How would you do it? (Hawaii long-term deal)

How would you do it? (Hawaii long-term deal)

Architect · Honolulu, HI · Member since 2020 · 12 posts · 7 votes

Hey guys, I'm quite interested in a specific property here on Oahu. It's dropped in price but still expensive ($mm). I think a lower price is reasonable, as the home is old. Getting a capital partner on board may be a challenge, because it's in the shoreline management area, so the holding time to get the permits may be longer than a partner is comfortable with. Maybe there are other options... 

Perhaps I could secure an interest-only mortgage for a few years (with a balloon payment), but I would need to refinance after a year or so (once I get the SMA application approved). The idea being I would refinance the loan into a renovation loan, with the end goal to transform into 4 condos. There'd be instant equity by that time too (the property is already undervalued). But I'm doubtful that interest-only loans would be on the table during this uncertain market. 

So maybe the owner would consider a contract for deed deal? Maybe they would be interested in getting the monthly income and avoid the increased tax burden for a few years. But that's a challenge too, as I discovered the owner lives on the mainland, and is quite elderly (living with one of the children). Interested in any advice. Thanks!

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