Discover the Hawaiian tradition of collective ownership and how modern hui structures are enabling locals to build wealth and keep Hawaii's real estate in the community.
What is a Hui?
A hui is a Hawaiian word meaning "group" or "collective." In the context of real estate and finance, a hui represents a group of individuals who pool their resources together to achieve a common goal—typically the purchase or development of property. This ancient Hawaiian practice has roots in communal land management and resource sharing that dates back centuries.
Historically, huis were informal agreements among family members and community members to share land, crops, and resources. In modern Hawaii, the hui concept has evolved into a more formal structure for real estate investment, enabling locals to compete with outside investors and maintain ownership of Hawaii's precious land.
Key Principle: A hui is fundamentally about collective power. By combining capital, knowledge, and networks, a group of individuals can accomplish what would be difficult or impossible alone.
Today, huis take many forms: informal family partnerships, formal investment syndicates, community land trusts, and fractional ownership groups. Each structure serves different needs, but all share the core principle of collective ownership and shared decision-making.
Why Hui Matters in Hawaii's Real Estate Market
Hawaii's real estate market presents unique challenges that make the hui model more relevant than ever. The median home price on Oahu exceeds $1.1 million, while median household income is approximately $85,000. This creates a significant affordability gap that locks out many local families from homeownership.
Additionally, outside investors—from the mainland and internationally—have been purchasing Hawaii real estate at unprecedented rates. Between 2010 and 2020, the percentage of properties owned by non-residents increased significantly, threatening the cultural and economic fabric of Hawaii's communities.
$1.1M+
Median home price on Oahu
12.9x
Price-to-income ratio (vs. 3-4x national average)
40%+
Properties owned by non-residents
A hui structure addresses these challenges by enabling locals to pool capital and compete with outside investors. Instead of one family needing $1.1 million, a hui of 10 families might each contribute $150,000-$200,000, making homeownership or investment property ownership achievable.
Types of Hui Structures
Modern huis take several forms, each with different legal structures, tax implications, and governance models. Understanding the differences is crucial for choosing the right hui structure for your goals.
Family Hui (Informal Partnership)
The simplest form, typically involving family members pooling resources to purchase a property. Often structured as a tenancy in common or joint tenancy.
✓Low legal costs and minimal paperwork
✓Easy to establish and manage
✗Limited liability protection
✗Potential family disputes without clear agreements
Investment Hui (LLC or Limited Partnership)
A formal legal entity where multiple investors pool capital to purchase and manage investment properties. Structured as an LLC or Limited Partnership with clear ownership percentages and governance.
✓Liability protection for members
✓Clear governance and decision-making processes
✓Professional tax treatment
✗Higher legal and accounting costs
Community Land Trust (Non-Profit)
A non-profit organization that holds land in trust for the community, ensuring permanent affordability and community control. Members have limited equity but strong community benefits.
✓Permanent affordability protections
✓Tax benefits and potential grant funding
✓Strong community mission alignment
✗Limited individual wealth building
Fractional Ownership Hui
Multiple individuals own fractional shares of a single property (typically luxury or vacation property). Each owner has deeded ownership rights and can use the property according to the agreement.
✓Access to luxury properties at lower individual cost
✓Shared maintenance and management responsibilities
✗Complex coordination and potential scheduling conflicts
✗Difficult to exit or sell fractional shares
Getting Started with a Hui
If you're interested in forming or joining a hui, here are the key steps to consider:
1
Identify Your Goal
Are you looking to purchase a primary residence, investment property, vacation home, or build community wealth? Your goal determines the hui structure.
2
Find Your Co-Investors
Identify family members, friends, or community members who share your investment goals and values. Trust and alignment are critical.
3
Consult Legal & Financial Advisors
Work with a real estate attorney and CPA to structure the hui properly, considering tax implications, liability, and governance.
4
Create a Hui Agreement
Document ownership percentages, decision-making processes, exit strategies, and dispute resolution in a formal agreement.
5
Secure Financing
Work with lenders to structure financing for the hui. Many lenders have experience with hui structures and can guide the process.
6
Find Your Property
Work with a real estate broker to identify properties that meet the hui's investment criteria and timeline.
Ready to Learn More?
Connect with our team to discuss hui structures, financing options, and how to get started with your real estate hui.