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Thanks Scott,

I am assuming that funding would apply to whole ownership as well.

I would certainly be interested in finding out a little more about the requirements that you would be required of such an application.

My company designs and builds Internet based applications for the property management industry, however, the area we have been focusing on up to this point is short term vacation rental management.

The product we are currently selling is an accounting and communication module for condo hotels and fractional properties. We have over 2000 individual owners that access our system for financial statements, documents and other.

I am always looking for new lucrative markets to design software for, and perhaps, this isn't 2 far from what we already have...and then again...maybe it is.

What should a good package offer?

Regarding Refinancing a Condo Hotel unit.

I spoke with the president of a realty company this morning in Florida that specializes in Condo-Hotel properties, and asked the question about refinancing.

He made these comments.

I think this goes without saying, but, obviously the first thing is working with a realtor that completely understands the market. There are a number of lenders that specialize in condo-hotels, so based on your requirements, the realtor would be able to make a recommendation.

Assuming that your credit is in good standing, there is no reason why you shouldn't be able to refinance your unit. That said, as I am sure you are all aware, the industry has tightened up over the last few months, which is affecting everyone right now.

Hi John,

That is a good question about refinancing and at this time I don't have a solid, clear answer for you, but I will do my best to find out.

I DID do a quick google search on refinancing a Condo-Hotel unit, and came up with the following hit from a company in Georgia (Can't post the link due to my newbie status, but I wll quote the info and you can get the site from google search "refinancing condo hotel").

******* Begin Quote ********

up to 90% LTV and $650K on a Condotel Purchase coupled with COMMONSENSE UNDERWRITING and a FAST CLOSE ... could it be any better?

Specifics are:

Size 350 square foot condotel or larger, kitchen must have a cooktop.
Occupancy Owner Occupied, Second Home, Investor
Interest Only Option Up to five (5) years interest only, then P&I for the remaining 25 years REQUIRES MI
LTV Limits Owner Occupied, Second Homes, 90%
NO MI
LOAN Limits $1.25 Million
Credit Score Requirement: 760
International Borrowers are eligible for this program @ 80%

Close your Daytona Condotel in an LLC - Requires Personal Guaranty; Does NOT report to personal credit unless there are lates or default

--------------------------------------------------------------------------------

80% LTV for condotels if credit scores 640 - 759

--------------------------------------------------------------------------------

No prepayment penalty

******** End Quote ********

With regards to commercial or residential status, that depends on where the property is located and how often you stay in the property. DISCLAIMER: Now, what I am going to write next shouldn't be taken for absolute certainty...obviously you would want to verify this with a finance specialist (and that I am not).

In Florida for example, if you rent out a vacation property for fewer than 15 days in a given year, the property is considered a personal vacation home, regardless of the amount of personal use. Mortgage interest and property taxes are deductible, but other expenses are not.

If you rent out a vacation property for at least 15 days in a given year and your personal usage is limited to 14 days or 10 percent of the time it is rented (whichever is greater), then the property is considered rental property so you receive the following benefits:

- All business expenses (including mortgage interest, property taxes, insurance, advertising, and maintenance) can be deducted against rental income received on the property
- If the total expenses are less than the gross rental income, the resulting profit is taxable income
- If the total expenses exceed gross rental income, the resulting loss can be used to offset income from other investments

From a fractional perspective, how many days it is available for rental obviously depends on the number of fractions that have been allocated. I have worked with properties that had as many as 17 fractions per unit (and one had 34 fractions per unit) . That is only 3 weeks per year, so the property is going to have to running very high occupancy in order to meet that 15 day min.

Here are some other criteria that lenders will look at when considering a property.

Minimum of "x" square feet
In proximity to vacation/resort area
Separate Kitchen Space, Bathroom and Living Area/Bedroom
Kitchen to be equipped for food preparation
Voluntary rental pools

Finally, with the real estate market undergoing a bit of an adjustment there likely will be more information available on default or foreclosures in the upcoming year.

Since Condo-Hotels (whole ownership and fractional) are considered second homes they tend to be viewed as a riskier investment from a mortgage broker's point of view. Because of that, they typically require at least 20% down, and it can be higher.

If you are looking at a pre-construction property (which there are many of these days), then the deposit is usually due in stages with the final payment coming when the project is completed.

There are advantages to getting in on the preconstruction phase, and that is usually when you will get a best price compared to completion, however, you really need to make sure you do your research on the developer and property to make sure they have the resources and track history to complete and manage the project.

A contact with Starwood Development recently told me know that they have a number of projects under way right now in North America including Seattle, Scottsdale and Wailea to name a few. A lot of Starwood Development's key people have come over from Intrawest Placemaking so they do have the resources and experience in this industry to develop successful projects. It may be a company to keep an eye on if somebody wants to get in on something early.

HI James,

I am glad that I found this forum, and it looks like many of the people that use it have knowledge to share so I will definitely be getting something from it.

I posted a short blurb about condo-hotels in the commercial forum, and will certainly do my best to asnswer any questions that come up.

Thanks

What is a Condo Hotel, and are they good investments?

I guess that depends on whom you talk to.

I have been involved with Condo Hotel for many years; In business relationships with companies that manage them, and also as a unit owner and investor.

For the most part, I have been really, really happy with my investments, but like most people playing the real estate game, I have made some mistakes.

But that is for another topic. Let me tell you why I like Condo-Hotels.

I travel a lot, often to the same destination over and over again. I also love certain activities (skiing, snowboarding, mountain biking to name a few). Because the properties I have chosen are in destination resorts, they suit my lifestyle and have worked out really well.

But what exactly is a Condo-Hotel? In a nutshell, a Condo Hotel (or Condotel as they are know in the industry) is a hotel where each unit (typically a suite) is individually owned, and when you are not staying in the unit, it is rented out to the paying public on a nightly basis.

If you have ever stayed overnight in a ski resort, or a popular tourist destination in Florida, Hawaii, or Las Vegas, you may even have stayed at a condo-hotel. And if you did, someone earned part of the rate that you paid.

Condo hotels evolved an alternative to time-shares during the 1990’s and there are now 100’s of properties located throughout North America under brands including Hilton, Four Seasons, Clarion, and Ritz-Carlton. Even Trump has a few properties currently operating or under development.

Despite the fact that the property is in a hotel setting, a condo hotel is considered a private residence, and owners are eligible for mortgage interest deductions and other tax advantages that come from owning a second home. However, most properties do not allow you to live in the unit year round. This is because the management company does want to rent the unit when you are not there, so both parties can profit from the rental income.

Each condo hotel property has its own residence restrictions that indicate the maximum amount of time you can live in the property. This is an important piece of information to consider before purchasing a condo hotel unit. Most owners do not intend to live in their condo year round, so this is not a concern in typical circumstances but insure you are aware of potential restrictions before your purchase.

Anyway, if anyone has any questions about condo-hotels or fractional properties, please post them here and I will do my best to give you a prompt, reasonable answer. You can also click on the link in my signature below for more information and tips.

You can do a google search on bc for sale by owner (I can't list the website as I am new to this forum.

You can also try the Vancouver Sun, or Vancouver Province websites. There may be a couple of listings in there.

Also try searches for the city newspapers including Burnaby, New Westminster, Richmond, Surrey, etc.

Good luck

Hi John,

Forums sure have come a long way since I last used them (OK, I am dating myself now). Still working on the settings :-)

I go by the name of Frank.

Hi there,

Yes, I work with Clients throughtout North America and the Carribbean.

Frank