condo hotels

[stevelb]

For what it's worth, the Chicago Sun Times has an article today:  http://www.suntimes.com/output/hlife/hos-news-condo19.html

 

[REWahoo]

stevelb,

Congratulations. You now hold the board record for "Most White Space".

(At least you aren't arguing about whether or not to pull the plug...)

REW

 

[Martha]

The article Steve posted also raises the securities issue:

"The Securities and Exchange Commission considers the condo offering a security if income and expenses from the rental units are pooled and if a condo unit is sold with the explicit expectation the buyer will earn money or derive tax benefits from it. If the development is structured as a security, it can only be sold by a securities broker and it is easier for an investor to sue the developer under the SEC's anti-fraud rules, according to Los Angeles attorney Jim Butler.

Most developers choose not to sell their projects as securities to avoid the SEC complications, so they are prohibited from discussing the economic or tax benefits from a rental arrangement or project on how much a condo unit can earn in rental income. Many buyers make decisions without all the facts."

 

[HFWR]

(At least you aren't arguing about whether or not to pull the plug...)

REW

I think they should have tried reversing the plug...

(For you old farts old enough to remember homes wired without the extra ground)

 

[greg]

It looks like we're in. Housing bubble? There aint no stinkin housing bubble.

Hurricanes? There aint no stinkin hurricanes.

 

[renferme]

Let's see.... 825 X 600 = $495,000 minimum price for a 600 sq ft condo.
A person would have to have their head examined if they fell for that deal !

 

[Martha]

Let's see.... 825 X 600 = $495,000 minimum price for a 600 sq ft condo.
A person would have to have their head examined if they fell for that deal !

The buyers' rationale is that they can get a place on the beach with lots of amenities, fly in on a number of weekends and use it themselves, and when they are not using it, the room is rented as a hotel room by a professional hotel manager. They say why buy a cabin for the same amount in upstate New York, which won't have any cash flow, when they can buy a hotel unit on the beach and actually get some money out of it when it is not being used.

Not something a midwesterner would buy.

 

[renferme]

Is it like a timeshare, where the owner has to pay some ridiculous yearly fee for "maintenance" ? And what could someone expect to net out of having a hotel manager rent the unit on a daily basis when the owner is not using it ?

 

[Nords]

... and when they are not using it, the room is rented as a hotel room by a professional hotel manager.

Dumb question, but how do you know how often the room has been rented out? And how do you verify that additional rents haven't been collected under the table?

 

[Martha]

Nords, I don't know the answer to your question ( though I guess it is the mangement company's problem) but it doesn't really matter to the investment analysis. We buy the project, the condo conversion is completed, the condos are sold, the amenities are sold and the managment contract is sold. Nothing is left and the goal is for all to be sold in a matter of months.

Bennevis, it isn't like a timeshare because you own the entire unit. It is yours. You can join the hotel rental pool and have your room rented out as a hotel room to make some money. Still looking at how the condo fees work.

 

[greg]

[quote Nothing is left



Hey, DW, if there's nothing left, why are we doing it?

 

[Martha]

All that is left is the money in our pocket.

 

[greg]

Thanks, now I get it.

 

[Martha]

 

[HFWR]

Hey, you two get a room!

 

[greg]

Hey, you two get a room!

We're getting the whole darn hotel, with Vichy Showers :

 

[P.S.]

Hey congratulations! And let us know how those showers feel!

 

[cute fuzzy bunny]

We're getting the whole darn hotel, with Vichy Showers :

That sounds even dirtier now...