.”
She promised to look into it the next day. And sure enough, the next day Myra called, and we set an appointment for the day after. She would pick us up because we didn’t have a car. She picked us up right on time and drove the new road through the tunnel. We were quickly on the other side, coming out near Pearl Harbor, and continued to Pearl City.
After checking in with security, she took us upstairs. First, she showed us an apartment on the 37th floor. It was a 36-square-meter studio. We liked the apartment and would have bought it immediately for the price. Unfortunately, Myra told us that the apartment had to be offered to Americans first. If no Americans bought it, then foreigners were allowed to buy it. It was beautiful—new blue carpet, freshly painted, lacking nothing. In America, the kitchen is always included.
Myra then took us down the elevator to the 31st floor. We went in. It was like night and day. While the first apartment was renovated, this one was in desperate need of renovation.
Since I already knew what the apartment and bathroom layout was like, I stayed back by the entrance. Mischko went into the bathroom. She came out with a dark expression on her face and said, “Absolutely not.”
The apartment cost 56K. The realtor could already see that this was going nowhere. Disappointed, she drove us back and said she would keep looking for us. She drove us back across the island to Kailua on the new road.
When we got back, we went straight to the beach, which was only about fifty meters from us. We were sitting on the lounge chairs talking. I said to Mischko, “Look at this. We’re paying Jean and Matthew $2,700 here for just six weeks. Owning that apartment would cost us a total of $1,750 a year, and we could invite our friends. They could sleep there for free, too.”
We talked for forty-five minutes. Once Mischko realized that having our own place wouldn’t be a bad idea—since we had been coming to Hawaii twice a year for years—we agreed. We got up, and she called Myra again. Myra said she would come the next day with the contract offer.
We met her at McDonald’s. Our friend Don, Nancy’s son, was there too because he lived in Kaneohe. The four of us sat at the table. I didn’t understand a word. Almost twenty pages had to be filled out. Mischko translated for me. Whenever Mischko didn’t understand something, the realtor explained it.
After almost two hours, we were done. The realtor was nice and told us we could also negotiate. We didn’t know what she meant by that. She said we could go down to 47K. We were glad she told us, and she put that amount in the contract. The contract stated that we were paying cash—buying property outright, whereas they usually take out loans.
We said goodbye to her. She told us she would call us. We had barely gotten home when the phone rang. It was Myra, saying the seller had accepted the price of 47K. Thanks to Myra, we had saved nine thousand dollars. She could have been mean and not told us we could negotiate. If she had sold the apartment for nine thousand more, her commission would have been larger. But she just thought of us.
Then we had to go back to McDonald’s. When we met with her, we discussed how we would pay. We said, “It might take six weeks. We have to go back to Berlin first. By the time we transfer the money, it will probably take at least six weeks.”
She said that wouldn’t be a problem. That same evening, we called our bank in Germany. They said they were an international bank and could transfer the money immediately. We, just like the realtor, were pleasantly surprised.
The very next day, we went straight to Honolulu to the notary. When we walked in, I noticed a very beautiful Asian woman, Chinese. Long red fingernails, long hair, dressed in a very tight red outfit. A truly elegant person, as is fitting for a notary. We sat across from her. What caught my eye was that she was cross-eyed. We never knew if she was looking at us or at the paper where she was stamping and signing.
When she finished, she told us she had never completed a sale so quickly because we were the first buyers ever to pay in cash.
Now that we had the apartment, which was in need of renovation… Technically, you’re only allowed into the apartment once the money is in the account. But Myra asked the notary if we could go in because we wanted to fix it up so it wouldn’t look so bad. We wanted to make the apartment livable.
CHAPTER IV
When we got the keys, Myra asked us why we didn’t rent the apartment out while we were in Berlin. When we wanted to come, we would just have to tell the tenant in advance, and they would have to leave.
Since the rules are different than in Berlin, we told Myra, “It wouldn’t be a bad idea to rent the apartment out.” Now, for the next fourteen days, we would be driving from one side of the island to the other every day to work, using Jean’s car. They had two cars.
