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For minimum maintenance an almost guaranteed rental income, I would construct two 600-700sf 2/1 CMU wall on slab units on your acre. Build them tough as nails with basic interior finish. Equip each unit with a 5,000 gal catchment tank with lockable pump house. Supply fridge & stove but not washer & dryer (only hookups) or anything that would require maintenance/cost on your part. Keep the rent just under a tad of the required maximum allowed for a 2/1 under the homeowners affordable housing tax incentive program. Accept county housing and they will be beating a path to your door.
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quote:
Originally posted by DesertOcean
. . . I would construct two 600-700sf 2/1 CMU wall on slab units on your acre. . .
The County of Hawaii has become very strict in the permitting process for "ohana" structures (i.e., more than one legal residence on a single lot) in HPP. Friends tell me that they are now only permitting them for bona fide family hardship situations. A few years ago they were more liberal.
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Do what this guy is doing:
http://www.ebay.com/itm/HAWAII-LAND-FOR-SALE-Low-Down-Payment-SELLER-FINANCING-/251005169104?pt=Land&hash=item3a7112edd0
http://www.ebay.com/itm/HAWAII-LAND-FOR-SALE-1-Acre-Low-Down-Payment-GUARANTEED-FINANCING-/251005172887?pt=Land&hash=item3a7112fc97
http://www.ebay.com/itm/HAWAII-LAND-FOR-SALE-Guaranteed-Seller-Financing-1-Acre-LOW-DOWN-/251007794247?pt=Land&hash=item3a713afc47
http://www.ebay.com/itm/HAWAII-LAND-FOR-SALE-2-Acres-Guaranteed-Financing-3-YEAR-EXCHANGE-POLICY-/251009007067?pt=Land&hash=item3a714d7ddb
(etc...)
At least the property will start generating some revenue. And when they stop paying on it, you finance it to someone else. Repeat. And (if even on the off chance) that somebody pays until the end, you've made your money back and then some. In the meantime, you keep all the upgrades they put on it. You also have to deal with the downgrades. But being a vacant lot owner, you do that anyway.
p.s. last I looked there were similar seller financing offers on Craigslist. I've also seen them advertised in the Hilo paper.
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In my opinion this is a form of slum lording here in Puna.
There are some local individuals who prey on people using this bait.
Assume the best and ask questions.
Punaweb moderator
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So long as there is early payoff penalty, I don't see it as slum lording at all. Its a good way for somebody without credit to get their foot in the door and make the transition from renter to owner. It was by seeing one of these ads that I became a responsible land owner myself (even though I never used an owner finance).
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My exposure to it has been different. But it's okay to disagree. I have watched landowners "sell" the property with no or nearly no money down, high interest on land with no (legal) improvements and practically no paperwork.
After the buyer invests a few months of time and effort improving the property the true value of the deal sinks in and the buyer pulls out losing time and money. The landowner reaps the improvements (such as they might be) and cash and repeats the cycle.
To me it is taking advantage of the poorest of the local folks.... and I simply don't approve. It's kind of the real estate version of Payday Loans.
It is part of what bothers me about proposals to amend the building code for alternative building or reused material building. Slumlords will simply love that if it gets passed. Throw up a crappy shack, sell it for too much, no money down, take it back and repeat ad nauseam.
Assume the best and ask questions.
Punaweb moderator
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That's exactly what I meant with my post.
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I don't need to sell the land. I can wait for years for the market to recover, if need be. In fact, I've thought about buying more lots just as an investment. You can get 3 acre lots in Puna for around $8000 an acre. Some HPP lots are going for $20K. The one thing that keeps me from doing so, however, is that it could be years before big island real estate recovers.
As for building a rental on my current lot, you've all convinced me that my gut instincts about doing so were right. It would be a bad idea.
Thanks for weighing in.
The real estate will go down more, don't buy in now.
“Setting a good example is a far better way to spread ideals than through force of arms.”
-Ron Paul
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quote:
Originally posted by afwjam
The real estate will go down more, don't buy in now.
“Setting a good example is a far better way to spread ideals than through force of arms.”
-Ron Paul
I thought that (adjusted for inflation) it was already valued down to the point when it was first subdivided?
