|FAQ#1 - Do You Qualify To Buy A Resort?
The biggest obstacle I see resort buyers having is coming up with the
down payment needed for the resort they want to buy. In almost all cases you will
need to make a down payment equal to a least 25 percent of the selling price. In many
cases a resort makes financial sense only if you put as much as 50 percent down. Otherwise
the loan payments will be so high you can't make a decent profit and have money left to
live on. If you need to support a family you will very definitely need to make a larger
All banks consider small resorts and small tourism
businesses to be high risk ventures. You will need to demonstrate to banks that you have
assets which can be sold within 90 days to recover a portion of the amount they lend you
should you default on the loan.
What about owner financing or nothing down purchases?
I have never seen a nothing down resort sale. I have seen a lot of people try it without
success. However, I have seen quite a few owner finance deals. However, most owners do not
want to offer financing and usually do so only if they want to sell quickly.
Many owners will not offer financing because they
fear that if the new owner is not successful, they'll get the property back, and most
likely in worse shape than when they sold it. The key point to remember about owner
financing is that if an owner has enough equity in their operation to be able to offer you
financing, they have been successful operators for several years.
You can bet that in their years of experience they
have seen at least one resort sale with owner financing where the owner had to take the
place back when the people they sold to defaulted on the loan. When this happens
almost always the property comes back to the former owners in bad shape. So if owners seem
closed minded about owner financing, don't be surprised.
If you really need owner financing, be prepared to
give the owner the right to keep an eye on you. Bear in mind that if you run a resort well
for two or three years, the banks will look at you in a much more favorable light, and
more than likely will offer you a good loan package. At that point you can pay off the
former owner completety.
Information For Resort Buyers & Sellers
|1. Cooley's Guide To Buying A
A candid and comprehensive look at finding, buying,
and operating a small Ozark resort. Explains what to look for, and how to determine if the
resort owner lifestyle is really for you. Based on over 35 years experience of those
within the industry. A definite must-read for the serious would-be resort owner!
You Need A Real Estate Agent?
Not a sales pitch to use an agent, but a realistic look at the experience
needed for anyone buying or selling small resorts.
3. Frequently Asked
Questions - For Buyers and Sellers
to Main Cooley's Resorts For Sale Page
Cooley's OMW Tourism Sites
See what area resorts and tourism businesses look like and what they offer. Links
lead to main directories for each lake and the rivers. OMW Main directory gives links to
many area resorts in one place.
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