A couple of days ago, I have received an e-mail:

“Hi Jon,

I am planning to buy a condo/hotel in Daytona Beach. I just found Ocean Jewels Club for 24K. What do you think about this one?”

If I had to answer in one sentence, I would say that I do not recommend Ocean Jewels Club at this time. Too much uncertainty ahead. But the blog allows me to go beyond just one sentence, so here is the reason for that short answer.

This 201-room condo-hotel in Daytona Beach, built in 1975, has a problem with the rental Management company. They used to have a pretty good company run by Roger Mahood, and a lot of owners still regret that he sold the management company and the space on the first and second floor that belonged to him, to a new owner.

The new owner was not a hotelier, but, as it so often happens, thought that there is no problem running a 201-room resort right on the beach. Isn’t it just fun? Turned out there was something besides fun, and this part was not going well. It actually was going worse and worse.

I knew things were not good for the owner of the commercial space, and I visited him a few times. I tried to have him sell the space and the company to a seasoned hotel operator, but they already collateralized the property over and over, and could not accept anything less that what nobody would offer them in that market.

Meanwhile, there were fewer and fewer units on rental with the Front desk, as they did not pay the owners on time, and finally they simply closed the doors owning owners money. There was a note on the door saying that the front desk was closed until further notice.

That further notice has not yet come.

The Association, which is managed by All Florida Realty, would love to buy the commercial space, but there is no money to do it. The defaulted owner owns too much money between the mortgage and private loans. The property went into foreclosure, and last week finally it was foreclosed. The lender/s got it back, and so far nobody contacted the Association, so they do not know what is going to happen with the property.

Meanwhile, the Front Desk is closed and owners wither keep units for their own benefit, or rent themselves or other companies. Some a re even happy, as outside companies charge not 50% of each dollar made on rentals, but 20 or 25%.

Good deal?

Not so fast. In the long run it could probably be a very bad deal. The idea of the property rented by various Realtors, or owners is detrimental to the property. Ideally the owners are interested to have the Front desk as their eyes and ears 24 hours. Outside agents and companies are only doing Internet advertising and cleaning the units and preparing them for the next guest. They are not there and they have no clue what is happening to the resort. Maintenance for the association is not the equivalent for a good rental management. They are not there 24-hours, and their functions are different.

This is a rather unfortunate situation for the owners, even if they do not yet understand it. Buying there today makes it tricky even at $24K. Would you want to lose even $24K?

Condo-hotels are not the most stable properties on the market, and maybe the champions of the opposite, so if $25K is not a problem and you would not really noticed losing it, then it is one thing. If you, however, are counting your money, and think that this is a good deal because it is so inexpensive, then be careful. It may turn more expensive in the long run.

By contrast, the Association is doing OK. They have completed the repairs of their south Tower (6-story building) for which they had an assessment. They are trying to keep the rest of the proeprty in decent shape to avoid the assessment, and at this time nothing is planned or discussed (according to the Association Manager). It does not mean that there will ne no assessments in the future, but the condition of the market is that the longer they can hold, the better chance is to have the assessment at better time, when the tourists (and the money) are coming.

But if all you want is a place on the ocean in Daytona Beach in Ocean Jewels Club, and you can’t care less about rentals, go for it. It is fine as long as you know the story.

If you are looking for condo-hotes or condos in Daytona Beach Area, call me 386-405-4408 or e-mail me.

I spoke to the investor, who can move very fast. He said he would buy. I know the agent, so I am calling her. Does she know that the unit is for the auction? Yep. It is actually not any longer for the auction. She bought it.

Wow, something new for me, buying a short sale units from the Seller, who you represent… interesting. But that’s fine. It is still on the market, but now it is not a short sale, it is a flip.

The other one is not listed. We dug for the phone numbers, a few did not work already, but finally a call was answered by a lady. She knew nothing about the property, but she gave me the phone number of her son, who could now. I called her son, he did not know either, but he had the number for a person on the deed. So, after just an hour I am talking to the person on the Deed (one of two), and I am asking him whether they tried to do the short sale.

