Investors have more options when it comes to where they can put their money and make it a great income. However, for certain projects—mostly big ones—like owning and renovating a condotel is required the correct amount of funds for it, which leads them to go for condotel financing in this case.
Before getting to the financing and how you can get it, you might be looking for it but you’re not completely aware of where you’re planning to use your loan. A condotel is similar to a hotel but it offers more services and amenities for the owners and no, it isn’t a matter of user and visitors or changing the person using it every week.
Condotel is used as homes or apartments but instead of being just in a residential area where you only have your home to enjoy, you have additional elements and features—taking us back to the amenities mention. This type of property is very popular due to their prices and the uses people can give them.
If you are a first-time buyer or someone who is looking for more than a place to sleep, you can give them a chance for less than the usual price of a house. With that said, condotels are also an investment and not only a place to live, which takes us to the financing part. Real estate investors or even owners decide to go for condos because they can be passive income in the short and long-term.
Since they offer services like resorts and condominiums for vacations, it is possible to rent them while you are not using the space or go for it as a complete investment. Now, the fact that they are usually cheaper than a house or other living option, doesn’t mean they are affordable for everyone. This is why the financing option is all about obtaining the funds to purchase the new property since you cannot apply for a regular mortgage as if you were acquiring a single-family home.
Also, this type of financing isn’t usually allowed in banks and other entities due to the conditions and terms around the agreement between the lender and the borrower, which is why private lenders are the ones most people go for. However, when compared to banks or other institutions that actually offer this credit and then, you go to the private options, you obtain more flexibility and fewer requirements to fulfill with the latest.
Our team at Commercial Real Estate Loan Pros of West Palm Beach can offer you great deals to purchase your new home or start your investment for future income. The process of applying and accessing the loan will be very similar to traditional credits for single homes or similar properties. The aspects that tend to change are those around the loan size, repayment time, and interest rates as well as adding a few requirements such as assessing the condotel you’re aiming to buy.
How does a loan work with condotel? Who’s the owner?
Let’s address the last question first since it is the most common one: you are the owner. The main doubt when acquiring condos or, in this case, condotels, is who is going to own it since you have the actual owner of the entire construction and then, the lender that provided the funds. Our role isn’t any different since we are here to provide you with the funds, not to own your property.
Of course, the basic condition of having collateral in case you don’t repay the debt stays the same, but you will be the owner as long as you meet every payment in the established time. Now, when it comes to the rental agency and you, you’re still the owner of the unit but not the rest of the amenities and areas in the space. Therefore, when you apply for condotel financing you will be using it for the unit you will get in the building and nothing else.
With that clear, we have made sure to keep the process and steps of how the loan works as simple as possible. You only need to apply with the documentation requested—bank history, credit score, and identification—, provide the details and price of the condotel to be acquired, and let us know how you would like to repay the credit.
Our team will be evaluating your request and determine if it is possible for us to provide you with the condotel financing requested. If you qualify, we will establish the interest rate, amortization time, repayment time, and will proceed to assess the property you want to acquire to include it as collateral.
Once you agree with the terms, the funds will be available in a matter of days and monthly payments will start in 30 days after you receive them.
What is the best? Condotel financing or investing your capital?
Many investors or future owner-occupants consider using their own finances or capital to acquire the condotel unit. This isn’t a bad idea if you truly have enough money for it and want to purchase it right away.
However, every investment and purchase comes with a risk and you can always save your money, use a loan, and use the time for repayments to determine if you truly want to stay there or have it as a passive income in the future. In short, it is easier to regret your decision or just be able to relax and have a bit more freedom for its payment in case you see it impossible or very difficult to pay for the entire unit yourself.
The benefit of going for condotel financing options, especially with our team at Commercial Real Estate Loan Pros of West Palm Beach is that you won’t be pushed to have a return on your investment as soon as possible.
For real estate investors, restoring their investment plus having revenue is the most important part when they are going for a buy and resale option. But this is quite hard to achieve when you don’t have enough funds to take care of yourself and went all-in with the purchase.
Meanwhile, financing the purchase will allow you to meet small payments and then, repay the loan when you resale the property. For those aiming for a long-term income, you can use your personal funds to renovate it and work around its improvement.
Overall, it is better to go for a loan instead of financing it yourself due to the economic problems you can face while on it. And with us as your lenders, there’s no need to worry about high-interest rates nor being in an inflexible situation with payments around the corner every single time.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below: