Board Topic: Financing a Hotel to Condo-Hotel Conversion
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Financing a Hotel to Condo-Hotel Conversion

Posted by: David Nov 23 2004, 02:41 PM
What type of financing is available for a conversion of a hotel into a condo-hotel?

Posted by: avatarfi Nov 23 2004, 03:22 PM
You'd probably be looking for commercial construction financing. It's similiar to rehab, but for the commercial set smile.gif

Try some searches at Google, Yahoo!, etc. If that doesn't work, you can try contacting my boss - Gillian Muessig - gillian at avatarfinancial.com - although we don't do these types of loans, she has a lot of contacts to direct lenders she can refer you to.

Best of Luck!

Posted by: loanuniverse Nov 24 2004, 08:55 AM
Normally, conversion is done on apartment buildings. Converting a hotel property would be more difficult as the size of the rooms is much smaller than an apartment and the renovation might include some tearing down of walls.

Financing for conversions is usually done in two stages.

An initial disbursement that will provide funding for the acquisition of the property. This is the moment where you will need to come up with substantial equity {think 25%} of the acquisition cost.

A renovation portion, which will be disbursed over the time that it will take to do the refurbishments. {usually about 12 to 24 months}.

The lender is going to be looking at:

- Your experience.
- Your equity participation.
- Your net worth.
- The market conditions {demand}.
- The quality of the product
- It might also perform a gap analysis to find out if the property without the conversion would be able to pay the loan {believe me some projects hit snags after they are funded}.

That is it in a rough way.

Posted by: Susan Dec 1 2004, 12:11 PM
I recently found a website that had good information on condo hotels including condo hotel conversions. Go to condohotelcenter.com.

You can also sign up for their Property Alert newsletter which gives information about new properties coming on the market.

Susan

Posted by: loanuniverse Dec 1 2004, 11:48 PM
Susan: That site is for people interested in buying a condo unit. The original poster was interested in converting a hotel property into a condominium.
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