# Fractional ownership - FL transition



## Wonka (Feb 18, 2008)

Lately, I've read more & more stories about condo projects stalled in the FL market that are hoping to redo themselves as fractional ownership properties to ensure financing.  Apparently, banks & others are very reluctant to offer financing on condo projects in this difficult market, and require significant pre-sales.  I guess fractional ownership doesn't.  Hyatt is hoping to sell fractionals on Siesta Key on what is an empty lot right now.  The cost, $250000-$750000 for six weeks.  The article didn't mention the maintenance fees.  What do you think?  Is this the future?  I can't imagine paying that much for six weeks of use (even if I had the money).


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## Steamboat Bill (Feb 18, 2008)

Typical two bedroom fractionals run about $200-$300k in most tourist markets.


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## spirits (Feb 18, 2008)

*Stay away from fractional IMHO*

A few realtors around here think fractionals will probably be a poor investment vehicle for most people.  Cons:  Buying at top dollar from the developer.  There will be many dog weeks that most owners will own in their portfolio.  The only ones making money will be the developers.  Too much money chasing too many units at inflated prices.  Will flood the rental market when all come on stream.  Pro:  You will be buying a dream at top dollar. Oops that just may be a con.
One unknown is how many are buying these fractionals for their own use.  These will probably be the most satisfied.  However, here in Canada these units are being marketed as an investment strategy so I think many are buying for investment. Just my opinion


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## GregGH (Feb 18, 2008)

Fractional have been around long enough you would think a re-sale market would be easy to see and comment on -- some how I find it hard to find many fractional re-sales on the  market to see how the value holds up.

Given the exchange companies that specialize in 5 star properties - fractionals could give an interesting option.

Greg

ps - here are some links I have found so far -- do you have any more ?

http://www.timesharebrokerservices.com/buyers/index/content/fractionals/

http://luxuryfractionalguide.com/LFG_LT_4.php

http://www.partialowner.com/index.asp


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## pwrshift (Feb 18, 2008)

Here is a site that might answer some of your questions:

http://www.condohotelcenter.com/fractionals/featured-properties.html

Fractionals and Private Residence Clubs are somewhat like upscale timeshares, but similar in concept to buying multiple TS units.  In addition there are many levels of luxury.  I suspect they would be subject to deep discounts on resale but am also surprised to not see many available on the secondary market to date.  The rules vary from one developer to another so it makes it somewhat difficult to make direct comparisions.

I would guess that the buyer of a fractional has decided this is pretty much the only place he wants to vacation - like a home away from home but one he goes to every year - because there isn't a whole lot of choice for 'trading' within the 'family' (like Ritz Carlton).  

Brian


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## GregGH (Feb 19, 2008)

pwrshift said:


> Here is a site that might answer some of your questions:
> ....snip ....I would guess that the buyer of a fractional has decided this is pretty much the only place he wants to vacation - like a home away from home but one he goes to every year - because there isn't a whole lot of choice for 'trading' within the 'family' (like Ritz Carlton).
> Brian



Brian

There are a number of trading companies for 5 star properties --so while it is somewhat limited to trade that Ritz unit with the few others RC's -- there is a long list of other fractionals offered on exchange ( albeit I do NOT have any first hand trading experience ).  Registry Collection seems to be the largest (so far - II is starting their own division for hi-end units - but it has been slow )
http://www.theregistrycollection.com/how_to_exchange/exchange_grid/

So - back to my question -- where are the owners of fractionals selling them?  How is their value holding?   If TS sell at 50% -  what do fractionals sell for ?

Greg


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## Steamboat Bill (Feb 19, 2008)

GregGH said:


> There are a number of trading companies for 5 star properties --so while it is somewhat limited to trade that Ritz unit with the few others RC's -- there is a long list of other fractionals offered on exchange ( albeit I do NOT have any first hand trading experience ).  Registry Collection seems to be the largest (so far - II is starting their own division for hi-end units - but it has been slow )
> http://www.theregistrycollection.com/how_to_exchange/exchange_grid/



The Registry Collection is no where as active as II and I doubt many people use them. They actually contacted HCC to inquire about swapping a few weeks with them.


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