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Archive for May, 2014

VIDEO: Myrtle Beach Real Estate – What makes Condotels so different?

Wednesday, May 7th, 2014

Condotels? Let me explain…

Today I am going to be talking about Condotels in Myrtle Beach and the Grand Strand areas. Today I am very excited to have Matt Richardson with me from Movement Mortgage. We’ve found that a lot of people don’t know the difference between a condo and a condotel, so Matt is here to discuss the financing side with us.

A condotel is a condominium that you can own like any other deeded property, but it is run like a hotel in a resort building. Some examples here in Myrtle Beach would be the Caribbean or Dunes Village. These are beautiful, beach-front properties that have individually owned condos in the buildings. To the average consumer it appears very much like a hotel with a front desk and all the rest of the expected amenities.

However, these type of properties requires some special financing, and that’s why I’ve brought Matt along today. Matt says the primary difference between a condotel and a regular condominium is the presence of a check-in desk. The check-in desk is usually what prevents a conventional loan from being offered on these properties.

So if I have a buyer with good intentions and approval to buy the property, but they want to use their hometown lender back in West Virginia, this would cause a problem. This is because the condotel property cannot be sold on the secondary market to Fannie Mae and Freddie Mac. The average buyer you get in Myrtle Beach may have an established relationship with a lender back home, but their banks are probably not familiar with these products and may refrain from lending them the money simply because of their unfamiliarity with condotel products.

My understanding is that those loans would have to be shelled, as we would call it. This is where the bank cannot sell it to the open market, therefore they have to keep it in-house. For most banks, this would not be in accordance with their business plan. This is why Matt and his company, as well as a few other in Myrtle Beach, have condotel programs and we wanted to let our potential condotel buyers know this before they start to buy one.

Hopefully this information will help you to avoid any major hiccups when you’re purchasing your condotel property in the Grand Strand.

Otherwise, if you have any comments or questions about this issue or if you would like to speak about Myrtle Beach real estate, then please give me a call and I would be more than happy to help you out.