Tiny Home BUT!! Structure is not permitted. Should I get invested or not?

[Migle Taylor]

I found a Tiny Home on 0.5 acres in Hawaiian Paradise Park, On a Big Island. BUT!!! - Structure is not permitted. Should I get invested or that's a red flag? Also, getting a permit for short-term rentals in Hawaii is getting more complicated every year. Does anyone have any insides on this one?

[John Underwood]

I would not invest in this, certainly don't pay more than land is worth since it is not permitted.

[Michael Baum]

Hey @Migle Taylor. So is it a permanent structure on a foundation or on a trailer?

After a quick look at the park it appears they are all on some kind of foundation. If it is unpermitted, then you are just asking for trouble.

The structure is essentially worthless without a construction permit. You might be able to get a retro permit for the structure but I wouldn't take the risk.

[Migle Taylor]

The main area of home is on wheels, only the outdoor shower and deck are on foundation. LOCATION IS EVERYTHING IN THIS SENARIO, it's 15 min walk to the beach, and properties  around are selling for 500-700k. It's not much of a house, but I am thinking of offering cost of land + tiny house on wheels. 

[Michael Baum]

Ok @Migle Taylor, if it is on wheels, then it isn't real property. It would be considered an RV or trailer in most areas. You will need to call the county and see what they say. I am guessing that they didn't permit it as it wasn't necessary. It isn't a permanent structure.

The deck and shower should be looked into. I am guessing that it can get a retro permit. Call the county.

Is the trailer on septic or attached to community sewer? Water? Electric?

Is it more like an RV dump type thing or ?

[Brooklyn McCarty]

I would move along, personally 

[Dana Yost]

I personally wouldn't invest in Paradise Park AT ALL, unless it's changed radically in recent years. You're seriously seeing comps around $500-$700K??? Surely, that's for properties with sizable homes and infrastructures (something still lacking in HPP)?  I will have to look into that, as that is definitely not what I recall of that area. 

Ok- I just opened a different window and quickly looked and easily found some residential size lots (in established areas of HPP, paved roads, close to the beach) as cheap as $20K, and larger lots up to around an acre for around $100K (or less). That's the Paradise Park I remember. It's good to see that it's becoming more established though! 

Hopefully, they've successfully cleared out some of the riff raff. It sounds like what you're interested in purchasing would be mostly for land value (which has historically been the case with a lot of properties there). I would just advise to proceed cautiously (extra cautiously). 

[Dana Yost]

Quote from @Michael Baum:

Ok @Migle Taylor, if it is on wheels, then it isn't real property. It would be considered an RV or trailer in most areas. You will need to call the county and see what they say. I am guessing that they didn't permit it as it wasn't necessary. It isn't a permanent structure.

The deck and shower should be looked into. I am guessing that it can get a retro permit. Call the county.

Is the trailer on septic or attached to community sewer? Water? Electric?

Is it more like an RV dump type thing or ?

 Most of Paradise Park has much more limited infrastructure than that. AFAIK, unless things have changed very recently, there is no community water, sewer, or electric in most of HPP. It's been that way for years and development has been slow (comparatively). I know there are some paved roads now and I wouldn't be surprised if some limited areas have electric too. Most have traditionally been on some form of water catchment or cistern and septic though. It's always been an eclectic mix of homes and some of the least expensive RE in Hawaii. 

[Zane Cress]

If it's unpermitted you run into insurance issues and it only takes one neighbor to complain about it and the government makes you tear it down or spend a ridiculous amount of time and money to get it permitted. If the seller really wants to sell then make them start that permit process and see how much trouble gets stirred up. 

[Chad McMahan]

Quote from @Migle Taylor:

I found a Tiny Home on 0.5 acres in Hawaiian Paradise Park, On a Big Island. BUT!!! - Structure is not permitted. Should I get invested or that's a red flag? Also, getting a permit for short-term rentals in Hawaii is getting more complicated every year. Does anyone have any insides on this one?

