Special offer

Plaza Resort & Spa in Daytona Beach. What Is The Worst Thing That May Happen To A Condo-Hotel

By
Real Estate Broker/Owner with Daytona Condo Realty, 386-405-4408

Plaza Resort & Spa in Daytona Beach is in the spotlight today. Prices are low, but people still keep asking this sacral question "What is the worst thing that may happen to a condo-hotel?"

I often think that if my buyers could buy a condo-hotel for only one dollar, they would still want to make sure that they can not lose.

PlazaMentioning a dollar has reason. Because the answer really depends on what you paid for it.

Let us take Plaza Resort & Spa as the example. This is right now the only condo-hotel where there is a lot of activity because of the gap between what people paid for units in January-February 2006 and what the units are sold for now.

It is not a surprise, that people, who paid $350K to $400K for a unit in Plaza Resort & Spa, especially if they used a preferred lender with 10% down have to pay $2,500 to $3,200 a month in mortgage payments. When they see that there were unit for as low as $34,500, they clearly understand that they will pay that amount in one year in their mortgage, and they also understand that it may take way more than just a few months to warm up the Real Estate market to the prices of 2006. So, they are stuck. If they keep paying, they will have paid maybe over $100K in monthly mortgage payments, plus they have bought it at the peak of the real estate market, so it is not that waiting will allow them to recoup their investment reasonably soon (add what they bought it for to the mortgage payments), so them dropping the units and walking away is not a surprise.

Surprise is the today's price. But in a slow market people are cautious, and are afraid of jumping even on once in a lifetime opportunities.

So, what is the worst thing that may happen to a condo-hotel? I do not know. However, I assume that disappearance of the building should be this worst case scenario. So, let's consider disappearance. Hurricane is an unlikely candidate, the building initially was erected in 1911, and had a few chances to be blown off, and it is still there. Let's assume that fire renders the building to a pile of rubbish.

At the Pool in Plaza Resort & SpaThere is insurance. I have no idea what is the insurance on a building like that, but I think that there should be a very sizable policy on a property where renovations only ran hefty $70 Million.

Anyway, the insurance is supposed to cover replacement cost, and this should be a significant amount. I know that when a similar thing happened to Rodeway Inn, the insurance proceeds per owner were about $70,000. Rodeway was not a match for Plaza, and I would not be surprised if Plaza Resort & Spa would see double that per the owner.

So, here's the answer. People, who paid $300K will lose, and people who paid $50K will not lose. Maybe this would be less than what they would like to get if they sell at the peak of the market, but at least, they will not lose money.

This is one of the reasons I find buying in Plaza Resort & Spa a bit safer.

So, if you are interested in Plaza Resort & Spa in Daytona Beach, you can get a free phone consultations at 386-405-4408.

Click HERE to see MLS listing in Plaza

FunCoast realty logo

Comments (7)

Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

Jon, your two posts have me wanting to grab for my checkbook.  This does sound like an amazing opportunity.

May 13, 2009 12:41 AM
Virginia Hepp - Mesquite NV REALTOR
Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

I see your listings for 55K or so, seems like they would be selling like hotcakes.  In the Plaza, how does the HOA work?  Is it a flat fee, or varies, what all does it include?   I don't have any money, just interested in your world there.  Here in Mesquite all HOAs are different - some include everything but phone and internet, some include nothing.  Only a couple condo-hotel places here.

May 15, 2009 06:28 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Patricia,

Call me when you are coming.

May 17, 2009 05:44 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Virginia - Maintenance fee is $529 monthly. Covers everything except for the property taxes and liability/content insurance for the unit (major insurance is part of the Maintenance Fee). Split is 50/50 ( after they subtract a cleaning fee).

Surprised to hear that you have condo-hotels as well.

May 17, 2009 06:08 PM
Virginia Hepp - Mesquite NV REALTOR
Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

They were not planned.  One actually was a casino hotel that was converted to condos.  It is just studio and one bedroom apartments - HOA is about 150 and covers about everything.  They sell for under 70K.

Another was a time share resort at Wolf Creek Golf Course that was converted to condos.  That one was pretty wierd - for a couple of years all of the new owners had phone and internet through the old front desk, even though they owned their home.

They really aren't condo-hotels, but are considered that by lenders.

May 17, 2009 06:54 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Virginia - that maybe what we call here "conversions". These are usually apartment complexes, where they convert them to condos and sell to individual owners.

The condo-hotels are those (at least here), that operate as a hotel, but rooms (units) are individually owned. Legally they are condos, and condo-hotel term was coined to show that they can be rented on a daily basis, and it has a front desk, like in any hotel.

May 17, 2009 07:03 PM
Virginia Hepp - Mesquite NV REALTOR
Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

Jon, these are conversions, then.  They do not have any services like a hotel - individual owned apartments.  When they converted the Wolf Creek one from a hotel time share, they just took a couple of years to convert the wiring for phone, cable, internet, etc into individual units.

All this time, I thought we were talking about the same thing.

I would love to live in a real condo-hotel.  How easy that would be.  Do they have maid service and room service?

May 17, 2009 07:13 PM