How To Spot A Real Deal Buying a Condo-Hotel In Daytona Beach

The Plaza Hotel & Spa is one of two really luxury condo-hotels in greater Daytona Beach area. The conversion came at the height of the market and was very successful and then died, so to say, on a dime, leaving close to 100 units out of 322 units in the hands of the developers, who happen to be the biggest hoteliers in the area.

At the peak of conversion to condo-hotel, the prices went higher than $810 per sq. ft., which was nearly double what older condo-hotels were selling for on a per sq. ft. basis at the peak of the market.

I did not touch the Plaza Resort & Spa, because I could offer better value to my clients in Oceanside Inn. But the prices were sliding, and we tried to throw a line on a couple of distressed properties, did not get them on our client's terms, and forgot about it.

And then I noticed that city view studio for $69,900. Knowing that initial price on the unit was $197,721, I knew right away that this was a deal. The resort with maybe the highest occupancy and ADR, a unit at that price was a pretty good candidate. I saw 3 units priced in the $90s, but I did not pay much attention to it, until I was there showing this city view unit for $69,900. I suddenly noticed that one of those units in the $90s was actually a penthouse direct oceanfront studio.

That was a wow. 462 sq. ft. unit sold in March 2006 for $336,297 ($727.9 psf), and it was now for $95,000? This is only

$205.63 psf. That was a triple "Wow". To add to that, the next door identical unit is for sale for $459,000. Of course, this is a

2005-2006 market price, but it shows you that there is $340K equity, which can be realized when the market goes back. Well, those who think that the market is not going to go back any time soon, should not be reading this, as I can't explain that day comes after night. If they do not know that by now, they should be watching real estate in CNBC or something else.

Why is that price? This is a REO (Real Estate Owned) property, meaning that there was a foreclosure and there were no takers at the court steps. The Lender got it back, and gave it to local agents to sell, and do not ask me why they managed to come up with this ridiculously low price.

I nearly missed it. Now, that I know about the property, I do not want to lose it. I would buy for myself, but I am already overstretched. Don't see the partner for this one, which is, listen here, could be a flip candidate for a slow market. So, I send the e-mail to my list of people interested in condo-hotels. My good client comes back to me within an hour. We communicate, and the offer goes to the Listing agent next morning. For $95,000 plus Closing costs my good client gets the unit, that I think could be called the best condo-hotel deal in all years I am selling condo-hotels.

Want deals? Talk to us. You are not going to get these deals on CNBC, or ABC, or BBC, or whatever. The market will still decline another 15 %. FIne. The next least expensive direct oceanfront unit is for $189,900, the market price is high $200s. So the market value when the media declares that they are at the bottom and the time to buy is there (assuming you ever get that instruction), the market value for them will be mid $200s.

THIS IS NOT THE MARKET, THIS IS A DEAL. THE DEALS ARE SO UNDER THE MARKET PRICE, THAT WAITING FOR THE MARKET TILL IT GOES DOWN 15% AND THEN BUY WOULD COST YOU WAY MORE.

Of course, if the media will start telling you about the deals, and guarantees your success, and... hey you are day dreaming. Wake up.

Buy the way, the unit that was for $69,900 made sense to me... and to my smart client, who missed the boat with a direct oceanfront unit. The lender reduced the price by another $10K, and we got it under contract for even way less than $59,900. It was sold initially by the developer in March 2006 for $197,721. You can do your own math, but it definitely falls under the "Deal" category.

What do you need to get Deals? You need the no BS agent like me. You can start making money in Real Estate, or you can watch TV and read the newspapers. But do not call me and say that the real estate market is bad. Not for my good client, who is buying a half a million dollar unit for $95K, or another client with a no nonsense approach, who is buying a $197K unit for $0.27 on a dollar. Want to wait until the market drops another 15% and then come and by for $0.65 on a dollar? No problem.

Below is the Slideshow of the Plaza Resort & Spa. Enjoy the slideshow.

Such a pity I could not buy it for myself. I would have retired a few years earlier.  

Jon Zolsky, your Condo-Hotel guru
www.DaytonaCondoHotel.com