 - I have no money
 - I understand, but do you know that foreclosure may hurt you more than a short sale
 - I don’t. I can only repeat that I am not choosing anything, I simply do not have the money
 - What if I do not ask you for any money, and suggest that we can try to stop the foreclosure, would you be interested? But I can’t guarantee anything. To tell you the truth, it is actually unlikely that we would be able to do it, but we have a chance and let’s try to use it.

An hour of so later we have the offer signed by the Buyer, and it is on its way to the Seller. Next day I am anxious as I do not have the paperwork back. Call the Seller, and he said he is getting the documents back to me, he waited for the loan number for the authorization form.

As promised, he faxes everything to us, but by the time I find the contact information for his lender, I am late. I bring the documents and the authorization to the attorney’s office. Today in the morning we both start calling the Lender. Too little time left before the auction. I am nervous, as I can’t talk to anyone, I am simply leaving messages, and it leaves me uneasy. The laady at the bank promises that they would call me later.

Finally I get the call from the Loss Mitigation Department (actually they call it something different, but I forgot how). The news is good, the Lender put off the sale for 30 days, and is suggesting that we can close in 30 days or faster, so that we would be within the extension from the foreclosure auction. I can’t believe we got the stop of foreclosure and extension in just one day.

This is the beauty of working with small banks. They are real people, and when you call, you talk to real people, and you do not have to fax you authorization to a number, which our attorney’s office traced back to India, where they input all the information in the system, and only after that they can see you in the system. Here I faxed it in the evening, and in the morning everyone knew who I was.

I am looking forward to close this transaction. The buyer will get a fair deal in Plaza Resort & Spa in Daytona Beach, and the Seller would avoid the foreclosure, which he thought was absolutely unavoidable. I called and left him a message.

He just called me back, he is thrilled.

Looking for vacation condos or condo-hotels in the area? Call me 386-405-4408 begin_of_the_skype_highlighting              386-405-4408      end_of_the_skype_highlighting or drop me a line in e-mail. Prices are too good to pass.

I have received a call from a client, whose 2 condo-hotels we have sold back in 2004. His brother was in town, and was looking for at least a one-bedroom vacation place with the least hassle. Future possible resale was also important.

I can run a long list, like it should be on the Ocean, and you MUST be able to see the ocean from the condo, etc., but we should not forget the important part: it has to fit the budget. Somehow it is rare that the list of parameters adequately corresponds with the price. How often we have such an impressive list of what features should be there, and how often the price range does not support the desire…

But in a slow market like ours, miracles do happen, and this list came quite close to a one-bedroom unit in Ocean Walk, the nicest condo-hotel resort in Daytona Beach area. I have sold a unit there for $145K just a few months ago, and there were 6 units for sale at that time, and now there is only one one-bedroom unit for sale in the South Tower (better building in terms of rentals). It is an REO, and it is listed at $172K. 3 other units in the building are 2 bdr lock off units starting from $263,500 to $349,500, a far cry from $500K for a 2 bdr that I helped my client to sell there in 2005.

This is the only condo-hotel resort in Daytona Beach area, which was not converted from an old hotel, but was rather built from scratch in 2001. Built very well. Nice building with exceptional amenities. part of the condo units are time shares, and part whole owners. Wyndham Resort is managing Ocean Walk.

While majority of condo-hotels are struggling in this economy, it looks as if Ocean Walk is the least affected by it. Even with their high priced rooms, they are the first to fill up along with Hilton Hotel and Plaza. Located right across the street from the expanded Ocean Center (our County Convention Place), it enjoys the business from the conventions and business meetings.

From $172K we negotiated down to $160K, which is a very good price for a unit like that. The Buyer had to leave town to attend to scheduled appointment with his doctors. Something was bothering him and he set the appointment, and left. the contract was signed, there were a few things that we were footballing to each other… and then he called today and said his situation is worse that what he thought it was, he is going into surgery next week, and he canceled the contract.

Ouch!!! I understand that life is full of surprises, and not always the good ones… but I can’t get rid of the feeling of frustration when we have arranged such a good deal, put everything in motion, and now have to apply the breaks.

