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The Downtown Plaza, Toronto Condo Hotel

Question

At the Downtown Plaza condo hotel in Toronto, Canada, who will pay maintenance in the guaranteed rental plan?

Joel's Response


The owner. He pays for everything except your debt service.

Question

If the buyer doesn't choose the guaranteed 6% rental plan, how will rental income be divided between the owner and management?

Joel's Response


All revenue for the property will be pooled together so that each member will get an equal share on a pro rata basis.

Question

How would you get financing from the U.S. for the Canadian condo hotel?

Joel's Response


My lending source says that it is probably not going to be possible. He suggested dealing with any of several Canadian banks. My sales consultant at the property said that Canadian banks are financing these purchases, but may request 35-40% cash down. This is obviously higher than the 25% required by the developer, as per the contract. Of course, when you factor in the conversion rate of money, it is more like 30% cash down US.

Question

What are the terms for payment of the 25% deposit?

Joel's Response


1% of the purchase price is due at the signing of the contract. There is a 10-day rescission period. (This is shorter than the 15 days buyers have for properties that are located in Florida). After the 10 days pass, the first 1% is considered at risk, and an additional 1% is due at the beginning of each month for the next 24 months.

Question

What are the yearly proposed taxes on these condo hotel units?

Joel's Response


In the worst possible scenario, it will be $4,000 per suite regardless of the size. In the best case scenario, which may be unlikely, it will be 1.2% of the assessed value, which is typically 60% of the market value.

Question

When will construction begin on this Toronto condo hotel and when will the building be complete?

Joel's Response


October 2005 construction begins, and two to three years from that point, depending on how the winters affect the construction schedule, the property will be completed.

The above question(s) were submitted via e-mail by a visitor to www.condohotelcenter.com. The answer was prepared by Joel Greene, a licensed real estate broker with Condo Hotel Center which specializes in the sale of condo hotel units and fractional ownerships in private residence clubs.

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