I am looking to purchase an existing motel to renovate and turn into a condotel...where the individual units become condo units, and the motel still runs like a normal motel to guests.
How can I legally pre-sell the units before acquiring or purchasing the motel? What kind of details would I need to give as to location of where the units are to prospective buyers of the units...meaning, is the city/town and descriptive of what its near good enough? How are things structured legally so that upon my purchase of the motel building and property, the deposits on the condo pre-sales are released to me?
Obviously the actual sale of the units is not occurring here, but a way of securing interested buyers and deposits released at some point.
I originally posted this in the "Innovative Strategies" room of the forum, but am posting it here since I do not know the best place for discussion of my topic here.
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
2y
One options you have is organize a large group of investors to offer "Fractional Rights" off as a pre-sale partner offer. Condotels are popular where I am here in Florida and offering fractional rights on pre-sale is great way to get some initial capital locked in up front.
You will need to draft up some legals and use an attorney for that but it might be worth your time/money. Units can still be sold but fractional's offer another way to create cash flow and STR wealth.
There are more than just a few ways to organize that type of arrangement but you may also be familiar.
With fractional rights, would I still retain full ownership of the land and building itself, or would the fractional rights also give them a ownership portion of those (vs just owning their condo "unit")?