I know that in couple of days the unit will be gone, and i will g et a call and someone would ask to help find something with the great view, great amenities, least hassle… and for only $160K, and i won’t be able to offer a unit like this.

• because the market has changed, and there are fewer deals like that.
• because there are more buyers and investors scooping the units
• because the prices in Wyndham Ocean Walk Resort are higher today than 6 months ago
• because what is gone, is gone, and this unit is not going to stay. We have pretty much exhausted our luck with it.

So, here I am, upset that a good deal may not going to happen.

• Because there is the buyer somewhere
• because there is a unit in Ocean Walk Resort
• but I can’t match that buyer to this unit

Unless, of course, that call comes today… or tomorrow… while it is still not late

If you think of a great vacation place in Daytona Beach with great view (direct oceanfront, and just imagine the vistas from the balcony on the 11th floor), with best amenities in town, best rentals, great future resale value… take the phone RIGHT NOW. Call me at 386-405-4408 begin_of_the_skype_highlighting              386-405-4408      end_of_the_skype_highlighting.

There were a few things that puzzled me and one of those was the notion that Americans are stupid. It was coming from the mouths of newcomers easy and with the expectation that everyone else non-Americans can clearly see it. It made me angry, but I did not understand why they were saying it.

Now, after years in the US, and after going through what is called immigration, I know better, and I know how to talk to people, but I did not know it then.

We have all changed. We have all learned, some better, some not. I am not living in a so called Russian Community, and I do not hear it anymore. Those who came when we came to US, got smarter, so they know better. I meet people like me who came from other countries. They may be Chinese, Czech, Hungarians, Vietnamese,  Croatians, Romanians… and we all have that thing about Americans. So whenever they say something like that about Americans, I know exactly what they mean, and this is what I can’t explain

But when I ran into this interesting statistics, it brought back the memories and feeling of my first years in the country. In a sense, this statistics is the answer to the question “How Stupid Are Americans?”. It is so objective. Let us look at Nobel Prize winners. Let us compare Nobel Prize winners from Russia and from the  Unites States. 

It is a very telling statistics, well beyond the Nobel prize. It is a clear show of the ‘advantages’ of socialism. Check the number of Nobel Prize winners in Physiology or Medicine. We will now see a decline here, but it is a very telling story on the achievement in the field.

Some of those figures are not wihtout a humorous touch. 2 winners of the Peace prize were Mikhail Gorbachev and … his antagonist Dmitry Sakharov, whom he returned from the exile in December of 1986.

Out of 5 Nobel Prize winners in Literature only one – Mikhail Sholokhov - was a love child of the regime. Bunin and Brodsky emigrated, Pasternak was forced to refuse the Prize and died shortly, Soltzhenitzyn was exiled but later returned.

So, how stupid are Americans?

Hawaiian Inn Resort is a popular resort in Daytona Beach Shores. It has been converted to condo-hotel a decade ago and since then enjoyed quite a popularity among both owners and guests.

Hawaiian Inn was built in 1965 as a 4-story hotel. 9 years later another floor was added. The resort has maintained higher than others maintenance fee to avoid Special Assessments, and were quite successful for a number of years. But maintenance itself could not sustain an older building and eventually they were forced to start a major concrete restoration work.

The resort has completed the first two phases of the repairs. Concrete restoration is completed on the North Wing and is nearing completion on the South Wings. The the work will be haulted until second half of August when the season turns slow with the start of the school year. At that time the central part of the horseshoe building will be closed for guests and will go through replacing concrete and railings on the balconies.

The resort had already a couple of assessments (first about $3K per unit at one time, then one in 12 monthly installments of $350, which was running January-December last year, and there is an ongoing Assessment of $390 per month for 12 months starting with March 2010). These are not the last assessments, there will probably be 2 more to complete the project.

The assessment does not include the glass sliding doors to the balcony. The old windows cannot be put back, and the new sliders with the installation would cost additionally about $4,500 per room.

The number of available units for sale on MLS fell to 18, which is just half of what we had a few months ago. Prices start from $30K for a no ocean view studio and go to $188,850, which is, of course, either yesterday’s or tomorrow’s price, but not today’s. Latest sale was ours, and it was for $40K. The one before was for $35K and were several closing from $15K to $25K. Not any more. 

