Village of Imagine, Orlando

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?

WannaB -

My pleasure to help. A good comparison might be Mariner’s Club Bahia Beach. It is a beautiful resort with several types of type of buildings. One is a condo/hotel.

Be careful with vacancy rates. In the scenario you proposed, it seems that there are different types of units. Have you considered the desirability of your particular model? In other words, data may show that vacancy rates can be 10%, but what if its always your style of unit that is vacant?

I would also want to the difference in rental fees between your unit and others. For example. If you have a 1 bedroom 1 bath that rents for $200 per night, but the 2 bedroom 1.5 bath rents for $230 a night…folks might fork over the $30 bucks and get a larger space.

As for your comparison to a home. A few thoughts: I have the same issue - homes don’t cashflow easily due to low rents. You really have to look. However, in many areas of Florida appreciation can be generous enough to really make up for a low cashflow or break even deal. Plus, folks are always shopping for homes. Even in a softer market buyers need a place to live and a great looking property has emotional pull (very lacking in condo/hotels).

In the end, you have to determine what excites you and what works for you. Lots of money have been made in pre-construction. Condo/hotels feature a few too many blind spots for my taste, but in the end you take that leap alone. :slight_smile:

Cheers,