All Forum Posts by: Jennifer Phillips

Also, just to wrap it all up, @Jason G., the $1300/mth was not including management fees.  It was only maintenance.  They later disclosed all financials, and more charges surfaced.  We have bought many a primary residence, but not rental properties, per se.  Is it typical to get all financial/fee disclosure AFTER earnest money is put down (our realtor says it is in Hawaii)?  Because that could change SO much, including the offer price that you ALREADY locked down!  Also, it seems pretty daunting to be promised you will get your earnest money back if financial data makes you change your mind.  It's in the contract, but still, cutting that check hurts, and feels too risky.  All fees and expenses should come first, before the offer and earnest money.  Don't you think so?  Again, we're told that Hawaii operates differently than other states due to the classification of properties (condotel, etc.), so this may not apply to, say, Indiana.  I should start a new thread on this topic....  :)  Thanks again!

Hi @Scott S. - my numbers are based on actuals from past statements because, obviously, they can't give me anything for the future.  ;)  That said, you are correct - post-COVID could change the game completely for this investment, yet to be seen, but certainly a very strong possibility.  That risk, along with final disclosure of all fees (including property management fees, which have been disclosed as about 45-55% of revenue (to your point, @David Rucker), have put us out of the game on this property.  Oh, and David Rucker, the property does allow us to use a different management company.  Either way, in good times, this would be only an OK investment (1-3% cap), considering it is a lifestyle investment, not so bad.  In bad times, we could be screwed.  :(  Thank you all for giving me more to think about and replying to this post!  I truly appreciate it!  

Hi Jason - yes, those are aside from the PITI. Though I just learned that the fee isn't $1300/month necessarily, rather it's 55% of revenue. That's pretty high. I have copies of 2018-2020 income statements, and it is profitable, though like I said, it's not hugely profitable. More like, will pay for our vacations, but not a lot of extra. The units are appreciating at about 3-4% per year, and we intend to hold onto it for a good 10 years, give or take. During COVID, nothing is renting in Hawaii as far as short term rentals go. They are not allowed (though opening back up 10/15). There is only one more unit for sale in the resort (an upgraded version of the one we are buying, for $19k more), and the resort is popular, beachfront, and has full amenities. Nothing in Maui is selling for below purchase price. ;) Certainly not these units. They go up and up in value. Thank you for your reply!

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?