Montage Resort

Ten + Points for Successful Vertical Fractional Real Estate Development

Everyone seems to have to have a top ten list for this and a top five list for that. And so do I. In fact I have penned numerous articles on fractional real estate ownership, trying to zero in on the very most important components for success in the growing niche of vacation home ownership. As with any recipe, the ingredients vary with the chef. Perhaps one chocolate cake has more sugar, another more layers and some come straight out of a box.

Whatever the mixture, opinions differ on just the right measurements. The latest identifiers for success come from Dave and Emille Ellingson owners of the Meriwether Ranch, a working Cattle Ranch in Southwest Montana which offers rolling lots for single family vacation ranches. The offering will soon include vertical fractionals: vertical- meaning that it fits specific parameters.

Just what are these “rules” for success in a vertical fractional market?

1. It is located in a superb area for the primary activity. Ski resorts should have the finest slopes; diving resorts, the finest seas; golf properties, the ultimate in links; fly-fishing resorts the ultimate in clear streams.

2. The vertical fractional should then be in the primo location within that general area. If you want to experience the finest wines, a fractional property in the Napa Valley makes sense. If you are an art lover, perhaps an urban property is the way to go. If diving is your passion, Nevis is a pristine environment.

3. Go with a credible developer. You want to make sure they are in it for the long haul, have had previous success and are sensitive to the environment around them.

4. Goods and services should be reasonably available. Of course it is quite fine to be in a remote locale, but you shouldn’t have to drive forever and a day to get supplies in and/or out.

5. Fractionals are primarily purchased are convenience and value. The area should literally teem with expensive luxurious properties and the quality of the fractional property should match or exceed those around it.

6. The season for the primary activity should not be brief. A window of excellent weather on a north country lake or two weeks of cool ocean breezes in a jungle do not lend themselves to a successful venture or investment in this particular market.

7. Don’t get in on the tail end of the market. To win in the fractional world be the first “on your block” or close to it.

8. Marketing is of prime importance so have access to past and repeat customers. Those who already have an affinity with the area are your best bet to talk with.

9. If you do not have proximity to a commercial airport, make sure you have a decent jet approve private strip available. Your owners will undoubtedly be busy people who will not want to waste their precious relaxation time coming and going to their property.

10. Another terrific attribute is to have a wonderful, rich history to tell or a story to relate. Did Hollywood movie stars come to escape the pace of stardom? Do football heroes return for their golf vacations year after year? Did pirates lose pieces of eight among the reefs?

11. Finallybecause this list needed more than ten items to clearly make its statement, make sure you create a plausible use plan that matches the owners’ utilization of the Club component of the property. If they cannot use their purchase they will never be happy. And they will let others know of their disappointment. This 11th guideline is perhaps the most important for a vertical niche fractional property.

If you are thinking of getting involved in this exciting segment of real estate, do your research and ask yourself if your property will pass the 11 point test!

Carl G. Berry RRP is co-Chairman of Star Resort Group. He has more than 30 years of resort and urban development experience. Founded in 1978 Carl’s company, California Resorts, Inc. (dba Resort Development & Advisors), is the market leader in urban share projects such as The Manhattan Club in NYC, San Francisco Suites and Powell Place City Shares in San Francisco. Mr. Berry is a co-founder of The World’s Finest Resorts (now part of RCI’s Registry Collection). He has served as Chairman of the American Resort Development Association (ARDA) and and is a member of the Red Flight, Recreational Development Council of ULI. http://www.carlgberry.com

Tags: fractional real estate, real estate development, resort development, vacation home, vacation ownershipfractional real estate, real estate development, resort development, vacation home, vacation ownership

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Villas, condos, townhouses, twins, quads, and single-family homes at the beach or in beach resorts. Vacation homes offer a great opportunity for investors. The second home and vacation home market has been skyrocketing. The baby-boomer generation is in or approaching its’ peak earning years and not afraid to spend money on real value.

Beach Property

Across the board from coast to coast the Pacific, Atlantic, or along the Gulf beach front and beach areas have taken off. Some coastal resort properties have increased in value 60% and more over a 12 month time period. The areas are not only the prime high priced island and gated communities but almost any where near the ocean. A couple of years ago the quiet lower priced areas saw a big demand and their values have exploded. Two years ago the $140,000 rancher near the beach has now become the $350,000 beach house with no renovations just straight appreciation.

Making a Boat Load of Money

Friends bought a 2 bed 2 bath 1000 sq ft condo near the beach (not on the beach) for $355,000 Feb 2005. 4 months later another friend bought in the same building, same size unit for $415,000. Now 10 months later another condo in the same building, same size unit sold for $495,000. Can you believe it $140,000 in10 months with no money down. There is a waiting list to buy these 23 year old condos they are sold over the phone when they become available.

1.4 Million Dollar Beach Front Condos

16 Beach front condos sold in 45 minutes. Average price was 1.4 million dollars the 2 penthouse units sold for1.8 million. The sale was pre construction by lottery. Each potential buyer either deposited or had a letter of credit for $200,000 in order to be placed on the list. Pricing was fixed by the developer on the day of the drawing no one knew in advance. The drawing process was very simple as your name was drawn you could pick which unit you wanted and at the pre determined priced. The buyers’ only decision was yes or no. The 16 units sold to the first 16 names drawn no one backed out. There were 190 buyers in the lottery. This year the second building sold faster and for more money.

Did you miss it? No way. The opportunities it appears are never ending when we are talking about vacation homes, second homes and resort properties. I have personal experience in each of these examples above. They took place along the coasts of North Carolina and South Carolina. To top it off mortgage companies are offering to vacation home owners and 2nd home owners 100% financing. How would you like to make $150,000 in a year with zero down payment? It’s unbelievable.

Bill Carey with over 30 years in real estate sales, investments, and home building offers a unique perspective to the buying and selling process of residential real estate for F*R*E*E consumer information and reports log on to http://www.CharlotteNCExecutiveHomes.com and see
“Insider Real Estate Secrets Revealed”
…a must-read for Home-Owners and Renters!
It’s a F*R*E*E 12-lesson e-course covering more than 20 topics exposing the realities behind buying and selling a home.
It Could Make(or Save) You Thousands of Dollars

See http://www.BillCareyRealtor.com and sign up for our monthly e-newsletter with tips for buyers, sellers, home owners and soon to be home owners.

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Tags: beach house, billcareyrealtor, real estate investment, real estate investor, second home, vacation homebeach house, billcareyrealtor, real estate investment, real estate investor, second home, vacation home

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