# Ritz-Carlton Kapalua Maui condo-hotels for sale



## PerryM (Nov 15, 2007)

December 10 is the deadline to submit a reservation to the late January sales event for 107 condo-hotel units.  About 45 will be 1BR from $900k - $1.5 M, 2BRs will be about $4 M.

This is a fantastic opportunity to own a Ritz in Maui.  These are whole ownership fee simple.  I’m guessing that at least 1,500 folks will plunk down the $20k and enter the lottery.  The 107 entries will be a FIFO type of sale where you get to pick what’s left when your number occurs.

Here is a link to a middle man – I recommend you deal direct with Ritz but the pictures are fun to look at.  

If anyone is interested you can send me a PM for more info.


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## Steamboat Bill (Nov 15, 2007)

PerryM said:


> This is a fantastic opportunity to own a Ritz in Maui.



Are you entered into the lottery?


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## PerryM (Nov 15, 2007)

Steamboat Bill said:


> Are you entered into the lottery?



No, we already own a condo-hotel 2 miles away on Kaanapali Beach.  I'm contacting a number of my friends who will probably enter the lottery.

But this would be a great thing to put up $20k and see if you luck out - you can decline if you should draw a low number and the broker calls you on the sales day and tells you what you can buy.

If you go on you need 20% of the sales price wired that day and I think they are looking at a short build cycle of less than 2 years.

A lot of this info will come out shortly - Ritz tried to do this themselves and for just 107 units ignored folks - I had made 10 phone calls and gave up - got a sales packet 2 days ago and called the broker.


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## travelguy (Nov 15, 2007)

Perry,

Have you done a cash-flow analysis on this yet?  If so, would you post it?

Thanks!


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## PerryM (Nov 15, 2007)

travelguy said:


> Perry,
> 
> Have you done a cash-flow analysis on this yet?  If so, would you post it?
> 
> Thanks!




Will not do one for this one - I have no interest.


The really really (did I mention really?) Good thing about this project is that rental rates are NOW available since RC has been there for 20+ years.  This is all you need.  The sales guy who called me told me I could get them in an instant - but of course he can't talk about them.  He did say that the average occupancy was 85% but that the RC had been run down for the past 5 years - I don't know why.  But that's why the makeover and new Condo-Hotels.


I know of no other condo-hotel projects for this part of Maui and the way Maui is going don't look for another one for 20 years.

P.S.
for the past 35+ years Kaanapali Beach has appreciated 9% compounded annually.  I'm guessing the RC area is the same (just a few miles away).


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## pwrshift (Nov 15, 2007)

I received their literature by courier the other day too, but felt it wasn't very informative or graphically pleasing.

The sales person called me yesterday about it, and told me they also are selling the Ritz residence in Vancouver too which might be of more interest to me...but that market has gone sky-high too, even worse than Toronto.

The super-rich are buying ....

http://www.theglobeandmail.com/servlet/story/LAC.20071103.CAPITAL03/TPStory/?query=real+estate

Brian


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## PerryM (Nov 15, 2007)

pwrshift said:


> I received their literature by courier the other day too, but felt it wasn't very informative or graphically pleasing.
> 
> The sales person called me yesterday about it, and told me they also are selling the Ritz residence in Vancouver too which might be of more interest to me...but that market has gone sky-high too, even worse than Toronto.
> 
> ...



That's the same spiel I got, but I do know that many Canadians love Maui - our bus driver from Seattle to Whistler owns a house in Maui; he's Canadian.  I almost get the feeling that Canadians still consider Hawaii an independent nation and not associated with the US - my impression.  Our condo-hotel is developed by IntraWest/PlayGround and they expect to fill our condos with folks who visited Whistler - folks from Europe.  Combine 2 weeks in Maui and 2 weeks at Whistler in the save holiday.  I hope they are correct.


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## pwrshift (Nov 15, 2007)

I don't think western based Canadians feel Hawaii is an independent nation as it's just a 5 hour flight, but from Eastern Canada it's a very long day changing planes just to get there.  You can get to Rome about 5 hours faster from Toronto as it's non-stop.  If I lived in Vancouver, Maui would surely be on my regular vacation destination list.



