Seems like a dream, but many of today’s retirees who have embraced technology and new forms of second home ownership are living the dream.

By combining condo hotel and technology, many people are finding they can spend more time in the places they love, with less expense and more luxury.

Condo hotels are hotels that have been converted or built for individual ownership of the hotel rooms and suites as traditional condominium. A condo hotel unit offers the owner hassle free rental income when the owner is not in residence and personal luxury of maid service, valet, etc when in residence.

As technology evolves many of us are finding that the office is anywhere with WiFi and blackberry cellular service. So why not office in luxurious surroundings? On a beach or in a luxury hotel?

Will retirement be simply a free-range office space that is looks like a series of condo hotel suites? Many demographers beleive the baby boomer generation will redefine retirement as a second career of one’s choosing and not an endless round of golf or a rocker on a lonely front porch. That retirement will look like a wall-less and wireless career of new ideas and invention.

if these predictions are correct, the future is indeed bright for the condo hotel industry.

Bob Waun , Founder & CEO

bwaun@vacation-finance.com

Bob is CEO of Vacation Finance, America’s First Second-Home Lender. As a VP at Paramount Bank, and while at Wells Fargo, Bob innovated lending for Condo Hotel projects. He holds a Master’s degree in finance/economics and BBA in finance from Walsh College and a MI Real Estate Broker’s License. He has personally lent over $750+ million in residential loans, and over seen operations lending $1+billion. He has been a professional guest speaker and taught numerous courses/seminars on real estate finance.

He managed controlled business relationships for a national real estate brokerage in MI and OH, held top sales honors for Wells Fargo in 7 states. Bob has a 17 year track record of cutting-edge innovation in the mortgage finance.

Since 2002, Bob has worked with condo hotel developers and lenders to improve the market for condo hotel financing.

Tags: 2nd home loans, boomer, condo, condo hotel, fractional, Mortgage, real estate, realtor, retire, second home2nd home loans, boomer, condo, condo hotel, fractional, Mortgage, real estate, realtor, retire, second home

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Why the fractional vacation industry is booming

1.) Demographics - 78 million US Baby Boomers that will retire in the next 15 years (the largest population turned 50 in 2004-05, with 50th birthdays occurring every 7 seconds). The under told statistic is that there will be 103 million Empty Nesters in Europe by 2009 and Japan will have 32 million boomers by 2010, in a total population of only 127 million people. 213 million Boomers will compete for a uniquely similar lifestyle in retirement.

2.) Boomers Like Debt - Unlike the previous generation, Boomers have proven that they are willing to pay, and borrow for the lifestyle they want. The boomer generation has innovated everything from disposable diapers to SUV’s, they will innovate the idea of retirement homes.

3.) The Wealth Transfer - Not everyone is going to get rich. Boomers are estimated to get the biggest slice of the inheritance pie: $17.8 trillion. Distributed evenly, each of the 78 million US boomers get $228,205. But these inheritance dollars will not be distributed evenly. The 73.5% of the boomer cohort will likely join the wealthier classes. Within the next 15 years, 20.7 million boomers will become over $658,000 wealthier, and 57.3 million people will get less than $72,900 to boost their meager net worth/retirement. 20.7 million people may be able to afford luxury retirement residences if they innovate to fractional ownership, condo hotel, and private residence clubs. Whole ownership is going to be bid farther out of reach by the sheer mass of this population competing for prime property, a trend that is already under way. Boomers will need to get creative by purchasing a combination of a primary residence, Condo Hotel and Fractional and PRC ownership options, to more efficiently use their limited nest eggs and to have active and dynamic golden years.

Fast Facts:

Traditional timeshare grew 21% to $7.87 billion in 2004, average price $15,784.

High-end timeshare grew 22%, to $1.075 billion, average price $40,270, 50% of owners say they would buy more fractional shares in the future. Only 3% of US population currently owns fractional real estate interests.

The average American worker gets 2.4 weeks of vacation, and will retire at age 62. Many boomers expect to continue to work, possibly in a different career after retirement.

