Investment property

Greetings David

As a business owner, I wonder why you are asking a travel and relocation board questions about issues that are usually answered business to business.

My advice is to use your business contacts to explore opportunities in the Virgins and go from there. Any advice you get here would not be the kind that I would plan long term statigities for investment poentional PA or ROI, much less trust anyone other than my own sources for intel to develop futures.

Andrew

David - have you selected an island you would like to buy property on??

--Islander

David,
I would strongly echo Andrew's comments. If you're serious about your inquiry, I'd contact a local real estate agency, on the island which you want to move to, and ask them how their business is broken down (residential sales vs. commercial) without telling them what you're looking for. Then, you go with the agency that's more in tune with your needs and consult with them over the phone, and as your inquiry gets stronger, take a trip down there. You'll find a lot of comments on this board but most would be directed towards visitors, snowbirds et al. You'd want to get a professional opinion b4 sinking $$$ in. Good luck with your ventures wherever they may be.

Well, I'm asking at this board to try to get a more objective answer based on personal experience, than from a real estate agency whose motive includes selling a property. I thought that since this website includes settlement and relocation experience, that some readers of the posts may offer advice. The answers I get will supplement the information I would get from an agency. So, I'm still hoping for some advice based on experiences. Thanks.

Your intent is logical. I have found this board useful in searching around and feeling for some of the answers for which you are looking. And many answers have been very informative and interesting.
However, as I head to the islands again next week, I know only one thing for certain. The yearly, average daily tempature in the VIs is much more appelaing to me than that of Cleveland. Good luck.

Don

Hi David and Chris,

I don't know exactly what I would share here about my personal business experiences in the Islands. I would however, certainly warn you away if it was that bad. Get a good laywer before spending one thin dime.....they keep you out of trouble before you get in any. You want to stay on good terms with the islands residents, they are your future customers.....

Some income producing prospects on my wish list are/have been;

Condo's-look for established residences with a good reputation and location. Ask about history of storm damage claims filed, don't settle for word of mouth-check with policy holder for facts. Watch out for higher than average "condo fees", talk to current owners for additional expenses sometimes added on after entering into contract. Maintence is sometmes contracted, and if it changes, you could get stuck with really high fees. Explore private agencies that provide the same service for less if allowed.

Apt Complexes-These can multiply income rapidly, 6 packs and the like, but check the yearly taxes in some locations-a reasonable investment can produce 35-45% ROI on select properties. Careful tho- watch for code violations, historical landmarks, or near site that may qualify later and affect your zoneing/tax rights. Be certain that you know what your responsibilities will be to tennents, city, etc after a really bad storm. Once again, check claim history and review rates for replacement value! (important!)

Bar/Resturant-Self managed by owner is best bet here, you can watch the books and inventory. Search demographics of location, sometimes a local establishment has better income producing ability than a seasonal theme type. A local manager that you can trust can fill in for you, but better to man the post yourself first, train your manager and then start letting him or her step in to your role slowly.

Bed/Breakfast-One of my last choices, usually theme based, seasonal. Sometimes high overhead, Long term with fat wallet can do wonders, as once you have a good reputation, the repeats will keep you in the mix. The trouble with B&B's, is that guest often want to expolre other locations discovered during their visit with you and may stay there next time. Great idea if you were going to live and work there, solves several problems that way.

Retail-Commercial- A partnership to start is the best way to learn the business...several struggling business would welcome the financial support, but not help or advice from an outsider on how to run their operation. Best look for an off island coop that know how to let the islanders do what they do, you supply the cash. Everything from plumbing to tourism is on the table there.

I didn't mean to be short with anyone in my earlier post, and I hope some of the above will give you some idea of whats available here. I do recommend picking up the settelers handbook on this site, a strongly urge you to visit before making any commitments in writing or cash. It's up to you, I wish you well in your search and perhaps will meet you in the future.

Andrew

Don't forget gross receipts tax is an expense and insurance costs are high here. I haven't seen great appreciation here either.