PerryM said:


> ...I almost get the feeling that Canadians still consider Hawaii an independent nation and not associated with the US - my impression. Our condo-hotel is developed by IntraWest/PlayGround and they expect to fill our condos with folks who visited Whistler - folks from Europe. Combine 2 weeks in Maui and 2 weeks at Whistler in the save holiday. I hope they are correct.


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## PerryM (Nov 15, 2007)

*Ritz web site now up*

The Ritz web site just came up...


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## travelguy (Nov 16, 2007)

We stayed at the Maui Ritz for a week several years ago.  I was under-impressed with the resort property.  The hotel is so far away from the beach that you needed to get a ride on the hotel carts to get down to the beach.  And forget about walking back since the beach is down a steep hill from the hotel.  The beach itself was small and not as spectacular as many other beaches in North and South Maui.

IMHO - If the condo-hotel units are built in front of the existing hotel then the location will be acceptable.  If the units are built beside or behind the existing hotel, then I'd think twice before spending these mega-bucks.


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## blackjack (Nov 27, 2007)

I just spoke with someone from RC and she advised me that the units will be ready by around feb 08. These are renovated existing hotel units. I am really interested in thus however, I was hoping it would build out in 2 years so I can get financing together. Perry, do you think this is a good real estate investment? Do you think it is possible to buy it and turn around an make money on it in a short time? TIA.


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## Steamboat Bill (Nov 27, 2007)

blackjack said:


> Do you think it is possible to buy it and turn around an make money on it in a short time? TIA.



Yes, it is possible, but this is very risky...unless you can afford to spend more then 50% of the purchase price.

Maui may be different than other areas in terms of demand. But this is no slam dunk in the context of the present real estate market situation in the USA.


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## Lawlar (Nov 27, 2007)

*RE Investment*

Today's L.A. Times had a front page article that quoted economists who believe that RE (in Los Angeles) will decline 15 to 25% in the next two to three years.  Other economists suggest we may go into a recession.  I've seen Hawaii property values have declined in the 90s recession.  

I think this is a dicey time to "invest" in hotel-condo properies in Maui.

I would hang onto my money until you can pick up some real bargains. Codos in L.A., Phoenix and Florida will get really cheap in the next few years, and you can buy the whole unit (not just weeks or months) for a fraction of what you will pay for the Ritz.


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## PerryM (Nov 27, 2007)

blackjack said:


> I just spoke with someone from RC and she advised me that the units will be ready by around feb 08. These are renovated existing hotel units. I am really interested in thus however, I was hoping it would build out in 2 years so I can get financing together. Perry, do you think this is a good real estate investment? Do you think it is possible to buy it and turn around an make money on it in a short time? TIA.



I'm not into flipping condos, but if you ask is this a great opportunity to buy a Ritz and hold it 20 years and then just retire with the proceeds - yes.


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## PerryM (Nov 27, 2007)

Lawlar said:


> Today's L.A. Times had a front page article that quoted economists who believe that RE (in Los Angeles) will decline 15 to 25% in the next two to three years.  Other economists suggest we may go into a recession.  I've seen Hawaii property values have declined in the 90s recession.
> 
> I think this is a dicey time to "invest" in hotel-condo properies in Maui.
> 
> I would hang onto my money until you can pick up some real bargains. Codos in L.A., Phoenix and Florida will get really cheap in the next few years, and you can buy the whole unit (not just weeks or months) for a fraction of what you will pay for the Ritz.



Relying on "experts" who make a few bucks writing articles for the Drive-By Media is dubious at best.  The Drive-By Media is hell bent on destroying our country with negative propaganda - I see it daily.  Listening to these clowns would have you selling all your earthly possessions and living in tents.

What is their track record?  How many predictions have they made in the past 10 years and their accuracy?  Of course they won't supply that info since their predictions would be lucky to be 10% correct.

Do your own research and for Maui they just don't create new land and the Hawaiians, at least the ones on Maui, are fanatics at keeping developments to as few as possible.  Maui is the #1 island in the world to visit.  It has averaged 9% appreciation compounding every year for 35+ years.  Occupancy is 85% over the year, rental rates keep going up.

What's not to like?


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## travelguy (Nov 28, 2007)

PerryM said:


> Relying on "experts" who make a few bucks writing articles for the Drive-By Media is dubious at best.



