Hotel Viridian on corner of 30A & 395 - Seagrove Market location

Re: Seagrove Construction Question

They call them CONDOTELS. In a nutshell, the developer builds a "hotel" and sells the hotel rooms to "investors." The "investors" get to use their "room" from time-to-time and in between uses, the hotel's owner rents out the room to guests, contracts the maid/linen service, and manages the property--all for a percentage of the amount they take in on the rooms "if" they ever get rented during the year. There's also the expense of the upkeep of furnishings and amentities as dictated by the establishment. If you happen to "invest" in a room that is next to the ice machine or over the air conditioner units, you may not have the rental traffic the developer "suggested" you might have and your "investment" will turn out being "Enron by the Sea." Condotels are pretty much the biggest real estate gip going--lots of fine print, lots of wherefores and therefores....marketed to folks who know no better.

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What an idea, the developer sells the hotel rooms where the owner will finance, insure, furnish, repair and other associated condo like costs. While the management company makes money off room service, a percentage off the top for renting your room and whatever charges they can profit from. Hey, insurance increase, the owner pays it, negative cash flow to the owner, that's life. 😱

Re: Seagrove Construction Question

What an idea, the developer sells the hotel rooms where the owner will finance, insure, furnish, repair and other associated condo like costs. While the management company makes money off room service, a percentage off the top for renting your room and whatever charges they can profit from. Hey, insurance increase, the owner pays it, negative cash flow to the owner, that's life. 😱

It was a good idea during the frenzy when so many "investors," suffering from recto-cranial inversion, bought up anything remotely resembling real estate...now dot.condos are a pretty hard sell and even harder to finance--especially now that commercial banks have been smacked on the snoot by the Fed.

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Re: Seagrove Construction Question

It was a good idea during the frenzy when so many "investors," suffering from recto-cranial inversion, bought up anything remotely resembling real estate...now dot.condos are a pretty hard sell and even harder to finance--especially now that commercial banks have been smacked on the snoot by the Fed.

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:floor: :floor:

Seriously, though, glad these "opportunities" are being exposed for what they are ... sweet deals for the developers and managers and little else. Glad they are now a hard sell. I hope the owner finds other things to do with that parcel, if he feels that he must.

Re: Seagrove Construction Question

They call them CONDOTELS. In a nutshell, the developer builds a "hotel" and sells the hotel rooms to "investors." The "investors" get to use their "room" from time-to-time and in between uses, the hotel's owner rents out the room to guests, contracts the maid/linen service, and manages the property--all for a percentage of the amount they take in on the rooms "if" they ever get rented during the year. There's also the expense of the upkeep of furnishings and amentities as dictated by the establishment. If you happen to "invest" in a room that is next to the ice machine or over the air conditioner units, you may not have the rental traffic the developer "suggested" you might have and your "investment" will turn out being "Enron by the Sea." Condotels are pretty much the biggest real estate gip going--lots of fine print, lots of wherefores and therefores....marketed to folks who know no better.

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Your definition of a condotel is a little misleading. A project does not have to look like a hotel or act like a hotel in order to be a condotel. Typically, the property is defined that way if there is an on-site check in area and the property can be rented on a nightly basis. In many different locales, there are condo developments that are classified as condotels that have owner occupied units, units that do not belong to the rental programs, units that are rented/managed by the owners themselves, and also units that do long term rentals.

Condotel properties are not limited to 'hotel rooms' either. Many properties classified this way have units from studios to 4 and 5 bedrooms.

If an owner chooses to participate in a rental pool, then the things you say might apply in some form or another depending on the property. I'm sure there are some terrible deals out there and of course buyer beware, but all condotels are not alike. The classification of the property by itself does not make it a 'gyp'.

Re: Seagrove Construction Question

For what its worth, I noticed the engineering firm for Hotel Viridian had filed a lien against the developer for work done last year that was not paid for.

Re: Seagrove Construction Question

For what its worth, I noticed the engineering firm for Hotel Viridian had filed a lien against the developer for work done last year that was not paid for.

Is this public record? If so, where did you find it?

Re: Seagrove Construction Question

Is this public record? If so, where did you find it?

liens are public records and can be found in the Clerk of Courts. Attached is the lien to which joefromseagrove refers.

Re: Seagrove Construction Question

New rule...every developer must post their plans on sowal.com and we will vote yes or no.

Re: Seagrove Construction Question

Your definition of a condotel is a little misleading. A project does not have to look like a hotel or act like a hotel in order to be a condotel.

In the case of the Hotel Viridian, it was planning on selling 28 hotel rooms (their words, not mine) and 10 condos. And you are right when you state that not all condotels are the same--some have even been known to pay their contractors for sevices rendered. <rimshot>


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Re: Seagrove Construction Question

In the case of the Hotel Viridian, it was planning on selling 28 hotel rooms (their words, not mine) and 10 condos. And you are right when you state that not all condotels are the same--some have even been known to pay their contractors for sevices rendered. <rimshot>


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I can't comment on Hotel Viridian as I am unfamiliar with that project, but your statement was pretty much a blanket trashing (as far as I read it) of condotel's in general, such as 'Condotels are pretty much the biggest real estate gip going--lots of fine print, lots of wherefores and therefores....marketed to folks who know no better. That statement shows a basic lack of knowledge of the property type. Project classification is only one factor involved in the investment value of a property. People have been known to buy a property classified this way and use it as a primary residence, therefore not even being a part of your 'investor' scenario.