Unfortunately, there is not nearly enough information here to give you sage advice on what to do. I strongly recommend you team up with a phenomenal local seasoned real estate agent and really dig into it.

[Henry T.]

Half the houses out there are illegal with no permits. You can take your chances I guess. They don't allow STR around there, not legally anyway.

[Michael Baum]

Quote from @Henry T.:

Half the houses out there are illegal with no permits. You can take your chances I guess. They don't allow STR around there, not legally anyway.

Just curious how you found that out? I looked at the area and the rules of the place and I couldn't find anything restricting STRs. There are quite a few on VRBO.

[Dana Yost]

Quote from @Michael Baum:

Quote from @Henry T.:

Half the houses out there are illegal with no permits. You can take your chances I guess. They don't allow STR around there, not legally anyway.

Just curious how you found that out? I looked at the area and the rules of the place and I couldn't find anything restricting STRs. There are quite a few on VRBO.

They may be wrong, as far as the part about restricting STVRs. I recall reading there are some 150,000 of them on the Big island (how many are officially permitted though- I don't know). Anyone buying one should seriously research what's possible and be aware there is a move to restrict these short term rentals on Hawaii, as there was recently on Oahu (successfully).

My understanding though is that HPP itself has no defined building codes. They are simply governed under the codes of Hawaii county. Hawaii county does have all the applications and extensive information online about STVRs. It would behoove anyone interested in doing this to not only read up on the current regulations, but to also speak to people "on the ground" in Hawaii county that could guide them on the current environment- legally and politically. No one wants to invest in a property that may soon become illegal or regulated out of business. 

I would say they may very well be correct in the assertion that "half the houses out there are illegal with no permits" though. In the past, HPP has had a bit of a reputation that almost "anything goes" as far as structures on these properties. My recollection is that it was started as a massive block of 1 acre Ag. zoned properties (I would probably read up on that zoning as well if I wanted to legally do a STVR) and it has always seemed to attract people that want to live inexpensively in Hawaii with minimal oversight- hence I've seen structures of all sorts offered there in the past.

Some Hawaii county links-

Short-Term Vacation Rentals

Online Application Links

Potential "Sweeping Changes" Coming

[Dana Yost]

BTW- It is possible to transfer a previously licensed Hawaii county STVR to a new owner when the property/land sells. Just because the tiny house is not permanently affixed and wasn't permitted with building permits, it doesn't necessarily mean the STVR wasn't. I have no idea the current regulations on using movable or temporary structures as STVR, but if that is allowed, the rental might've been permitted. Without further details, we really don't know and the OP hasn't said. This is the application though-

STVR Change of Information

[Henry T.]

Quote from @Michael Baum:

Quote from @Henry T.:

Half the houses out there are illegal with no permits. You can take your chances I guess. They don't allow STR around there, not legally anyway.

Just curious how you found that out? I looked at the area and the rules of the place and I couldn't find anything restricting STRs. There are quite a few on VRBO.

 Big Island. A relative built a new place(along side his main house) out there near Keaau with vacation rental intent. He says it's no longer possible. Only pre- existing vacation rentals are operating. New ones are only allowed in certain districts (I'm assuming hotel areas) but not sure.  This is only what I've heard. I see them on Airbnb, but not as many as you'd expect if it were allowed full bore. Sorry I can't offer more facts, just heresay.  Oahu? There used to be rentals all over Oahu, now it's practically a ghost town , shut down,  except for certain designated areas.   This caught my eye the other day. Funny. 

https://www.airbnb.com/rooms/5...

[Zach Edelman]

This is likely going to be difficult to finance. Just something to look out for. 

[Henry T.]

An old friend had a place in Leilani estates (just below Paradise), when the 2019 lave flow happened it took out the main highway near his house. Lava surrounded his house, I dont think he suffered much damage. But to get in or out he has to climb up a 12 foot ladder, get on top of the lava, and hike out. No cars will ever get to that place again. Unless you have millions in dynamite.