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+--- Thread: More affluent people moving to Puna? (/showthread.php?tid=409)
RE: More affluent people moving to Puna? - bystander - 05-11-2006
In the old days there used to be way more people living in makeshift shacks and tents in Puna. I sort of miss those days. This not only provided low cost housing for those who couldn't afford to build a house but kept land values low by keeping these affluent buyers away. They would never be paying these outrageous amounts to live in an area full of shanties.
Today most of these shack people have moved away. I suspect many of them were victims of a scam. I've heard that it was common practice among some unscrupulous land owners to "rent out" land to people who couldn't afford to buy it outright. These people had the American dream of owning their own home but didn't have the financial means to do so. They were suckered into signing a contract with these land owners where they agreed to pay so much a month for the land. In the end there were supposed to get the land but the contract they signed had stipulations which said that if they missed any payments they would have to leave and all previous payments as well as any improvments to the property would be forfeit. I think these scammers have sold out since the prices have gone so high. I personally know of one young family that was living near me. They were living in tents but started to build the floor to a small house. The landowner evicted them after they fell behind on the payments. Today there is a brand new house on the lot which the present owner bought for over $400K.
I'm definately not saying this practice should be continued or be encouraged but people should be allowed to live as they choose on their own land.
Edited by - bystander on 05/11/2006 06:34:51
RE: More affluent people moving to Puna? - pslamont - 05-11-2006
I guess I am more of a capitalist than I had thought, because reading the above, it seems to me that if you sign a contract, and you default on the contract, you lose your investment. That makes perfect sense to me. I think these are not scams at all, but rather an oppportunity for the have-nots to become have's. How else would some people buy property? I know of several individuals here in Puna who bought their land by making a small down.... maybe $500 and then paying a monthly mortgage to the owner. Most have kept up their payments for years and a particular friend, after 10 years of payments, paid off her land and is happily the legal owner, free and clear. Seems to me it's no different than buying a car. If you miss the payments, they repossess the car. What am I missing here?
RE: More affluent people moving to Puna? - bystander - 05-11-2006
True but these landowners never intended to sell the property outright. They preyed on people who had no other oppurtunity to own property. They knew from the beginning that they couldn't keep up with the payments and they would be getting the land back in the end. I heard some actively tried to evict people by nitpicking the contracts once the prices started climbing. If a regular mortgage is forclosed, the property is sold and the proceeds go to paying the note. The remainder is given back to the former owner. This was not happening in the cases I described. Also the landowner was knowingly allowing people to live on land without any sanitary facilities.
Edited by - bystander on 05/11/2006 08:36:27
RE: More affluent people moving to Puna? - miketat - 05-11-2006
I have a friend who is doing land contracts for many many years. Yes he makes a bunch of money on it, yes he takes the property back if people can't make their payments. But I know of many of his buyer's and they were nowhere near to byuing their own land under normal business conditions. You need to ask those who didn't have credit or bad credit, but got an opportunity to own land - ask them how they feel about land contracts. In my experience they see them as a blessings.
There will always be people who give things like land contracts a bad name. I see them as an opportunity.
michael
http://punaguide.com
RE: More affluent people moving to Puna? - Rob Tucker - 05-11-2006
I know what Bystander is talking about and, yes, there are scam oriented slum lords that have been operating here and taking advantage of anyone they can find.
One old proven method is to acquire a parcel and throw up some sorry illegal shack, no power, no water, no septic, no permit. They then find someone to enter a lease/purchase agreement which holds hope of buying the property over time - no money down. The interest rate is high and the small print is hazardous. The victim will make payments - and improvements - until they gradually figure out what a lousy deal they have. They then either abandon the property or fall behind on payments and are evicted. The slumlord then recycles the property again and again. A big disappointment to me is the county's total lack of enforcement in these situations.
Capitalism does have it's downside.
Chairman, Punaweb Committee, MSPA
RE: More affluent people moving to Puna? - leilaniguy - 05-11-2006
On the other hand, I have a friend, cancer survivor, on permanent SS disability, zip for credit, who bought a lot with an agreement-of-sale, made her payments diligently for seven years and now owns her lot and cabin free and clear. If it wasn't for the opportunity to buy on time, she would be homeless now. These deals may be shady, but for people in situations like hers, sometimes it's the only option.
