Unique North Shore Short Sale - Save 1 Million Dollars?

There's an interesting property for sale out in Haena that may provide a great investment opportunity for someone who values the North Shore of Kauai and doesn't mind a little bureaucratic challenge. This home in Haena is seven bedrooms and six and a half baths. It's currently 5 rentals. The main home rents for 3K a week and the other units for less. If a large group wants to rent the entire property , it rents for 5-7k a week.

The property is currently assessed at 2.482 Million. While the listing is at 1.7M, i believe you could buy it for less if you are patient enough to deal with the bank. The owners are upside down and are clearly walking from the property.

The challenge is the fact that the home is in the non VDA location and thusly, the owner must submit an application for a non conforming use certificate (NCUC) by September 15, 2008. Submitting the application requires proof of prior rental history, architects and engineers stamped plans, and filling out an application. Not too bad. However, we'll need to ascertain from the county of Kauai, what is legal and permitted and everything else, including several of the downstairs rentals, would need to be brought up to code, which probably means pulling out kitchens and plumbing which are not permitted. You need to know that maintaining a large home on the North Shore of Kauai close to the ocean is a big resposibility. The salt walter and winds provide wear and tear such that the home must be regularly maintained.

I'm not a contractor so I'm not sure what the cost of the demo work would be. Even if it is 100k ( and i do not believe it would be) the property still has solid value. PLUS, I've been speaking to the former property manager who has rented the property for 12 years. The manager loves and believes in the property and this property manager would be a great resourve for any buyer.

If you have any interest in pursuing this type of home, I'd be happy to guide you through the challenges of this unique property and the intricacies of a short sale on Kauai.