Lizbuyshouses, the feedback you have provided is right along the lines of what I am looking for. As I mentioned, one of my major concerns is who would buy this thing if it doesn’t even pay for itself? i.e. - The exit strategy as you put it. But then I started thinking, ok, maybe I should just buy a house or a condo and rent that out. Problem is, the area I live in has seen huge real estate gains in the past 3 years…and rent has not increased at the same rate. So it is a renters market. If I buy a house or condo, it will not cash flow either. I will defiantly be subsidizing the mortgage and taxes on the house/condo every month. Mathematically I think one of these hotel/condo units has a chance of at least paying for itself, based on surrounding hotel nightly and occupancy rates.
Another concern I have is, the current fees for each unit are around $5k per year, and the rent split with the management company is 50/50. There really are no details in the paperwork I have received so far mentioning how often and how much these numbers can change. This has more to do with the fact it is pre-construction than anything. But once the place is built and all documents finalized and I own it, who knows if they will be able to change the fee’s to $10k/year and the management split then becomes 70/30.
Do your friends have any feedback on these points?
Do you mind telling me the name of the project or company your friends bought in to and where?