Singing Pig

Have been watching units come and go on Building I. It appears units are changing hands on less expensive floors 1 - 3 quite quickly as they become available and the unavailable. So it appears fairly easy to resale. All of floor 4 is still unsold as it was only introduced/added a few weeks back.

How much is floor 4 going to cost ?

I think $389,000

Maypole,
I have been looking into financing. The developer's finance contract is for Citibank prime rate + 4%. Wall Street Journal (wsj.com) has average prime 7.25% on 28/12. That gives 11.25%, which seems high, even for the Caribbean. 4% over libor would be closer to the 8% stated in the prospectus.

Financing 70% LTV at 11.25% you would be just cashflow neutral at 8% rental yield...just idle thoughts as I mull over the options. 

Thanks Bigbozo,

That's even higher than I thought, though US rates are coming down slowly now.

One option is to finance using a UK loan or increase in existing UK mortgage(s) but this could also be risky if the $/£ rate changes significantly - it has changed in our favour lately but no one can predict how this might change over say 10 years, let alone a few months! 

Let's hope the recent credit crunch doesn't put American's off having expensive holidays in the sun! My view is that this resort is more aimed at the cash-rich, who are less likely to be affected by economic events. Maybe we'll be back to boom by the time they finish it anyway! 

11.25% is too high to make sense, it would only be worth keeping for potential capital gains. I am hoping to be able to be able to pay off the 70% with the income generated over 7 to 10 years, not just the interest.

Are you sure about that, I was expecting the interest rate to be around 8% as illustrated on the investment proforma on the website.

I found this on some other website which mentions Citi Bank Prime  plus 2

Q)  Does the Developer offer any financing?

A)  Yes, the financing offered is as follows:

                    Up to 70% Financing
                    10 Year Interest Only Promissory Note
                    Balloon payment
                    Citi Bank Prime plus 2 Points adjusted annually, approximately 8.25%
                    Non Recourse Note
                    No Pre-payment Penalty

Hello All,

I am new to Singing Pig. My wife and I live in Iowa, USA. We contracted for a unit in the South Caicos development a couple of years ago.

I spoke with Brian Rahls, the developer, today. I don't have any momentous news to report, but he did tell me some things I thought would be worth sharing with you:

1. The opening of the resort is still tied to the completion of the new terminal at the airport on South Caicos. The construction of the terminal is in progress, and is expected to be completed at the end of 2008. The resort will open approximately 90 days after the completion of the terminal, i.e. around March or April 2009.

2. Sales continue to be strong. About 2/3 of sales are from Americans, 1/3 from Europeans. Sales have not been adversely affected by the decline in real estate prices in the U.S.

3. Two more price increases are expected before the opening date.

4. 490 units have been erected, and the work on the interiors are in progress.

5. He says a recent study of purchase and rental prices in on-the-ocean resorts in the Caribbean suggests (to him) that his pricing model is very competitive. He says average one-bedroom units are $600K USD and per-night rentals are $600 USD. I take that with a large grain of salt - a perusal of internet purchase and rental sites reveals much lower numbers.

Hope this helps.

Regards,

Fairfielder