I'd like to get your opinions... are "vacation properties" a good investment up there?

They are either going to figure it out and both stay, one of them is going to move on their own, or they both are going to want to stay and continue to fight and you are going to have to pick one to vacate.  

I recommend that you pay part up front to help the borrower pay for moving expenses or a rental deposit, and the balance after borrower has vacated and left the property in good condition. 

They buy multifamilies, vacate if not already done, rehab, convert to condo, then sell. 

The previous tenants were inside smokers and vacated the place leaving it trashed. 

You must adhere to these agreements until they expire and then you have the opportunity to place your tenants under new terms or serve them a 30 day notice to vacate.

Painted floors are a thing in many beach vacation rentals.  

I am in the process of eviction with one of my tenants right now, having got my Judgement for Possession of Property on Thursday (the trial in front of the judge), but the tenants will not get served their 24 notice to vacation until today, which then puts the sheriff showing up on Monday at the soonest. 

The vacation they took and fancy car in the driveway has now come due. 

I haven't seen someone complete this strategy from start to finish yet, but I know a few who have gotten into it.Here's an overly simplified and unverified example of how this strategy would work: purchase a LH condo in Waikiki and use it as a vacation rental.