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. 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.
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 toask any question, however, 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 Beach connection
www.DaytonaCondoHotel.com
I recently received an e-mail from an owner of the unit in the Plaza Resort & Spa. No, I was not his agent when he bought the unit there abut two years ago. 
With the real estate market as it is, a terrific buy in 2005 turned into a heavy liability.
Gorgeous direct oceanfront unit. Maintenance fee since he purchased the unit more than doubled. With the price iin high $200s the mortgage payment plus Maintenance plus taxes are not covered by the rental income, and he needs to reach into his pocket to subsidize it.
And then the news, the Management company filed for Chapter 11. Sad story, but rather common lately. The rental check came, and it bounced back. He called and did ot get to anybody. Called the owners liaison, but did not speak to her. He even called the management, they transferred him to a phone, where he could not even leave a message.
He read my post Daytona Shoreline Hotel Tycoons File for Chapter 11 and sent me an e-mail asking whether I could give him any information.
He sold his home and lost money on that, moved out of Florida, struggles with this condo-hotel, which he is not even using any longer. 
For him the checks not coming is not an option, he would not be able to pay that much money.
I promised I would go there and try to talk to someone, if I manage to get that someone. I came in the morning, it was quiet, the day was absolutely gorgeous. Ashley, the Owners Liaison, was at her desk. She is a nice looking young lady, we met before when I was representing buyers of units in the resort. As I expected, Ashley told me that she did not have much to say, everything was the same way as before. The filing of bankruptcy did not change anything for the owners, according to the management. In this resort there were no changes, the same management company, no layoffs, nothing. Well, bounced checks were an unpleasant coincidence. Of course, it is a tell-tale sign of the times, but I do not have any reason not to believe Ashley.
The developer has so many properties, and a lot of them are either land, or empty hotels waiting for demolition, and Plaza Resort & Spa is their flagship property, and if any of their holdings are profitable, Plaza would be the first on that list.
So, dear owners. I was assured that you will be getting your money. If you still too deep in trouble, and need help, talk to us. We are not pushing, and we are knowledgeable.
Will filing for bankruptcy cause further decrease in prices in Plaza?
Jon Zolsky, your Daytona Beach Connection
www.DaytonaCondoHotel.com
I was wathching TV the other day about this Great Bailout, and was stunned by a definition, that there are Innovators, Imitators and Idiots.
How darn right!
Innovators are those who follow the basic rule of Real Estate "buy when the prices are low, hold to it, and sell when everybody is buying" attributed to John Paul Getty. Innovators base their decisions strictly on the values, and are not swayed by presidential elections or the media.
Time to buy is when price is low. They know that the market will warm up and then even get hot. Innovators make the most money.
Imitators are tempted by low prices. They also know that the market will come back, but they are sure when. They are afraid that this time it may take much longer. They wait for some signs that the end is near, and they want to see the light at the end of the tunnel before they dive into investing.
They have a pretty good sense of the market, and are able to pick the early signs of the change, and then they are in. They may pay a bit more, but they are still early enough in the process and make good money.
Idiots comprise a huge non-discriminatory group of all races, national origins, genders, etc (and blondes - LOL). Contrary to the popular belief, for the purposes of this blog idiots (and blondes) are not mentally challenged. Sometimes and often times it is even the opposite. They simply make bad business decisions.
Idiots do not buy in slow market. They know about the cycles but they are sure that this time it is different. The market will never come back. They call themselves "fiscally responsible", "smart", etc. When the market starts warming up, they still sit on the fence, as they need to make surre that the market is stable, and their investment is guaranteed. So, they jump off the fence the last, pay top dollar in the already declining market, fooled by its inertia. Idiots are those who lose money. Usually a lot of money.
So, when the government comes up with Great Bailout Plan, is it for Innovators? Nope. Is it for Imitators? Mostly no. Is it for Idiots? You bet.
Why not just sit outside the casinos on the Strip and offer to offset losses just because the gambles were expecting to win, but lost? Look, Idiots are those, who turned the Science of Buying and Selling Real Estate into the art of gambling. And then the question is: do we reward it as a form of art or we reward gambling? Do we need to give money, Oscar, or both?
Excuse me for asking, are you an ... ah, forget it!
Why do we love idiots so much? 
Jon Zolsky, your Daytona Beach Connection
www.BeautifulFlorida.com
When the market was going up at an accelerated pace, according to the study, Naples, Fla., topped the list, with homes 84% overvalued. The study also pointed out undervalued real estate markets like College Station, Texas, where prices were 23% below what the data suggested they should have been. Charleston, S.C., undervalued by 7%; Charlotte, 6%; Huntsville, Ala., 11%; and Lafayette, Ind., 10%...
What does it tell us? Is there any practical advice that I can use as investor? Well, no. Even if you want to follow the theory and rush to College Station, TX, and buy a house there for 23% below what the data suggest it should be, it does not mean that you could sell it with a 23% increase in value. You are not going to bring it to Naples so that you can get 84% of Naples' overvalue plus 23% of College Station's undervalue to a whooping 107%. It does not work this way. There are too many other factors affecting the housing stats. When ITT left Palm Coast and there were tons of available lots for under $10,000, did we all jump on that terrific opportunity? We had plenty of indicators that these prices were too good... When Daytona market started getting out of the decade's stagnation in 1997, did we jump on the opportunity to reserve the condominiums for $1,000 and then have the most incredible ride on appreciation? Very few did. Not because there were no indicators, but because it is not the indicators that make us move, it is the success of others. We smiled at them, we thought we were smart and cautious, but they kept making money. Then we got angry that we were missing the train, so we were in a hurry to catch up. We were so determined that we did not notice that the train gained speed. Now, instead of being angry at ourselves that we got on that train too late, we are angry that we got on it, period. It is not the train, guys, it is us, passengers.
