Condotel in Maui - first investment property

[Jennifer Phillips]

Hi all - first post here, and I'm hoping for some honest feedback on an investment/personal use property at a condotel resort in Maui. Cut me some slack, as I'm just now learning some of the investment terms used on this site. We intend to use the property probably about 6 weeks of the year, during slow season. Annual occupancy without our use is about 77%. First, the loan will be 35% down, which apparently is typical for Maui condotels. Since we intend to use the condo long-term, we are looking at this as an investment in equity - money we would have had in the stock market otherwise. The resort does EVERYTHING for me - booking, cleaning, paying utilities, etc. - for $1300/mth. I am paying closing costs in cash, as my loan to value is maxed out at 65%, so that's another $10k out of pocket. I ran the BP analysis/report, and it's telling me my NOI is $21k, and cash-on-cash ROI is 1.86%. Gross rent multiplier is 5.8, and income-expense ratio (2% rule) is 1.40%. I'm seeing annualized total return at 7% year 1, 10% year 2, 11% year 3, and then it drops back down to 10%, 9%, 8%, etc. Cash flow is positive, but not hugely, and honestly we'll probably spend that vacationing there. Keeping in mind - we intend to use the place ourselves, and hope to make a little profit in the meantime. Does any of this scream "RUN AWAY" to anyone?