All Forum Posts by: Patrick Franta

@Alexei Rudometkin

Aloha. Mike provided a very accurate an unbiased assessment of our current market. I just spent all last week showing investors around Kihei looking at every single viable option every price point. And to be honest, none of them penciled out well unless you self manage. It’s just the way out market is right now. Price appreciation has outpaced rent growth and the cap rates have gotten squeezed to a point where returns are slim to none. 

Unless you are buying strictly for the appreciation or can find a great buy off-market. The timing just isn’t great right now. 

Aloha,

The maui news classifieds is usually the best place.  I do think they also post the notices on the county website.

Aloha Dan,

Who is the timeshare managed through?  They can usually sell it through that company and that is usually the best avenue.  

So epic Mike!  Which complex this time? You can shoot me a dm.  

Lance Hardy with Haiku appraisal is the man.  I have worked with him a bunch.

Aloha @Sean Monahan!

I am actually going through this process right now.  Currently the best option in both pricing and terms on Maui is through first Hawaiian Bank.  American savings is a close second but their pricing is 1/8th of a point higher.

First, your friend will need to get a vacant land loan to purchase the lot.  This is a short term 1,2 or 3 year interest only loan.  You will only need this for the time period you estimate it will take to get your plans and permits completed.  Can be done in under 1 year if you are on top of it.  Keep in mind you will have to have your permits in hand before you can apply for your construction loan.  The closing timeline on a construction loan with FHB is 50-60 days.  Once you close on your construction loan this pays off the land loan and you pay interest only on your draw amounts until you finish the build, then it rolls into a 30 year fully amortized loan.  Another alternative for the construction loan to the local banks is US bank.  They offer good pricing and terms.  They currently have a moratorium on const. loans in Alaska & Hawaii but that could lift at any time.  

I hope this helps.  If you would like specific lender reccos let me know and I will shoot you a DM.        

That $450 a month seems low. Electricity alone on a 2 bed is usually around $200-250. You also need to account for taxes, insurance, HOA dues and management fees. If you are self managing the numbers will work very well. If you are using a full service PM they take 25% off the top. I wouldn't worry too much about a market shift dramatically affecting your occupancy. Your ADR will go down but occupancy should always stay above 60%, especially if you are priced right.

Typically in Kihei the 1 beds offer a better cash on cash return but if you need a 2 bed for personal use that would make sense .  Your agent should be able to provide all off this for you and more, this is just my .02.    

I take it were not meeting at Brew Co?

Aloha Matt,

In short the answer is yes.  The Hilton redevelopment of the Maui Lu site is going to be great for that entire area.  They are going to improve the road and shoreline in the area as well.  The nice thing about timeshares is they won't be direct competition for your rental as they are limited to the pool of owners.  Sales of condos in your complex/area shouldn't be affected by the release of this project as fee simple vacation rentable condos will always be the better long term investment.   

If I am understanding you correct you would not receive any of that back as a refund because it was never paid.  Your operating costs are paid throughout the year and when you file your taxes at the end of the year they are deductible against the income you generated.  I guess if you were paying estimated taxes throughout the year you would receive a refund of that amount at the end, but I don't think that'd be the case because you would pay your estimated based on what you predict your net income to be.