Re: Financing a dream? Reality bites. - Posted by Eric C
Posted by Eric C on February 17, 2001 at 12:53:54:
Hi Robert -
You don’t say, so I’m going to assume that:
- you don’t have any comps; and
- you don’t have much experience running a hotel (which is what this really is)
My apologies if that is not the case.
A couple of points here.
Comps are more important that ever when you deal outside of your “territory” whether that territory is your city, your state, or your country.
I don’t know whether 1.95M is a fair price or not. I can tell you that I regularly am offered condos and other properties (often beachfront) for $35K-$50K U.S.
Most financing in that part of the world is tied to the dollar. You may have heard, that our new Treasury Secretary announced a change in currency policy yesterday. That’s not good for you. It means that financing will be more expensive and difficult to obtain.
That’s not all. The IRS instituted some new regs that went into effect on Jan 1. These regs make it mandatory that all banks having any U.S. activity of any kind withhold 30% or submit W-9’s on each such account (customer, etc). Audits will be frequent and thorough. I fully expect Britain,France and others to follow suit.
This will not help the economies of most Carribbean nations.
So, to sum it up: if you’re dead set on this type of dream, go for it. But do your homework first.
You want a sneak preview? Get a job running one of these things. Find out if you love it, or if you’re in love with the idea of it. Big difference.
Another thing. Trying something is really the best way to learn and it’s something that’s espoused daily on these boards.
But with a project of this size, DO IT WITH YOUR OWN MONEY FIRST!
Is it possible? You bet.
Are you ready for it? I seriously doubt that.
PS - if any of you are wondering just how the IRS can make and ENFORCE such a sweeping new regulation, just ask. I assure you that it will be far easier (and more successful)than you think.