Help me decipher this condo property description... (places, affordable)

[rhbj03]

Originally Posted by rhbj03

53 Kamehameha Hwy
Hauula, HI 96717

Trying the link again:
https://www.zillow.com/homes/for_sal...75_rect/13_zm/

Link doesn't seem to point to building... And neither does the address. Don't know why; but that's what shows on the ad. See screenshot attached.

[rhbj03]

OK I think the problem maybe that the previous links cover several units in the same condo. Here is the link for one specific condo and I think it works:

https://www.zillow.com/homes/for_sal...87_rect/16_zm/

[rya96797]

Originally Posted by rhbj03

OK I think the problem maybe that the previous links cover several units in the same condo. Here is the link for one specific condo and I think it works:

https://www.zillow.com/homes/for_sal...87_rect/16_zm/

Sample of listings at that location. They're fee simple properties. It appears to me that the properties are fee simple, but subject to the sandwich lease, which I described earlier. If that's the case, then the lease it's describing is not the same as leasehold. Once the sandwich lease is up, the property is fee simple not subject to any leases.


https://www.locationshawaii.com/buy/...ay-212/?aid=63
https://www.locationshawaii.com/buy/...ay-607/?aid=63

LIFE'S A BEACH!!! Gorgeous end unit on the 6th floor directly above a white sand beach and the blue pacific. Upgraded and sold with furnishings. Buy now at half the price of the neighbors and better views. Perfect paradise getaway! Away from it all. It's yours... water sports, cocktails, siestas, romance! The bungalow of your dreams with a Latin/Pacific vibe. Excellent condition. Sold "As Is." Sandwich lease $54/mo will convert to fee in 2023. - See more at: https://www.locationshawaii.com/buy/....AGukVgKS.dpuf

[rhbj03]

Originally Posted by rya96797

Sample of listings at that location. They're fee simple properties. It appears to me that the properties are fee simple, but subject to the sandwich lease, which I described earlier. If that's the case, then the lease it's describing is not the same as leasehold. Once the sandwich lease is up, the property is fee simple not subject to any leases.


https://www.locationshawaii.com/buy/...ay-212/?aid=63
https://www.locationshawaii.com/buy/...ay-607/?aid=63

pj737's view is (if I understand correctly), that in 2023 the property turns into fee simple alright but the owner is THE CURRENT LAND OWNER, not me the condo buyer. This actually make perfect sense from financial perspective, because $100K divided by 6.5 years is 1282 per month; I'm essentially buying usage of the the 600 sqft condo for 1282/mo for the next 6.5 years. This rent level seems reasonable, if rent is what it is.

[rya96797]

^


but that viewpoint doesn't make sense because if it was a leasehold property, the listings would display it as leasehold, and not fee simple. Only a fee simple (clear title) or fee simple subject to sandwich lease would show as "fee simple".


___


Sorry, I really thing this situation is unusual, and you would benefit from retaining a realtor for help.

[Dthraco]

Yikes! $1,126 a month in maintenance fees!!! That’s a bit over $2 a sq ft for a 479 sq ft. place.

If it were me, I would want to find out more on the why the fee is so high. It is an old building, so that might factor in. Condo associations all run their buildings a bit differently with people having different agendas. Buying a condo without being able to do some homework on how the association governs the building can be a bit risky IMHO.

For a place that is far from town, that fee seems pretty high. Even for units with electricity included.

I’ve seen this building driving by it. It’s not technically ‘far’ from town, but when you factor in that the road to get there is 25mph, it’s far.

Sandwich leases are a scam. Just another way for someone to get a residual income. Sometimes the lease owner will offer to sell for a flat fee, sometimes they don’t.

It is at least not as bad as regular leasehold. When the lease of a leasehold unit goes below 30 years people can’t get conventional loans on them anymore. Then it’s all cash buyers....lowballing because they know they can. Super scary in my opinion.

Here’s the unit on OAHURE (in escrow):
https://www.oahure.com/SearchMLS_Det...opertyType=CND

[ScottStielow]

Sometimes the maintenance fees are as high as the mortgage or rent payment. Depending if your are owner or lease holder. Renter usually does not see the maintenance fee.
I do not because I rent a Town House but owner pay's the fee.

[whtviper1]

Originally Posted by Dthraco

Yikes! $1,126 a month in maintenance fees!!! That’s a bit over $2 a sq ft for a 479 sq ft. place.

If it were me, I would want to find out more on the why the fee is so high. It is an old building, so that might factor in.

All sort of things are driving up that maintenance fee....

Security Guard
Resident Manager
Old Building
Pool
Right on the ocean (the insurance is probably sky high)

[cagymcoach]

I think this building used to be a run down piece of junk. Then someone decided to give an effort to turn it around and make it nicer. I'm pretty sure the fees were not always that high. But since they raised them the place is a bit nicer. Anyone think this place is a good investment? Does it allow short term rentals?

[WaikikiBoy]

Originally Posted by cagymcoach

I think this building used to be a run down piece of junk. Then someone decided to give an effort to turn it around and make it nicer. I'm pretty sure the fees were not always that high. But since they raised them the place is a bit nicer. Anyone think this place is a good investment? Does it allow short term rentals?

I still think it looks like a run down building when you see it in person. I drove past it just a couple days ago and was thinking that very thing. It looks worse in person than in pictures.

It is zoned "Hotel" so it should be o.k. as a legal vacation rental as far as zoning goes. Unless their association by-laws prevent it.

Units here were even selling as low as $65,000 recently for studio units as fee simple. To me, that is a red flag that there are problems within the association.

It is likely that the HOA dues were low for many years and underfunding the association. Low HOA fee's often lead to lots and lots of deferred maintenance and inadequate reserve funding.

My guess would be that they have major repair work required and no reserve funds to pay for it. So they've had to substantially increase the HOA fees.

Some of their HOA Board meeting documents are online. I read their Jan 2016 Board Meeting minutes and they were discussing taking out a loan to pay for a new waste-water treatment facility on the property. they also were talking about rusting elevators and a need for emergency plumbing line repairs. As well as over $20,000 in emergency dry wall repairs (likely from leaking plumbing).

I found nothing from 2017 or 2018. But those are years when the prices dropped.

Good investment ? That would be for the individual investor to decide. But I would recommend reviewing at least the last 3 years of Board Meeting minutes as well as a review of the HOA Financial Statements and projects in there 20-year reserve funding study.

Without seeing that, I wouldn't even consider it.