Big Island Hawaii properties in conract- any buyer opinions?

Question

Aloha everyone and my Big Island Hawaii friends.

I have a couple properties on their way to being in contract. VERY CLOSE.

how do you feel about 1acre property in HPP, not cleared, nothing done to property- assignment fee of $10,000.00- total purchase $23,000 today? too much or not enough?

how about this one- 3/2 Pahoa needs $20,000 in repairs- ARV= $150,000- purchase today for $110,000

any ideas, comments, criticism?

RJ Bates III · Answer

@TJ Urban I would say on the flip property the numbers are too tight and not enough profit for the investor. As for the lot if the numbers are good for the investor to clear and build upon then the $10,000 assignment fee is perfectly acceptable!

Royce Talbo · Answer

@John Dirgo Deweese thanks, my thinking was that its a simple layout thats functional besides the small rooms why wouldnt people want to rent.  I can see if you are purchasing it for a home maybe you would want a little more character.  Maybe my view of things are clouded because of the 0 vacancy here on Oahu where people will rent pretty much anything and line up for it, at the right price.

John Dirgo Deweese · Answer

It's a very plain, very boring design.  It was created basically to make it the cheapest, easiest place to build.  It is essentially a rectangle with all the plumbing stuck together to make construction simple.  The bedrooms are small.  Heck, everything is small.

So many were built that it's not uncommon to see three or four within a block of each other.

You can call many contractors (roofing, painting, flooring) and just tell them that you need a quote for a "1056" and they will have one pre-printed.  It is just an unappealing overused design.

Royce Talbo · Answer

@John Dirgo Deweese whats the reasoning for people not liking the 1056 design?

John Dirgo Deweese · Answer

Well, you know as well as I do that the tax assessor's value is pretty much meaningless.  When prices are increasing, they increase the taxable value fast -- but strangely, when prices corrected back in 2008-2010, taxable values just didn't seem to come down very quickly at all.

If the house is actually in Hawaiian Beaches (as opposed to Hawaiian Parks or Hawaiian Shores or HSRE), and it's a 1056 (an HPM design that was built by the THOUSANDS and is known by its square footage), $150,000 is probably too high of an ARV. No one wants a 1056.  No one. Not even renters.

Mana Silva · Answer

Where on 17th is it? Between Kaloli, Paradise, Makuu? Im looking for 10 lots at the moment.

TJ Urban · Answer

@Zach Quick thanks Zach. These number are correct and what you said makes total sense!

TJ Urban · Answer

Aloha John D. The property is located cfairly close to the ocean down Hawaiian Beaches  0.28acres- 1,056sq ft house

The lot in HPP is on 17th ace. Tax Value is at $30,000. According to tax records, Lots sold recently in that area average $23,000. Although I did see a couple for sale today at $15 & 16,000.

Thanks for checking this out and your opinion. MAYBE interest.  Thanks!

John Dirgo Deweese · Answer

Where in Pahoa? What's the lot size? The area covered by the Pahoa covers Ainaloa, Nanawale, Hawaiian Shores, etc etc. In same of those $110k would be a great price. In others, far too much.

The lot in HPP, where in HPP? If it's down in the single digit streets and not covered in albizia, that's a decent price. If it is covered in albizia, it will cost you thousands to get rid of them and you'd still be at risk from them on neighboring lots.

Zach Quick · Answer

@TJ Urban For the 3/2, a rule of thumb to use with flippers and rehabbers is the 70% rule which is for them to buy all in plus rehab at 70% of ARV.  So in this case a better deal with some teeth to it would be pricing it at $85,000 with $20,000 rehab being all in for $105,000 which is 70% of your ARV.

I have no knowledge of your market if these #'s are right just my two cents on what may attract more people for the house.