The $100,000+ income cohort is growing 8 times faster than any other income group in the USA. Mortgage leverage has also grown in recent years. These people have money and are not afraid to borrow to own more real estate and lifestyle.

There are 142 fractional projects in the USA, 23% in Florida, 21% in Colorado. That’s 549,295 boomers for each project in supply.

The most economical way to own more than one home, is to only own the piece you want to use.

America’s First-Second Home Lender

About the Author:

Bob Waun, Founder & CEO
www.vacation-finance.com
bwaun@vacation-finance.com

As a VP at Paramount Bank, and while at Wells Fargo, Bob innovated lending for Condo Hotel projects. He holds a Master’s degree in finance/economics and BBA in finance from Walsh College and a MI Real Estate Broker’s License. He has personally lent over $750+ million in residential loans, and over seen operations lending $1+billion. He has been a professional guest speaker and taught numerous courses/seminars on real estate finance.

He managed controlled business relationships for a national real estate brokerage in MI and OH, held top sales honors for Wells Fargo in 7 states. Bob has a 17 year track record of cutting-edge innovation in the mortgage finance.

Since 2002, Bob has worked with condo hotel developers and lenders to improve the market for condo hotel financing. He has been nationally recognized as an expert in vacation ownership finance. Bob is a member of The City of Birmingham Principal Shopping District Board, Lions Club, Goodfellows, and a guest speaker at Seaholm High School.

Tags: 2nd home loans, condo hotel, condo hotel mortgage, h, hotel condo, Mortgage, second home, second home loans2nd home loans, condo hotel, condo hotel mortgage, h, hotel condo, Mortgage, second home, second home loans

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The SEC has legitimate concerns about some condo hotel developers selling units in their projects based solely on the ‘forward looking investment potential’. If developers were left unchecked, with a pile of spreadsheets touting income potential, every condo hotel unit in the country might cash flow at remarkable levels, on paper, and every small real estate investor would have a PhD in condo hotel lingo. This is the fear.

I believe we are not giving the consumer enough credit, but I understand the fear. ADR, Occupancy, RevPar, the language of the hospitality industry can appear sexy at first glance. Nightly rates, rack rates and Average Daily Rate (ADR) can vary widely. Occupancy at a hotel has so many variables. Hotel management is one part science, and one part art, but it is all business. Real estate salepeople and developers are not licensed to sell business interests and this is the crux of the dilemna.

SEC rules require that securities or business interests are sold with complete and proper disclosure, but disclosure is such a slippery slope. Afterall so many other real estate properties are sold for their investment potential, like apartment buildings and warehouses, why are condo hotels treated more conservatively?

Consumers, while on vacation, buy condo hotel, not savvy seasoned investors. Again, I think we are giving the consumer far too little credit and information.

Consumers who look to purchase a condo hotel, are told to consider it just as simple real estate. To attempt to ignore the rental income potential and make their purchase more like a second home or vacation residence. But the income potential is still a large part of the decision. When the consumer is told by the real estate sales representation that they cannot in any way discuss income or income potential, time and again the consumer feels something is being withheld. I have witnessed as the potential condo hotel buyer asks “why?”

The consumer deserves an open dialog about risks and rewards in condo hotel ownership. Attempts are being made to create a firewall between real estate sales and hotel rental management departments but it is still disjointed and spooks consumers trying to understand their purchase decisions.

As CPAs, financial advisors, bankers and other trusted consultants better understand this new real estate product, its potential and risks the gap in the information for the consumer can be bridged.

Bob Waun
CEO
Vacation Finance
waun@vacation-finance.com

Vacation Finance, America’s First Second Home Lender is an innovator in condo hotel mortgage lending and has been a leader in educating consumers and developers in the risks and rewards of this new product. Vacation Finance also offers a full line of mortgage products for fractional, true condo hotel, non-warrantable condos, vacation land and timeshare.

Tags: 2nd home loans, boomer, condo, condo hotel, fractional, Mortgage, real estate, realtor, retire, second home2nd home loans, boomer, condo, condo hotel, fractional, Mortgage, real estate, realtor, retire, second home

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