Buying CPR property?

[rprr]

I am looking to buy a property (land+house) which is under a Condominium Property Regime (CPR). There are a total of 4 units -- two of these have houses built while the other two are vacant lots. Any things that I should watch for when buying CPR real estate. Will there be problems with financing and or when we resell.

Apologies if this is not an appropriate forum.

Thanks.

[rprr]

KathyH -- Thanks for your reply.

I am trying to talk to some mortgage brokers and lenders. It appears that there are some obstacles to financing and these depend on the particular condo property. Some lenders won't lend if anyone owns 50% or more units when the total number of units is greater than 2. Since there are not that many CPR properties on the East Side I am trying to figure out if such barriers to financing exist in more normal times.

I am planning to buy a unit which already has a dwelling on it. This CPR conversion was done a long time ago (mid 1990s) so I wonder if the other lots are grandfathered in regarding new dwellings on those vacant lot units. I am also concerned if there will be problems getting new permits if I want to modify the existing dwelling in the future.

[John S. Rabi]

I advise my clients not to buy CPR property. It's a can of worms starting with the water meter all the way through the common area maintenance. There are lots of good non-CPR properties on the market. BTW, the vacant lots have not been grandfathered in and no regular building permits will be approved for them. (And of course, no water meter either.)

Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
888.819.9669
johnrabi@johnrabi.com
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"
(This is what I think of the Kona Board of Realtors http://KonaBoardOfRealtors.info)

[Kapohocat]

quote:

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Originally posted by John S. Rabi

I advise my clients not to buy CPR property. It's a can of worms starting with the water meter all the way through the common area maintenance. There are lots of good non-CPR properties on the market. BTW, the vacant lots have not been grandfathered in and no regular building permits will be approved for them. (And of course, no water meter either.)...

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John, I was waiting for you to weigh in on this! IMHPDE (PDE=Planning Dept experience) Building permits for CPR's are a headache from beginning to end, or maybe dont ever get approval. I did get one through in 2008 but it took many months!

You would actually be better off trying to get the zoning changed to something usable and if there was any time to do it - it would be now since the current PD seems much more amenable to getting these type of things sorted out. Realize that CPR's are just as much of a headache for PD as it is for the person selling it or wanting to build on them.

CPR's were created to get around the water and road issues (again IMHO) and the zoning requirements for size of lots. (i.e if Ag-20 and it was a 25 acre lot - you couldn't split it into 4 but you could CPR it years ago. But also a lot of this happened in the last 20 years as property pricing heated up and thought could make some money on splitting lots without the infrastructure.

Now, if the one you are buying is already built, permitted completely, you dont have near the issues as vacant CPR land. But what happens if a hurricane or fire take your house?

I agree with John, there can be issues with common areas. What if you are dealing with a water line break that runs a long distance? There are so many things to buy that dont have issues, why take the headache unless you just cant live without it? Then John can give you the lecture about buying with the heart instead of the head and how it doesn't make for a wise investment at times.

[John S. Rabi]

quote:

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Originally posted by Kapohocat
Then John can give you the lecture about buying with the heart instead of the head and how it doesn't make for a wise investment at times.

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I love you Cat![][][]

Aloha,
John S. Rabi, GM,PB,ABR,CRB,CM,FHS
888.819.9669
johnrabi@johnrabi.com
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"
(This is what I think of the Kona Board of Realtors http://KonaBoardOfRealtors.info)

[rprr]

Thanks very much. I am learning a fair bit from this thread.

According to the CPR document, it appears that the other two vacant units each actually have a small shed like structure (<100 sqft). The original lot was a little more than an acre and each of the 4 units are roughly equal in area. I am guessing that it will be difficult to pull permits to construct houses at this time for the two vacant "lots".

[Kapohocat]

quote:

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...
I should qualify that my experiences with CPR's were in North Kohala.
However, it sounds like things are different in Puna...

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The one I did get permitted was near Naalehu/Punalu'u and the one we never got done was Hamakua Coast. There arent any I have found in Puna (yet) that I have had to deal with.

[rprr]

Does it matter if the CPR property is on RS-10 vs. Ag land?

[missydog1]

You should talk to Joaquin at the Planning Dept. He's terrific.

Here is the County Code on CPR's, but it's not the most helpful code I've encountered, thus my suggestion to call Planning.

http://www.hawaii-county.com/countycode/chapter23.pdf
Scroll down to Article 12 of Chapter 23 (about page 29)

[Kapohocat]

quote:

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Originally posted by KathyH

You should talk to Joaquin at the Planning Dept. He's terrific.

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Yes he is! I wish they had a on-line customer service survey because Joaquin is awesome.