Our condo at High Pointe was technically a condotel when Abbott Resorts check in office was on site. That office is no longer a part of the project so the property probably would no longer be classified that way. Either way, that project and hundreds of others are nothing like the statements you used to define a condotel.

Re: Seagrove Construction Question

This is all very interesting. :cool:

Re: Seagrove Construction Question

Don't even bother with condo-hotel

February 9, 2007
Dear Mr. Berko: I missed an opportunity to purchase a condo-hotel in Fort Lauderdale last April because I didn't have enough money for a down payment. Now I have the money because we sold our interest in a farm, which my brother and I inherited from our parents three years ago. I'm looking at this beautiful condo-hotel in Las Vegas with gorgeous grounds, top-grade construction, huge sparkling pool, beautiful lighting, magnificent appointments and a spacious entrance lobby that looks like something from an MGM extravaganza.

The cost is $690,000 and I'd put $70,000 down. My wife and I would live there three or four weeks a year and the hotel would rent our unit between $250 and $300 a night when we are not there and they'd keep 50 percent of the take. This is a hot market and I could probably sell it (it's 680 square feet) at a good profit a year from now. The condo-hotel concept is the fastest growth segment of the real estate market and I want your thoughts on this investment before I invest.

B.R.
Elkhart, Ind.


Dear B.R.:

Condo-hotels ... ugh -- and at $1,000 per square foot! I marvel at the consummate gullibility of a trusting, easily exploitable and greedy American consumer.

While I don't offer guarantees, I'm going to make an exception in your case and give you an outright guaranteed maybe that today's value of this condo-hotel in Las Vegas will be a heck of a lot less when you try to sell that property six months or a year later. I will also give you an absolute guaranteed maybe that your interest costs, insurance expenses, maid service, condo fees, real estate taxes and maintenance can exceed, by orders of magnitude, the rental income you want to believe you will earn.

I will give you a definite guaranteed maybe that, while annual hotel occupancy rates average 75.3 percent, the yearly occupancy rate for your condo-hotel unit will not exceed 40 percent. I will offer you as well a solid, guaranteed maybe that the rental income you naively believe you'll get will be enormously lower than your expectations. And I'm giving a straight-out guaranteed maybe -- even if your condo-hotel unit has a 75 percent occupancy rate -- that your rental income will fall steeply short of your rental expenses and at the end of the year, you will have a bleak, black tax loss.

If you try to sell that absurd investment a year later, I doubt that you will get 70 percent of your money back. I don't know of a single, living soul whose rental income from a condo-hotel exceeds expenses. The phenomenal rate at which these silly things are being converted or built in popular hot spots around the country reminds me of the boom/bust cycle in the tech stock and dot-com fiasco five years ago and the recent explosion/implosion of the condo-housing market. I think you're looking at a potentially devastating condo-hotel glut in a couple of years that may force a large percentage of these properties into foreclosure.

Before you shell out $690,000 for that glitz, glint, glimmer and gleam, try some common-sense research, which may be difficult. After a $70,000 down payment, you are going to pay 7 percent on a $620,000 mortgage, which is $43,000 in interest costs. Assume that your unit is rented 75 percent of the time (that's a generous assumption) at $275 a night, which is $75,000 a year in rental income. However, 50 percent of that rental income stays with the hotel, so you keep $37,500. Right off the bat, you're $5,500 in the hole. Include taxes ($5,000), maintenance ($5,000), management fees ($4,000), maid service ($10,000), plus insurance ($2,000) and your losses exceed $31,000 a year.

I hope you recall the enthusiastic time-share boom 20 years ago and remember how it went bust with a bang. Tens of thousands of saps and schnooks like you fell for the razzle-dazzle sales pitches, got gulled by sweet-tongued salesmen and signed their names on the proverbial "sucker's line." A year later, when they told their sales agents to sell the property, their agents responded, "To whom?"

I believe that most American consumers would eagerly buy a camel if a clever camel herder could figure out how to sell his camels for $100 down and $50 a month. Heck, Americans have already invested big bucks in herds of buffalo, ostriches, llamas and pot-bellied Vietnamese pigs, so why not a camel or an elephant?

"A sucker is born every minute, and a promoter born every hour to make certain no sucker is spared."

If you buy that condo-hotel in Las Vegas or even one in Miami, Orlando, or Fort Lauderdale, Fla., make sure that your group health policy covers psychiatric care because you're going to need it.

Re: Seagrove Construction Question

Having an on-site management company and a bellhop are two completely different things. A condotel limits the amount of time an owner can spend in his or her unit according to the rules or bylaws if you want to call them that. If it doesn't and still rents by the night, you're still going to have an investor concentration greater than 50% which will make the "condo" unwarrantable in the secondary market. Most banks won't touch condotels with a 10 ft. pole when offering mortgages.

Re: Seagrove Construction Question

:popcorn: :popcorn: :popcorn: