CondoHotels

General Real Estate Investing
1

From my research it looks like the condohotel concept is hot in FL and Las Vegas. I’m almost to the point of analysis paralysis with my due diligence.

Can anyone offer the pros and cons? My objective is to put my 10-20% down, wait for the units to be complete and then flip before closing, pocketing the appreciation. Makes sense to me but is this a viable strategy? Thanks. 8)

2

I personaly think condohotels are a rip-off. I have researched many in the Clearwater beach area of florida.

I have discovered that they are not a very attractive deal for purchasers.

  1. you are forced into a rental pool
  2. you are giving very limited use of the facility (even though you are paying for it)
  3. forced to use the facilities management, which can charge extremely high commissions (60% +)
  4. not guarenteed any rent for your unit. (possibility larger land holders units will be rented over yours)
  5. Very, Very, Very difficult to get a conventional loan from the top mortgage companies with out having to put down at least 30%

The condo-hotel concept is basicly an expesive time share, being pushed by high pressure sales agents. I think that money can be made in these projects. The problem is its not going to be made by you and I. My recomendation to you would be to sit on your money until you have enough to develop your own condotel. Becareful not to get sucked into the greater-fool thoery with these projects. If you want to research more about them check out some of the older projects in honolulu in Oahu, Hawaii. They have been around for some time. You can do a search online and see if any are selling. This is a very high risk low return investment!

3

it’s called speculation, my friend
As far as I am concerned, the market is cooooooling down in FL.

4

In a down market this will be the hardest real estate product to sell. Good luck finding an assignable contract, which will allow you to “flip” if you will…