Is it worth buying a unit in Hawaiian now?

Good question.

Pros: great prices, great following (hence good rentals), good grounds and amenities, indoor pool in addition to the outdoor pool

Cons: Some uncertainly of the future assessments to complete the project, no income for those units that have not been completed and will be shut down for renovation, financial stability of the association, as we do not know how many owners are not paying their dues.

Here is a list of units for sale in the resort: 

Unit #  Bedr  Bath   Size     Price   Exposure

243          0         1         385     $30,000    No ocean view
323          0         1         402     $39,999    Oceanfront
409          0         1         402     $44,000    Oceanfront
226          0         1         402     $45,000    Oceanfront
522          0         1         402     $48,900    Oceanfront
227          0         1         510     $49,000    Oceanfront
139          0         1         358     $49,900    Oceanfront
426          0         1         402     $49,900    Oceanfront
333          0         1         358     $54,900    Oceanfront
434          0         1         385     $59,900    Oceanfront
416          0         1         402     $59,900    Oceanfront
310          1         1         534     $65,000    Oceanfront
419          0         1         510   $107,419    Oceanfront
319          0         1         510   $109,000    Oceanfront
225          1         1         534   $145,900    Oceanfront
129          1         1         800   $149,900    Oceanfront
240          1         1         511   $188,500    Oceanfront
406          1         1         534   $188,850    Oceanfront

If you are interested in units in Hawaiian Inn or any other condo-hotel or condo in Daytona Beach area, call me 386-405-4408. To learn more about condo-hotels please follow the link to www.DaytonaCondoHotel.com.

Attorney for the Association Jason Harrof Jason L. Harr, P.A. explained that this was not the first such court decision in the state of Florida. Receivership has already been granted in Lee, Broward and Palm Beach counties, but this is the first in Central Florida, and it sets the precedent for other condo-owners associations.

Oceanside Inn was struggling with non-payment of Association dues for quite some time. They have not been able to collect $154,000. 27 owners are not paying their dues. These owners are either simply behind with their payments, are in foreclosure, or are trying to short sell their units. As a result there were two special assessments, the latest voted for just a week ago. This becomes a burden for paying unit owners and it sets a dangerous precedent as with each such cycle there are more owners that quit paying the dues.

Until now the hands of the Association were tied. They could file for foreclosure, but when there are mortgages in $100,000 – $150,000 range, it really makes little sense. And even if one owner had several units in one property, filing had to be done separately for each unit. Blanket receivership covers the whole condominium, so no matter how many owners are in default now, or if any new defaults happen in the future, they are all covered under this arrangement, hence “blanket”.

The association under that arrangement would be able to collect rental income after the management company deducts their part. According to the Association Manager, the owners will not be able to use the units for their own enjoyment or rent them on their own. The receivership does not have a specified time limit. The rental management company for Oceanside Inn – Integra Resorts, Inc – has already made arrangement with the Court Appointed Receiver on the details.

Is receivership a way to eliminate debt? No. With the rental business the way it is, it is simply the way to slow down the accumulation of debt. Yes, the association would be able to intervene earlier, and not after the owner is $16K behind. But there is simply not enough rental income on average to catch up with the payments, and even often to cover the current monthly fee.

The way the receivership is implemented in Oceanside, it will affect owners who are 120 days behind in payments, even though the receivership does not have that limit. they can do it at any moments after the payment of dues was not made on time. This is the decision of the condo-owners association, as far as I understand.

The real solution is to expedite the transfer of ownership to paying owners either through short sale (which is way more advantageous for the association, but I will discuss it in another blog), or through Foreclosure/deed in lieu of Foreclosure.

So, while receivership can help to slow down the accumulation of debt, we, real estate professionals, are the ones who can solve the problem.

Very good deal, a South side unit with very good view, light and bright, 372 SF with tiny kitchenette, nice balcony, 7th floor. And a great price for under $45K.

The Seller bought it for $243,719 in January 2006.

I truly consider this a very good deal. Enjoy while you own and sell at the peak of the market. Not everyone is making $150K-$200K in 2-5 years, while enjoying vacations there yourself, and giving it to your family and friends .

