Investor · Pukalani, HI · Member since 2017 · 413 posts · 291 votes
Aloha All
I'm wondering if anyone has ever bought a Lease Hold property at a Hawaii court commissioners auction? And if so how much did you have to pay in back owed lease payments?
I love our system as it relates to most other arrears, but everything I can find says that there's no limit on back owed lease rents that can be transferred to the buyer and no one is able or willing to tell me how much is owed on this condo that we're planning on bidding on at the court house tomorrow! I feel like it's a good enough deal to take the chance, but a little assurance would really be nice!
Investor · Kaneohe, HI · Member since 2015 · 91 posts · 36 votes
7y
Based on my experience there is no limit to back owed lease rent because the lease agreement is superior to any mortgage or AOAO lien. The outstanding lease rent stays with the property and the lessor can foreclose on the property for that amount plus fees. You should be able to buy the lease documents from the BOC and estimate how much is owed on the property. You could also ask the lessor for an outstanding balance--they may share the info with you.
Based on my experience there is no limit to back owed lease rent because the lease agreement is superior to any mortgage or AOAO lien. The outstanding lease rent stays with the property and the lessor can foreclose on the property for that amount plus fees. You should be able to buy the lease documents from the BOC and estimate how much is owed on the property. You could also ask the lessor for an outstanding balance--they may share the info with you.
Thanks Elijah. The lessors never seem to want to give that info. I don't quite understand that yet, I'd think they would want to be helpful and assist in someone buying the property so they can collect the arrears. But I was able to reach the lessors attorney yesterday and he told me the back owed lease rents are only $3,500, so we're heading to court to bid now!
@Greg Gaudet glad to hear you got the amount owed. How did the auction turn out for you?
Thanks! We lost! lol the banks credit bid was 54k, we valued the unit at about 100k and had a max bid of about 68k. There were 4 bidders at confirmation and 2 guys bid up to 101k! It was a LH studio vacation rental in Napili in average condition. About $4,000 in LH arrears and $3,500 in back owed HOAs (6 months worth).
Good news is we won the next auction that day! Condo with an ARV of about 120k-125k, we won for 97k that needs about 5k in repairs. Hopefully no one reopens bidding at confirmation on that one; I don't think anyone will though because there's not much more margin left, especially after the 5% to reopen bidding.