Just because condo-hotels are the new hot investment doesn’t mean I want one. Geeze, I’m still learning what a condo-hotel is…well, let me tell you what I found and maybe both of us will own one of these instead of me just jabbering about it:
Major hotels have in recent years taken certain properties and converted them to condo hotels aka: “condotels, condohotels, condo hotels”.
A trusted friend and client of mine (who just happens to be a CPA and works for a large condo development company), recently visited my realtor partner up in Orlando. Within hours they’re both emailing me asking for financing on the Wyndam Hotel which has just converted to a condo-hotel.
I think: “easy enough no problem here”, and that’s when the learning began.
When it comes to financing condo-hotels, it’s all about square footage. If the property is larger than 400 square feet, you’ll find lenders standing in line to give you their best mortgage offerings. Under 400 square feet is a different story.
I decide that there must be a quality lender out there to fill the gap so I begin the “google safari”. After some 2 hours, I finally find a quality lender who has a program with no square footage requirement.
So, now we have a lender who will finance the 350 square foot condo-hotel. What are the remaining guidelines so a person doesn’t end up at a closing table not able to finalize their paperwork due to an oversight. To quote Paul Harvey, here’s “the rest of the story”:
- No Minimum Square Footage
- Credit score must be at least 620
- Seller Assists to 9%
- Max Loan Amount $650,000
- No pre-payment penalties
- Max borrower debt ratio 45%
- Fully documented income 10% Down Payment
- Stated Income and No Income Ratio require 20% Down Payment
- Non documented income 25% Down Payment
- Piggyback 2nd Mortgages not allowed
- Kitchens/Kitchenettes not required
There you have it. Investments in smaller square footage condo-hotels are popping. Find the one you want, make sure it meets the above requirements, and we’ll make you the best mortgage offerings.
Here is a list of condo-hotels in Miami. There are also some exciting properties being converted in Orlando. Stay tuned. We are in the process of putting together a list of the best investments up there.
About my friend who was buying in Orlando, he’s not a “happy owner”. Fact of the matter is that he’d recently purchased (2) condo properties in Tampa/St Petersburg and neither had rented yet so he was over the debt ratio requirement of 45%. Don’t worry though, if I know him, as soon as his vacant properties are occupied…that boy will be owning himself a condo-hotel.
• Orlando hotel converstions and Condohotels