The reality is that in any market condition, whether it is "hot", or nearly dead, there are and will always be opportunities. The beauty of real estate that it is not homogeneous. No matter what the national or state statistic tells you, their big numbers come from thousands of small numbers which, high and low, together make the averages. The house is not just the walls and the roof, the fence and the backyard. Its value may be affected by the value of nearby properties, power lines, easements, etc. The same model and age house may be worth $200K in one location and $500K just a block away.
My friend in 1995 was looking to buy a house in Ponce Inlet on the ocean for $210K. The house needed work, so he ended up buying another house in Ormond for $120,000, which he sold 8 years later for $220K. The oceanfront house was already worth $2 Mil. My friend did not make a mistake with the value of the house. He made a mistake with the value of land.
Do not gamble. If your retirement plans do not depend on your next trip to Las Vegas, do not do it with real estate investment. Do not sign for a new construction just because you plan to flip it and bring somebody to the closing table. You have to be able to close plus to hold to the property for some time. Do not risk your down payment. I agree with a popular belief that there is a northerner out there with money in the pocket and he comes to buy your house. He will, but it may take a year, two or more.
You could do fine with $50,000 to invest in, for example, Palm Coast, FL just at the end of 90s. You needed more cash to get the same return 2-3 years ago, you can again afford investing today, but you would need more cash tomorrow. We see more and more Californians coming to buy properties here, because their dollar stretches further here. They were forced out of California investment field by high initial investment requirements. Therefore, rule number two is that with time you need more and more cash to receive the same returns. In other words this is getting more and more competitive. When everyone scream that the market is disastrous, the values are still higher than 10 years, when they were not disastrous. The longer you wait, the more it cost. Our next disaster market will be more expensive than today.
Rule number four. Do not change the criteria. If you have reserved the unit in a luxury condo with ocean view for $569,000 just because the price per sq. ft. is the lowest in the building, apply the same criteria when selling. You wouldn't sell it later for more money than direct oceanfront units in the same building at the same time.
Investment is the numbers game, so play it accordingly. Time and again we see people buying properties because they like them, or they fix them the way they like them. If you will never sell, do whatever you want. When buying for investment, do not paint the ceilings green just because you son, living in Denver, likes this color. If you are buying a new construction, do not ask the developer to do certain things unless this is what the overwhelming majority of others asked for. At the same time do not tell them not to do what the majority of customers want. Therefore, the rule is that when buying a property as investment; buy what the next buyer would like. Buying new construction, choose only upgrades that are highly visible and have the highest perceived value. Nobody would notice that you have the quietest dishwasher at a cost of additional $800, and everyone would notice a tiled dining room at similar cost.
Rule number five. Set your investment goals when you buy the property. Write them down and try to stick to them. If you are buying the property for $300,000 and plan to make $100,000, wait until you can sell it for $430K-$450K (so that you get $100K profit after you pay the closing costs) and sell it as soon as you can get your price even if the values are on the rise and you can get more money if you wait. If you set your goals realistically, you could be better off selling, and reinvesting $100K plus the cash invested into another property. If you decide to wait, without setting the goal, you are gambling. Your money is tied in the property, and you do not have a clear plan when to unload. Then, if you suddenly unload, you are not ready with the replacement property, and your money will not be working until you find one. The fact is that investors, who follow this rule, have a shorter investment cycle and make more money.
It is definitely worth dealing with professionals. Having a license to sell real estate does not make us professionals. It simply allows us to charge for our services. When it comes to investment, there are not that many agents, who can do it on a truly professional level, even those who invest on their own account. Many investors are thrilled with the process and work with a lot of agents and brokers. If you feel that you know your stuff better than they do, you are either right, or... you simply did not meet the good one yet. Try to find one; it could accelerate achieving your investment goals. Talk to agents and listen whether they make sense. See if they say "no" when you become unrealistic. Trust you gut feelings. If you are blessed and find an agent or a broker, be loyal. Don't be fooled that everybody wants your business. It takes a lot of time and devotion for agents to start seeing your business as their priority. There are plenty of repair shops out there, so why you always take your car to the same mechanic?
There may be no good or bad markets. There are always those, who make money and those, who lose their shirt. Investing is like driving a winding mountainous road, you drove it yesterday, but there may be a huge stone that fell in the morning, and it is right behind a sharp curve. Keep your eyes and mind open, and make sure your brakes are OK.
Jon Zolsky, your Daytoan Beach connection
www.BeautifulFlorida.com
Daytona Beach Resort & Conference Centeris a 322 gues rooms and suites condo-hotel in North Daytona beachside very close to Ormond Beach.
This is a conversion still in process, as they are showing 30 units for sale by developer.
Below you can see Active Listings for studios and suites (1bdr units).
Sales are not very impressive, from January 1, 2008 and until today 7 Studio Units sold from $70K to $98K (quite a contrast for the Active Listings). For the same period of time there were 4 suites sold ranging in price from $145K to $170K. Sales were approximately 9% under the asking price.
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