| The SEC has legitimate concerns about some | | | | purchase a condo hotel, are told to consider it |
| condo hotel developers selling units in their | | | | just as simple real estate. To attempt to ignore |
| projects based solely on the 'forward looking | | | | the rental income potential and make their |
| investment potential'. If developers were left | | | | purchase more like a second home or vacation |
| unchecked, with a pile of spreadsheets touting | | | | residence. But the income potential is still a large |
| income potential, every condo hotel unit in the | | | | part of the decision. When the consumer is told |
| country might cash flow at remarkable levels, on | | | | by the real estate sales representation that they |
| paper, and every small real estate investor would | | | | cannot in any way discuss income or income |
| have a PhD in condo hotel lingo. This is the fear.I | | | | potential, time and again the consumer feels |
| believe we are not giving the consumer enough | | | | something is being withheld. I have witnessed as |
| credit, but I understand the fear. ADR, | | | | the potential condo hotel buyer asks "why?"The |
| Occupancy, RevPar, the language of the | | | | consumer deserves an open dialog about risks |
| hospitality industry can appear sexy at first | | | | and rewards in condo hotel ownership. Attempts |
| glance. Nightly rates, rack rates and Average Daily | | | | are being made to create a firewall between real |
| Rate (ADR) can vary widely. Occupancy at a | | | | estate sales and hotel rental management |
| hotel has so many variables. Hotel management is | | | | departments but it is still disjointed and spooks |
| one part science, and one part art, but it is all | | | | consumers trying to understand their purchase |
| business. Real estate salepeople and developers | | | | decisions.As CPAs, financial advisors, bankers and |
| are not licensed to sell business interests and this | | | | other trusted consultants better understand this |
| is the crux of the dilemna.SEC rules require that | | | | new real estate product, its potential and risks the |
| securities or business interests are sold with | | | | gap in the information for the consumer can be |
| complete and proper disclosure, but disclosure is | | | | bridged.Bob Waun |
| such a slippery slope. Afterall so many other real | | | | CEO |
| estate properties are sold for their investment | | | | Vacation Finance |
| potential, like apartment buildings and warehouses, | | | | Vacation Finance, America's First Second Home |
| why are condo hotels treated more | | | | Lender is an innovator in condo hotel mortgage |
| conservatively?Consumers, while on vacation, buy | | | | lending and has been a leader in educating |
| condo hotel, not savvy seasoned investors. Again, | | | | consumers and developers in the risks and |
| I think we are giving the consumer far too little | | | | rewards of this new product. |
| credit and information.Consumers who look to | | | | |