I will be more than happy to give you the links to my other blogs about Plaza (see below), however, this unit is only for someone who can move right away.

Why is this deal good? Simply because there are many units that are short sales, and you never know whether you would be able to buy it (you need Lender’s approval and it is not guaranteed). The other thing that Lenders often come with demands to the Seller, asking them to bring a check to the closing, and often the Sellers do not have the money, so they do not agree and the deal is off. The Sellers of this unit have agreed to pay to the Lender, so the deal is ready to go right now, And, of course, the price. $44,900 is a great price.

Call me 386-405-4408 if you are interested in this terrific vacation condo-hotel unit in a premier Daytona Beach Resort.

http://activerain.com/blogsview/1070046/call-me-if-something-pops-up
http://activerain.com/blogsview/1070031/the-worst-thing-that-may-happen-to-a-condo-hotel
http://activerain.com/blogsview/1073617/how-to-buy-a-unit-in-plaza-resort-spa-talking-about-values
http://activerain.com/blogsview/959589/Why-Is-It-So-Expensive-Wrong-Question
http://activerain.com/blogsview/821535/Oceanfront-Unit-in-Plaza-Resort-Spa-For-Just-86900
http://activerain.com/blogsview/791490/The-Plaza-Resort-Spa
http://activerain.com/blogsview/715670/Plaza-Resort-Spa-Life-After-Bankruptcy
http://activerain.com/blogsview/696817/Daytona-Shoreline-Hotel-Tycoons-File-for-Chapter-11
http://activerain.com/blogsview/622333/Buying-a-Condo-Hotel-Real-Life-No-Nonsense-Scenario
http://activerain.com/blogsview/619452/How-To-Spot-A-Real-Deal
http://activerain.com/blogsview/570982/Plaza-Resort-Spa-Resort-Condo-Hotel-Market-Snapshot

I think I told him everything I knew about the Plaza, answered all the questions. The major point I was making was that if you want a exceptional value in the Plaza, you need to be ready to move fast. The longer you hesitate, the less chance that you can get a unit, or get it for a good price. All our super success stories are when we had an offer submitted within a few hours after a unit is listed, then we have  a chance to have the offer accepted before the competitors create a flurry of offers, and then you are  in a bidding war.

Anyway, I keep repeating that time is a major factor if the caller wants to get something in the Plaza, and there is no reason to research all the little things if they are not ready to write an offer on the spot. He says he needs to talk to his wife. Ha, as if he did not have time to talk to his wife before calling me.

I told him to talk to his wife, and then, if and when they are ready, let me know, and I would try to get them a deal. And I am absolutely sure that there will be no call.

Then, in 20 minutes, I find out that the unit he told me about was not listed in the local MLS, so there could be no competition. It is the best priced unit in the resort. I have customers who are looking for a unit, so I would not have a problem putting it under contract, but I feel that my caller brought the info to me. I would not know about the unit if not for him. I call him back and tell him that because he gave me the info, he has a great shot at it at seriously reduced price. The unit initially was sold in January 2006 for $307K, so buying it for under $50K is a terrific deal, but I needed the answer right away.

He is  hesitating and finally says “No”. They are not ready this time. Fine with me. I can now go to my other customers with this unit. But before I put down the receiver, my caller says: “Please, call me if something interesting pops up”.

Sorry, I will not call. I do not understand what “something interesting” means. This one-bedroom lowest-priced unit in a gorgeous oceanfront resort for under $50K, which was initially bought for $307K  is something very interesting. So if you are ready to buy “something interesting”, then you call me. We always have something very interesting. Price may be different, but this is your choice. So, call me when you are ready.

We all know that we can bring the horse to the water but we can’t make her drink. Well, my caller is up to his neck in water, but if he refuses to drink, I can’t help it.

BTW, I had an offer for this unit prepared in a few hours and submitted it the very same day.  Hope to hear good news tomorrow…. oops, already today. 

Click HERE to see MLS listings in Plaza

Jon Zolsky, your Daytona Beach Condo-Hotel guru

www.DaytonaCondoHotel.com