As opposed to relying on "experts" like Perry and I who post on the net???


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## travelguy (Nov 28, 2007)

*Flipping out!*

I believe that now may be the most dangerous time in recent history to consider "flipping" any type of real estate.  The recent correction in the equities markets, continued stability in the commercial real estate market and upheaval in the credit markets have created a bounty of medium and long term investment opportunities.  

In the near term future, cash is king and great credit rules!


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## PerryM (Nov 28, 2007)

*Eric is right...*



travelguy said:


> As opposed to relying on "experts" like Perry and I who post on the net???



I don't pretend to be an unbiased expert - the Drive-Bys do pretend to be "reporters" and have no agenda to push - they all have one and that's the buildup of the US government; to them government is good and people are evil.



travelguy said:


> I believe that now may be the most dangerous time in recent history to consider "flipping" any type of real estate.  The recent correction in the equities markets, continued stability in the commercial real estate market and upheaval in the credit markets have created a bounty of medium and long term investment opportunities.
> 
> In the near term future, cash is king and great credit rules!




There is but one way to make money investing: "*Buy low and sell high*".  You buy low when the "experts" say it's time to sell, and you sell when the "experts" say it's a great time to buy.


We all know that the "experts" are simply spewing out feelings that always turn out to be wrong.  (Hello 2 years of hurricane forecasts that were totally wrong)

I see this all the time;  take Global Warming, 20 years from now people will snicker at the foolishness going on right now.  Right now people are bad and government is the solution - that's always the answer to folks who work for the Drive-By Media.  Mark my words on this.


It's funny but when my son was 6 years old (15 years ago) he used MS Word to make me a sign that is still on my wall and I look at it each day:

BUY LO - SELL HI

To: daddy from: Eric

Eric is a genius.


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## travelguy (Nov 28, 2007)

PerryM said:


> I don't pretend to be an unbiased expert - the Drive-Bys do pretend to be "reporters" and have no agenda to push - they all have one and that's the buildup of the US government; to them government is good and people are evil.
> 
> 
> 
> ...



Ah ... not sure what all that means but it sounds like I better line my hat with tin foil to protect from the government's mind-control rays and their covert evil agents, the reporters.  

Anyway, the one part I do understand is the "buy low and sell high" part.  In fact, I attempt to practice that myself.  The issue is WHEN is "low"!  With almost universal predictions of lower real estate values and the loss of liquidity in the credit markets making buyers scarce ... "low" is yet to come.  I'm not sure that fractionals and condotels were a smart investment BEFORE the bubble burst and I definitely wouldn't touch them now.  My advice is to short "low".


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## PerryM (Nov 28, 2007)

*No one can forecast the future...no one...*



travelguy said:


> Ah ... not sure what all that means but it sounds like I better line my hat with tin foil to protect from the government's mind-control rays and their covert evil agents, the reporters.
> 
> Anyway, the one part I do understand is the "buy low and sell high" part.  In fact, I attempt to practice that myself.  The issue is WHEN is "low"!  With almost universal predictions of lower real estate values and the loss of liquidity in the credit markets making buyers scarce ... "low" is yet to come.  I'm not sure that fractionals and condotels were a smart investment BEFORE the bubble burst and I definitely wouldn't touch them now.  My advice is to short "low".



Ok, for those of you who don't have a tin foil hat I will interpret:

DO EXACTLY THE OPPOSITE OF WHAT THE TALKING HEADS SAY!


If the talking heads knew what they were talking about they would have their own hedge fund and charge at least $1 M to enter and then you would sign a NDA and agree to not know what was going on.  Hopefully you get a fat check in return.

Free markets are emotionally driven and that is what the folks on TV pick up - the market is up today so they find some news article to offer as proof of their brilliant conclusion why the market went up.  Same in down markets - they scrounge around and find the worst story of the day as the reason the market went down.  However in all cases people are the villains and government must curtail the impulses of greed and fear.

The market is, in reality, very random.  But one thing is certain, most people like to do things with the crowd - if the crowd is selling real estate then they sell, if the crowd is buying real estate then they buy.  This is 180 degrees out of phase of what should be done.

