Condotel Financing
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Do you think that investing in hotels and motels is already out of shape? Do you want to invest in something similar but with a twist of the residential side? If so, then you need to look into the option of condotel financing.
Before we provide all the needed details on what condotel financing is, do you know what a condotel is in the first place?
What is a Condotel?
At first, you’ll have the idea that it’s a combination of two (2) properties, namely a condominium and a hotel/motel. And if you thought of that, you’re correct. A condotel is a hybrid property that is the mixture or the combination of a condominium that provides the public the option to rent it like how you would in a regular hotel.
You can look at it as a single property housing two (2) different uses. More often than not, condo-hotels would actually be part or be a branch of hotel groups, so they wouldn’t be an independent company either.
Isn’t it a Mixed-Use Loan?
The short and simple answer is no, condotel financing is not mixed-use. Mixed-use loans are loans that you take if you are going to invest in a property where there would be two (2) or more sectors or industries (i.e., commercial and residential, residential and industrial, etc.).
But with condotel financing, since you’re dealing with two (2) businesses or two (2) commercial properties, it can’t be placed under the category of mixed-use.
Understanding Condotel Financing
So, now that you know what a condotel (condo hotel) is, the idea of condotel financing might be somewhat self-explanatory to you. In the simplest terms, condotel financing is the act of you investing in a condotel by asking for funding or financing from a financial institution like a bank, the Small Business Administration (SBA), private money lenders, or investors.
How Do You Qualify For Condotel Financing?
Before you decide to apply for condotel funding or financing, you need to first meet a couple of requirements and eligibility certifications. Some of the most general ones include:
- Second-home and investment properties (maximum debt-to-income ratio of 50%)
- A minimum score of 500 (FICO)
- Asset depletion allowance
- Allow stated income business loan
These are just some of the most common and the most usual requirements for condotel financing. Now, there are also some requirements for a particular property to be eligible for this type of loan.
Qualifications of Properties For You to be Allowed For Condotel Funding
The following are the criteria in which properties would be allowed for condotel financing:
- The units need to have a full kitchen and a separate bedroom
- Building or project needs to be more than or equal to 50% for commercial – this will be determined by the appraiser
- Subject property needs to be 100% residential (or livable)
- The units need to be at least 475 square feet
Most lenders and financers would look for these qualifications before they say yes or approve funding or financing. However, these criteria may change; it’ll be depending on the company/financer/lender.
Where to Get Condotel Financing
So, where could you get funding or financing for your condo hotel unit?
Many financial institutions actually offer to fund for these; and in comparison to other types of real estate properties, they’re more lenient with condotels, why? – Because they know that it’s one of the best investments today.
Most, if not all commercial banks offer condotel financing. There are just some banks that are picky when it comes to the people they’ll be lending money to. In most cases, these banks would have stricter eligibility requirements, would ask for more documents, and would be stricter in choosing an applicant for eligibility. Many investors would also allow lending of money to condotel financing and it’s one of the least taken options – why? Because instead of asking for interest payments, they’d be more interested in asking for equity or share in your company. Other than banks, you can also ask help from the Small Business Administration or the SBA for the condotel funding that you need. They’re the country’s agency tasked to give a hand to businesses, so, you can expect to assist you! The only problem with it is that hundreds to about thousands of people ask the SBA for help in funding. Therefore, you might not get a chance to be in contact with them! Last but most definitely not the least would be private lenders. Private money lenders or commercial real estate loan groups might have higher interest rates and shorter terms. But, getting a loan from them is fast, easy, and you don’t need to submit irrelevant documents! For the best results and business outcomes, many businesses consider asking for the help and assistance of private money lenders! But out of all the many options, which loan group should you bank on?
Banks
Investors
Small Business Administration (SBA)
Private Money Lenders
Here in the entire state of Florida, we at Florida Commercial Real Estate Loan Group have been deemed and considered as the most sought-after commercial real estate loan group!
We offer a ton of funding and financing options to our clients – some of them are even too good to be true! Wherever you may be in the state of Florida, you can bank and trust us to help you with the condotel financing you need!
Whether you need condotel financing, hotel and motel loans, warehouse loans, and other types of commercial real estate loans, you can completely and fully count and bank on us!
Contact and Reach Out to Us Now!
Reach out to us via our hotline or via our email – we’ll gladly assist you!
In addition to that, we will even grant you a free sample computation of the condotel financing you need!
So, don’t waste time – give us a dial here at Florida Commercial Real Estate Loan Group and work with a commercial real estate loan group that is trusted by thousands of businesses and companies!
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:
