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Sort of Late to the Party About Condotels!

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Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Got LSI "Service Bulletin" the other day, just getting around to reading it. "Condotels -- Appraisers are liable for failing to recognize them"

Just think how many tens of thousands of units were appraised around the country as Condo's and not Condotel's.

It appears all of a sudden LSI is moving the monkey off their backs and on to the backs of the low fee appraisers.

If a person is doing a Condo unit and has the experience who s/he not know what a Condo-tel unit is and Fannie would not loan on it. I would think if they did the appraisal and fail to note it was a condo-tel it would indicate a lack of knowledge or fraud. Am I wrong? Either way it would be a violation of USPAP I would think.
 

aussie ken

Member
Joined
Mar 11, 2005
Professional Status
Retired Appraiser
State
Australia
Got LSI "Service Bulletin" the other day, just getting around to reading it. "Condotels -- Appraisers are liable for failing to recognize them"

Just think how many tens of thousands of units were appraised around the country as Condo's and not Condotel's.

It appears all of a sudden LSI is moving the monkey off their backs and on to the backs of the low fee appraisers.

If a person is doing a Condo unit and has the experience who s/he not know what a Condo-tel unit is and Fannie would not loan on it. I would think if they did the appraisal and fail to note it was a condo-tel it would indicate a lack of knowledge or fraud. Am I wrong? Either way it would be a violation of USPAP I would think.

Sorry Ray......whats a condotel?........... We have individual privately owned units here in Australia which are held in Strata Title (individual Govt Guaranteed Title) with an owners corporation for the maintenance of the building and common areas.......plus we have what are called serviced apartments which are still strata title but are used for for travellers or visitors for short stays.......the later are generally overpriced and fully furnished...........
 

Michael Tipton

Senior Member
Joined
Sep 25, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Sorry Ray......whats a condotel?........... We have individual privately owned units here in Australia which are held in Strata Title (individual Govt Guaranteed Title) with an owners corporation for the maintenance of the building and common areas.......plus we have what are called serviced apartments which are still strata title but are used for for travelers or visitors for short stays.......the later are generally overpriced and fully furnished...........

Ken, condotels were the subject addressed in FNMA Announcement 06-12 dated mid year 2006. Attached is a pdf file of the announcement for your review.

Ray, another issue associated with condotel appraisals has been the failure to adequately address the income flow/income approach of the unit.
 

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  • FNMA Condo-hotel.pdf
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JRS at OBX

Elite Member
Joined
Jun 13, 2006
Professional Status
Certified Residential Appraiser
State
North Carolina
Some of those condo-tels have become such a joke, the prices have fallen and some of them are actually cash-flowing!! :Eyecrazy:
 

aussie ken

Member
Joined
Mar 11, 2005
Professional Status
Retired Appraiser
State
Australia
Ken, condotels were the subject addressed in FNMA Announcement 06-12 dated mid year 2006. Attached is a pdf file of the announcement for your review.

Ray, another issue associated with condotel appraisals has been the failure to adequately address the income flow/income approach of the unit.

Thanks Michael...........its exactly what we call a service apartment........same beast just a differant name. We have a brand new 7 storey boutique hotel opened in Wollongong where a singel one bedroom suite of typically 40-50m2 was selling for $460,000 with guaranteed rent returns.........I wish the dummies buying these beasts would realize that their future return actually accounts for 30% or more of the purchase price.
 

Ray Miller

Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
Ken, condotels were the subject addressed in FNMA Announcement 06-12 dated mid year 2006. Attached is a pdf file of the announcement for your review.

Ray, another issue associated with condotel appraisals has been the failure to adequately address the income flow/income approach of the unit.


In this area you sure would not want an appraiser to address the income flow/income approach. Those high pressure sale people would never get a unit sold.

I have been listing to there BS for some thirty years. They could clean my horse or cattle barn in less then an hour they way they pitch it.

The truth would kill them.
 
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