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The CPR Solution

homes0511_1Condominiumizing a property is often the best option for owners hoping to maximize its use and make it more affordable, and possibly even profitable.

Abe Lee (R), CCIM, co-owner and broker-in-charge of Shirokiya Residential Estates, has completed more than 140 CPR (Condominium Property Regime) conversions in Hawaii over the past 34 years. It’s a complicated process, Lee explains, and the CPR can be structured in many ways, depending on the needs and goals of the client.

“Most commonly, the client owns a single family zoned lot, but plans to redevelop it as a CPR property involving additional units and/or divided ownership. In some cases, I assist in the purchase of a property the client plans to redevelop as a CPR, or even participate in a joint venture,” Lee said.

“When the CPR is handled properly, the outcome is an upgraded property with enhanced value. CPR is often the only way an owner can retain a property in a neighborhood where they want to continue living.

“I recently completed sale of the last available home in our Manoa Lane project, an 89,105-square-foot property at 3585 Pinao St. with 11 homes owned by one family. The property was so overgrown with vegetation that the homes could not be seen from the street. Our firm

bought the property and did the road work required by the city, which cost over $1 million.

“In order to guarantee that the buyers could rebuild the homes, we had to obtain an existing use permit. Because they were considered to be legal nonconforming, the city would not allow them to be rebuilt if destroyed by fire or torn down. We registered the project as a condominium under Hawaii Revised Statutes 514B, which would allow the owners to sell each individual unit. It took about a year and a half to obtain all the permits, and almost a year to sell out the project. Our last closing was just about a year ago.”

Lee said 10 of the 11 buyers are owner occupants, and the investor owner lives in Manoa. One owner has torn down his old house and built a new home. Another owner donated his house to charity and is planning to build a new home soon.

The other owners have painted and remodeled their homes.

“The owners range from single people to young families with children to older retired people. It was an honor to take a property that was in need of repairs and create a beautiful little community that enhances the entire neighborhood,” Lee said.

One of Hawaii’s best known real estate instructors, Lee has been a licensed real estate agent for 40 years and for 30 years has operated the Abe Lee School of Real Estate, which offers CPR courses as well as pre-licensing and continuing education.

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