Reply to "David - have you selected an island you would like to buy property on??

--Islander"

No, I'm open to locations. Thanks

Andrew,

Good post. Even though it was not to me, it shed light on many questions I had. We will be in St. Croix Christmas week at the Pelican Inn. We plan to look around for investment property then.
Your comments about B & Bs were especially relevent to us since that is what we are interested in. I still don't know about how quick I want to do this. My wife wants to be settled there by July. Sometimes it is easier just to let her take the lead as long as she is not leading us toward disaster and I don't think she is.
Right now we have half a foot of snow, it is still falling, and I have to go shoot photos at a basketball game. Ohio life and VI life, the weather is different.

Don

Hi Don,

B&B's are just not my cup of tea. Too many moving parts and time commitment for me. But I understand the attraction to owning one. There are some things you might consider before buying one....

If owner occupied and managed,
1. Do you have the experience to repair the various systems on site?
2. Do you have experience with standard accounting practices?
3. Will you have additional staff, and know local/federal tax law?
4. Do you have local contacts for food, supplies, equipment?
5. Do you have a back up plan if one or the other becomes sick/disabeled?
6. Will you depend on the income generated to meet all your finanical needs?
7. Are you familiar with the local health codes?

These questions are just to make you think Don, not in any way to discourage you from pursuing your dreams. It's heartbreaking to see anyone not prepared for the reality of their dreams, when if they just asked the hard questions, maybe they would not have been caught unprepared.

The islands do work different from what we expect stateside, but different does not mean it does'nt work, we just have to learn how it works here. Life is an adventure for the brave, and I admire your asperations. Below are 2 mls listings for B&B's and one for a 6 pack apt complex. They were on the ReMax St Croix website, you might want to see what else is available. I have worked with Joe and Julie St Marteen of ReMax, and have enough experience and confidence to recommend them.

Andrew

List #03-1385 B&B
List # 02-656 B&B
List #03-1211 six pack

You can always talk to the B&B owners I'm featuring on my web site www.villaway.com
They live on St. John.

Click on "Locals w/ Latitude." They are very friendly people and may be able to provide advice and some day-to-day realities of running a B & B.

Anne

Thank you for taking the time to reply to my questions. Andrew suggested "Best look for an off island coop that know how to let the islanders do what they do, you supply the cash. Everything from plumbing to tourism is on the table there."

Can you refer me to coops like that, and attorneys who are reliable for these purposes?

Hi Chris...

Let me begin by saying that I am terrified of recommending anyone anywhere, it's up to the person to choose whats best for them.

You basicaly have 3 choices, 1-you know someone that has inside information, 2-you have contacted and researched real estate brokers that specialize in business to business lending/partnerships, or 3-you have researched and retained an investment banker.

If you are an active market trader, your own broker may be able to hook you up with someone that is looking. Any referance from even a friend of a friend is better than a cold call. The risk factor is what your trying to reduce, and then its your judgment from there.

I have succeded using all 3 of the above sources, but homework, homework, homework. My father taught me that a lot of people will lose $20-50K, because it doesn't seem like a lot to risk, did little or no research, and figured they could trust their judgment of the opportunity. I do the same amount of groundwork if it's 10K, or 200K on the table, that means contracts, references, on site inspection, 2nd opinions, etc. And I still sometimes just break even.

It's fun to have some venture capitol, but be careful who you trust/follow, like everyone else in the world, I have to work just as hard for my money as they do.

I know because your asking, that your are trying to get a heads up before you start shopping, and thats the right thing to do, My best advice is to start with what you know best. If its real estate, then go there, if it's technology, then look at that, if its auto repair, or whatever, sharpen your skills there first, develop relationships and start building a team that can support you. Then start expanding.

Hope you have a ball and are a great success! I've learned that I'm never nervous in front of a large group of people, as long as I'm prepared, but if I'm not, well, its the same for business for me.

Andrew