RE: More affluent people moving to Puna? - John S. Rabi - 05-11-2006
Seller Financing ("Purchase Money Mortgage or PMM"
was/is a common way of financing lower cost land (mostly in Puna/Kau) because conventional lenders didn't lend on those properties. (Most still don't.) I wouldn't do any purchase without an Escrow Company and Title Insurance and I wouldn't do "Agreement of Sale or A/S" where title does not pass to the purchaser. Otherwise, it's a contract. Mr. Buyer, if you do not understand the terms don't sign the contract, see your attorney.Aloha,
John S. Rabi, ABR,CM,CRB,FHS,PB,RB
http://www.JohnRabi.com
Typically Tropical Properties
75-5870 Walua Road, Suite 101
Kailua-Kona, HI 96740
(808)327-3185
RE: More affluent people moving to Puna? - bystander - 05-11-2006
Most of the people who were suckered into these deals are too poor to even have an attorney. I think the practice has largely ended in areas like HPP and HA since the prices have risen so high. That's why we don't see as many people living in shacks. Too bad, I kind of liked it that way.
Edited by - bystander on 05/11/2006 10:58:34
RE: More affluent people moving to Puna? - David M - 05-11-2006
Unfortunately, the shady deals referenced by Bystander do happen, not just here but mainland as well. So do the mortgage shysters who prey on those in difficult circumstances that get involved without full understanding of the fine print. Perhaps more importantly, legitimate Agreement of Sale and Lease Purchase do exist as a WinWin for many. Back in the 80's (ohh, the memories) Sophie and I bought land via A/S. Part of the story - land was in Florida, we were stationed in Germany at the time. OK, stop laughing
Point is, it was a decent deal, we paid it off and ended up owning outright, and did sell it all before moving here. To my knowledge, most of the lots in this development originally sold this way. As for Lease/Purchase of houses, if as some think, some of the speculators are having challenges, I'd look to see more of these type offerings here. Strange enough, but my own house which hasn't sold back on the mainland, I'd consider a proper lease/purchase (short term). We sold our last one that way in a tight market.Tieing back to this thread/topic. One can't pick up one of the island papers without at least weekly reference to "affordable housing". Consider how much of the above discussion impacts the ability to have affordable housing. In part due to the affluence feared above, the ability for the common person to erect a safe, but low cost house himself is no longer possible here. Not only does it take money just to get through the permit stage, but unless one has a network of licensed construction buddies, one is prevented from doing much of the work himself. To me, it would make much more sense to allow a person to do electrical/plumbing work and then properly inspect it. I don't want a rickety shanty or firetrap next door, but I suspect that most of us (0ver 55) here lived in houses before all this over-regulation that didn't qualify as either.
We are blessed to own 21 acres, but it would be easier, probably cheaper, and looked on more favorably for me to get another college degree (which would be useless) than be able to build a legal, affordable home on our property that our son and family could live in. (I know, Farm Dwelling, but that's hoops too, and heaven forbid I do it then decide not to farm/ranch).
Anyway, some interesting turns in this thread - thought provoking even.
David
Ninole Resident
RE: More affluent people moving to Puna? - Lee DeJongh - 05-11-2006
ALoha from Wisconsin
Very interesting discussion. It occurs to me that one unique thing is that you are on an island and your land values are not entirely responsive to market forces. ie, there is a lot of vacant land, but it is being held and is not for sale, and properties are being parcelled out carefully so as to not flood the market.
From my perspective, here in Wisconsin, if I can not afford housing in one area, say, Madison, I simply move a few miles and the housing is MUCH cheaper. That seems to be less true there. To get truely cheap housing you have to move off island or live in less than standard conditions, which it is possible to do.
Still, it's all perspective. Prices here are so high in places that your prices look like a wonderful bargain to me. Land is much more expensive here in many places. For example, the lot my house is on is valued at over 200,000 for tax purposes (fortunately, ididn't pay that), (population of the town is 7000) and my taxes are 7000 dollars a year and for that I do not get garbage pickup, I have my own well and septic. They do plow the roads in wintertime. It costs me several hundred dollars to plow my driveway each year. And my land area is one acre, (which is really quite a lot, most people have much less. I consider myself fortunate but is it any wonder I'm looking to retire in HAwaii?
I don't think you have a few feet of snow to plow each winter
So most things are more expensive but others are cheaper or at least not so bad. Property Taxes on the mainland are very high.