Larry saw the listing on Realtor.com. I have sent Larry the information about Oceanside Inn in Daytona Beach Shores, including a few links to the blogs on Localism about this property.

Here's the e-mail from Larry:

"jon,
thanks for the information. do you have any idea what the occupancy rate is? what is the split with the resort on rentals? what is the split if i provide the rental? i am very interested in this property. have you any idea what the availability of mortgages is for a condotel? what down payment can i expect? as you can see i have a lot of questions.

thanks"

I will answer these questions, as, though each condo-hotel is different, there are more similarities in the way they operate, than differences.

1. In Daytona Beach area for our purposes we do not use the occupancy rate. It is a parameter, that can obscure, not clarify. Hotels use it, and even they rely more on ADR, than occupancy. You got busloads of groups and have your occupancy at 90%... but at $23 per night. And another one rented only 37% of the units, but for $119 a night. With the high occupancy you would still get less.

The way we look at it is whether there is enough rental income on average to pay the expenses and whether the owner at the end gets something or pays out of his pocket.

2. In Oceanside Inn the split is handled in the following manner: 10% of top is going towards commissions, credit card expense... The balance is split 50/50. The owner gets 45% of the gross income minus small repairs beyond cleaning.

3. If you send a guest, you will receive 75% of the gross income only if they rent at rack rate. If this is a discounted rate, then the split is standard. The guest will have to pay $25 cleaning fee to bring it to rental condition for the next guest. This is in Oceanside Inn and not in other condo-hotels. Keep in mind that for that there will be no service (everyday cleaning and making the beds), but the guest will be getting towels when they need, and maintenance will be provided if needed. By the way, if you have signed the rental agreement, you can't take it off the rental program at will, you will need to give 90 day notice.

4. With mortgages it is tricky. It changes so fast, that I need to call my mortgage guy every time I need to help my client with financing. Last time I was told that it was still possible but with higher down payment and decent score.

On a separate note. Everyone working condo-hotels should understand that we, as real estate agents, are offering Real Property, while selling because of potential income generated by the unit as a result of activities of the third party (rental Management company) constitutes the sale of securities, which we are not allowed to do.

The Buyer has the right to ask any question, and we suggest that during due diligence the Buyer requests rental history from the Seller, which goes to the Buyer directly. I can legally tell you that these units were originally sold for $xxx and that they were reselling 3 years ago for $xxxxx, that's legal. Telling you that you will make this much money in rental income is illegal.

Jon Zolsky, your Daytona condo-hotel guru
www.DaytonaCondoHotel.com