Real estate in Hawaii is a good investment, generally. We didn't take any real hit in 2008. The only time prices have gone down in the last 30 years was after the Japanese crash in the 90s. Unless there is some issue with the home (or if it is in a flood zone and/or on the ocean, with rising sea levels) it is worth holding onto. My best friend is a realtor, owns a bunch of properties and her company also manages rental properties (I sooooooo wish I could introduce her to you because she would take care of you in a heartbeat, but I think we are on different islands). Inventory is very very low and prices continue to go up.
Now the rental market is a different story right now, with the economy where it is both for unemployment and the tourism market... but if you have a renter in your rental unit who has been making payments thus far and didn't need to tap into the rental assistance program with the state, you're probably fine. When tourism comes back, though, I'd definitely look into Airbnb for either the smaller place or if you need more income, moving into the smaller unit and either looking for a long-term renter or Airbnb-ing the larger home. My friend has done this and while she was sad about it at first, she made her little place SUPER cute, she still has access to the yard etc., and her rental income basically covers the mortgage.
If you were open to sharing your #s, when you bought, what you bought it for, what you currently owe on your mortgage, and even the Zillow estimate of the current value, that would help... but I'd be floored if you hadn't been building significant equity. We bought our house in 2012 for $800k. It had been purchased in 2010 for $600k. When I went through comps in my D prep, I'm estimating $1.3 - $1.4m. that does include improvements, but Zillow thinks it is worth $1.1m without any improvements. People that I know that rent out their small units (this is very common here) are generally getting 1/3+ of their total mortgage covered with the rent... and as I mentioned, my friend that rents out the main home has her whole mortgage covered with that rent.
I think you can do it... at least, I wouldn't give up until you really crunch the numbers. I also really think you can lowball him and he'd consider it.
Hang in there.
M
Me (46) H (42) M:14 T:18, D9 & D11 4/19 - 12/19: series of escalating BDs 9/20 - present: R and piecing
