Frequently Asked Questions

Is co-owning legal>

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YES.  As the price of homes and condos in Hawaii has increased, co-ownership has become a much more desirable way to own a vacation home. 

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How does it differ from owning outright?

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The home or condo is owned by a limited liability company set up by the co-owners. Each co-owner becomes a partner in the LLC, with rights to use the property as determined by the operating agreement set forth by the partners.  The usual way this works is for each partner to own a specific time period each year.  

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Can I get a mortgage to buy my share of the property?

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No.  Because the property is owned by the LLC, partners are not allowed to secure their portions of ownership with a mortgage.  Mortgages are typically secured by the property in the case of foreclosure, but that isn't possible in the case of a shared-ownership property.  

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What's the best way to pay then?

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For most people, there is a tremendous amount of equity that you have on your main home.  You can tap that money by taking out a HELOC (home equity line of credit) loan on your main home.  Most banks and credit unions offer 10-year HELOCs, and you can repay over time as you like, with only interest due each month.  See your bank or credit union for more information. 

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So how does this work exactly?

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The purchase process is very similar to when you bought your home.  There are just a few different documents to sign.  You make your offer using the statndard real estate purchase contract.  Once accepted by the seller, the seller contacts the managing partner of the LLC to add you as a new partner.  You'll have to agree to the terms agreed by the existing ownership partners, and they will draw up new partner agreements for you to sign at closing.  The closing will be handled by an escrow / title company.