They were surprised themselves. When we told them we had bought an apartment, I could see on their faces that they weren’t entirely happy about it because they were losing customers. We were their guests. But the house was right in the middle of Kailua Beach; I figured they’d have no problem renting out their rooms.
We were lucky that Home Depot was right across the street. Whenever we needed something, we just drove across the road. While we were working, we would go downstairs to swim in the pool, then go back up.
While swimming, we met the first security guard, Leon, a true native Hawaiian. He was very nice. When we arrived, he was scattering the white flowers used for leis around the pool.
We worked for a solid fourteen days. Even while we were still renovating and hadn’t finished, an agent from West Oahu Realty showed up. Myra had sent him to us. His name was Sam, a big, heavy Hawaiian guy, just like they tend to be.
He wanted to sign a contract with us so he could rent out the apartment. He asked how much we wanted for it. I said $450. He said, “Absolutely not. That’s too little.” He told me, “Adam, I see you have a Hawaiian heart, but we are going to rent the apartment for $550.”
With that, Sam said goodbye, and we continued working.
When we were finished, our friend from Waimanalo stopped by. He is Californian and a gardener. We told him he could take our ladder and all the materials we hadn’t used. He showed up right on time.
Because we had a rental car—after Glen took off with his girlfriend and we said our goodbyes—we drove back to our place, packed our things, and had to head to Donna and Don’s in Kaneohe. Because Myra the realtor wanted to say goodbye to us, she drove all the way from the other side of the island just to see us off. After all, she had sold us the apartment, earned her commission, and was hoping for our next purchase or a recommendation to acquaintances or friends. When Myra arrived, her husband Joey was with her.
On the day we were supposed to fly out, since Myra wanted to meet up to say goodbye, we decided to buy her a thank-you gift.
Because we had a mall right across from where we bought the apartment, Mischko and I went to a huge art gallery store. They sold the most beautiful pictures there. Since it had been Myra’s idea to offer the seller nine thousand less, we had saved nine thousand on the purchase.
That’s why we bought her a three-piece painting of sharks. It was elegantly and beautifully wrapped, like a proper gift. Its value was around six hundred dollars.
When Myra arrived, this time she wasn’t alone. Her husband introduced himself as Joey. Very talkative. He entertained us for quite a while. Unfortunately, we didn’t have much time for these two lovely Filipinos. We had to get to Donna and Don’s immediately. Joey and Myra had just arrived and just wanted to say goodbye. Before we parted ways, I had to run back to our room. We surprised them with the painting outside on the unpaved little street under the small streetlamp. They were so touched that tears came to Myra’s eyes. Her husband Joey opened the painting, cheered loudly, admired it, and when he saw what a fantastic, large painting it was, he pulled out his pen. Mischko and I had to date and sign it. It was a very touching goodbye.
After they left, we gave Jean and Matthew the keys, thanked them for letting us use the car for free for fourteen days, and then headed straight to Don and Donna’s. Don is Nancy’s son—the Nancy who moved to Oregon because her husband left her and moved to Florida with his old high school girlfriend.
When we got to Kaneohe, a true fiesta was waiting for us. I have never seen a meal like that in a private home in my life. Donna’s mother is from the Philippines. Unfortunately, we were already quite late and apologized to her mother. We barely ate anything, but we simply had to leave because the airline required us to be at the airport with our luggage three hours before the flight at that time.
We felt so bad, but we said our goodbyes. On the way to the airport, we mourned the missed meal, still hungry.
At the airport, we dropped off our luggage, and after getting through the first security check, we went to McDonald’s and got some food. How stupid, but we simply had to follow the airline’s rules. We felt so sorry for Donna’s mother; she had cooked for us all day.
Once we were on the plane, we agreed. It wasn’t a mistake to buy the apartment. Not only that, but unexpectedly, we had rented the apartment out immediately. We had bought the apartment for ourselves so we wouldn’t have to pay Jean and Matthew $2,700.
But because we had rented the apartment out, we ended up staying with Jean and Matthew because the tenant was paying for our stay. So, we got to stay right on the beach at Kailua Beach while owning an apartment. That apartment we bought, we didn’t lay eyes on it for a single day for the next eleven years.