What do you look for in Preconstruction deals?

[Garrick Solberg]

Hey all,

My family is currently developing a condotel building and getting ready to start selling preconstruction contracts. This actually isn't an advertisement for it in any way, as the lawyers say that we can't discuss numbers at all since it is all projections. Why anyone would buy an investment without any kind of numbers to work with baffles me, so I'm trying to find out a way to make it possible. But that's another issue entirely.

Anyway, I will not disclose the project because I want to discuss the forecasted numbers that we have at this time. The condotels are actually 3 hotels with a "key" system so they can be used as a big condotel or separately as standard hotels. The price for each condotel is 450k with a 56k revenue to the owner each year. Insurance, maintenance, management is all handled by the property and is already calculated in to come up with the 56k number (based off of 60% occupancy). We're still talking to lenders right now, but its likely that the bank will want 20% downpayment for each condotel.

So, if you were a potential investor, what information would you be looking for and also would you find the numbers I stated as a desireable investment? Thanks!