Real estate is meant to be bought and occupied - either you occupy it or find a renter who will pay.  After you have owned the unit long enough you may find other investment opportunities and sell the unit.  Timing the real estate market is something I can't do and I know of no one that can.

My advice to everyone is to turn off the talking heads - they have an agenda and it ain't forecasting the future - they can't do it.

Stocks on the other hand are meant to be bought and sold in the blink of an eye.  Once the corporation Initially issues the stock certificates and get's its money the greed and fear of the market determine its value on any day.

P.S.
I saw Trump on TV the other day and he is buying, buying, and buying.  He said this:

"I'm buying right now since people seem to want to sell to me at a low price, and I will then sell when people want to payer high prices - It's all very simple".

If you've listened to Trump on the Apprentice TV show can't you just hear the inflection in his voice in those words?


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## Elsway (Nov 28, 2007)

Goldman Sachs performed a regression analysis using data going back to 1972 - they concluded that nationwide housing prices remain about 14% over valued.  Their analysis regressed home prices against disposable income and long term interest rates.  Housing inventories are off the chart high and foreclosures are adding to unsold inventory levels.  The peak reset period for adjustable rate mortgages is March 2008.  This will result in another wave of foreclosures - further pressuring prices.

FYI - the last housing recession in Hawaii began in 1994.  Prices declined 16% before bottoming five years later.

Hawaii may benefit, to some extent, from a stronger yen.  The Japanese have better affordability now that the yen has strengthened against the US dollar.

Do not, under any circumstances, buy in California for the next couple of years.


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## PerryM (Nov 28, 2007)

*Don't forget Vegas....*



Elsway said:


> Goldman Sachs performed a regression analysis using data going back to 1972 - they concluded that nationwide housing prices remain about 14% over valued.  Their analysis regressed home prices against disposable income and long term interest rates.  Housing inventories are off the chart high and foreclosures are adding to unsold inventory levels.  The peak reset period for adjustable rate mortgages is March 2008.  This will result in another wave of foreclosures - further pressuring prices.
> 
> FYI - the last housing recession in Hawaii began in 1994.  Prices declined 16% before bottoming five years later.
> 
> ...




Regression analysis is simply finding a line thru a bunch of points - throw 10 darts at the wall and find a line that fits and try to draw a conclusion - it's meaningless unless you believe that the future is a duplicate of the past - its not.

Forecasting the future is just a guess - guessing that a straight line will continue and the future data points will group around this is simply a Wild Ass Guess (WAG.)


We bought our first Hawaiian property in 2000 as the Internet bubble was bursting and the Japanese fiasco was ending.  I simply saw that homes/condos were cheaper in Maui than the same units 3 miles from the ocean in Florida.  We bought instantly.  I warned many associates that the 45 degree regression line of the DJIA was way overdo for a correction.


Is Maui overvalued this second?  Is the stock market overvalued this second?  I'm bullish on both for the next 20 years.

And that's always the trick to investing - picking the time frame you want to invest.  If you pick 20 years than just about ANY stock and ANY real estate investment right now is a good bet to buy.

If you are using shorter term time frames like flipping in 1 year then I'd just go to Vegas and blow the money there....


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## blackjack (Nov 28, 2007)

Thank you all for your input!


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## pwrshift (Nov 29, 2007)

Had another call from the Maui Ritz guy today.  Was surprised he said that it's now easier to sell them to Canadians than to Americans right now due US concerns over the stock market insecurity and real estate concerns ... and to the Canadian dollar up 23% this year - now at $1.02 (it was $1.10 2 weeks ago) and may go higher.

Brian


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## Kazakie (Dec 16, 2007)

*visited the Ritz in January 07*

We visited the Ritz in January 07 and found the site is less than ideal.  Pretty far from the water (not beach, just water) and a golf course and commentary in between.  It is very-very windy and was told it's often like that (and why there's spectacular waves down by the dragons teeth).


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## travelguy (Dec 17, 2007)

Kazakie said:


> We visited the Ritz in January 07 and found the site is less than ideal.  Pretty far from the water (not beach, just water) and a golf course and commentary in between.  It is very-very windy and was told it's often like that (and why there's spectacular waves down by the dragons teeth).



Exactly correct. See my post #10 above.

For us, there are many other options on Maui that are better than this high-priced location.


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