Oct. 11, 2018

Financing Your OCEANFRONT Condo Purchase

Welcome back to our Series on Oceanfront Condos! Last week, we discussed some important information to help you determine what type of property investment might be best suited to your needs. CLICK HERE TO READ THAT ARTICLE

At BRG, we're lucky to have some of the most knowledgeable Oceanfront Condo Specialists in the Myrtle Beach area. This week, one of our experts, Mark Loomis has shared some information about financing your oceanfront condo purchase. 

Since almost all oceanfront condo buildings in the Myrtle Beach area are "condo-tels," buyers cannot obtain conventional, 30-yr fixed rate loans.   It is also quite likely that you won't be able to use your local hometown lender either because most lenders are not familiar with condo-tel loans.   A condo-tel loan requires a certain lender with experience in these particular types of loans. Knowing this upfront will save you and your REALTOR a lot of time and disappointment. It's awful to find the perfect oceanfront getaway and start dreaming of family beach vacations only to find out you're not going to be able to get the loan terms you were imagining! 

A large majority of lenders sell their loans to Fannie Mae. Since Fannie does not purchase condo-tel loans, many lenders cannot make the loan.  You may be an immensely qualified buyer, but the property may not be! If you have a particular lender that you have used in the past and really want to use, contact them and ask if they actually do "condo-tel" loans.  Be sure to clarify that these loans are not purchased by Fannie Mae and that In order to do a condo-tel loan, the lender will need to keep the loan on their books for the length of the loan since they can not sell it unless they sell it to a private investor.  Make sure you have this information sorted out with your preferred lender. If they determine they cannot make this type of loan, there are local lenders in the Myrtle Beach area who are familiar with these types of loans and have the experience and the ability to work with you on them.

A couple of the top lenders for condo-tel loans in the Myrtle Beach area are: 

CresCom Bank   

CresCom will finance 1 BR or larger condo-tels. They do not finance efficiency units.   

For a 1 BR condo (under 750 heated sq. ft), you should expect to pay 25% down payment for a 15-yr amortization, 30% down payment for a 20-yr amortization, and 35% down payment for a 30-yr amortization.  They have 5/1, 7/1, 10/1 ARMs as well as 10-yr, 15-yr, 20-yr, and 30-yr fixed rate. Rates will be approx. 5.25% - 6.375% with no point. You can pay 1 point and lower rate by 0.50%.  

For 2 BR or larger condos (over 750 h.s.f.), you should expect to pay 25% down payment.  

NOTE: Very important:  CresCom does NOT charge a higher down payment or a higher interest rate for a buyer's 2nd condo or condo-tel purchase in this area.    Their 1st purchase will be classified as a 2nd home and next one as an Investment.  Most lenders will charge higher down payments and higher interest rates for the Investment purchase, but right now CresCom does not.  So, if you are interested in buying 2 condos at the same time, then CresCom will give you the same rate/terms for both loans as long as you qualify for the loans.  

SandHills Bank

Sandhills is the only lender who can finance an efficiency as long as the loan amount is $50,000 or higher.  

Sandhills will ONLY do 2nd home loans, not Investor loans for condo-tels.  

For a condo-tel loan with SandHills Bank, you can expect to pay a 25% down payment, up to 25-yr loan term.  Efficiencies are limited to 15-yr loan term.  Only ARM's offered.  1% origination fee.   

In addition, you must maintain a deposit account with SandHills Bank and have the loan payment auto-drafted from that account.   Rates are usually a little higher than CresCom.   

Other lenders include: 

CCNB (Coastal Carolina National Bank) 

CCNB will loan on condo-tels but they have limitations.  For example, they won't loan on conversion properties which are those oceanfront buildings that used to be hotels and then were converted to privately-owned condos during 2004-2006 (Landmark, Coral Beach, Compass Cove Pinnacle, Monterey Bay, Caribbean phase I, Sandcastle South, Breakers Boutique, Patricia Grand). You can learn more about these conversion properties in our previous article: CLICK HERE

South Atlantic Bank  

South Atlantic Bank typically sells their loans to a private investor so the terms may not be as favorable as those lenders that keep their loans in-house.  

The following OCEANFRONT condos are currently available for sale in the Myrtle Beach area.

Please call us at 843.883.6600 and ask to speak with one of our Oceanfront Condo Experts.

Myrtle Beach Oceanfront Condos

Myrtle Beach Oceanfront Condos - 3 Bedrooms

Myrtle Beach Oceanfront Condos - 4+ Bedrooms

Oct. 3, 2018

Buying an Oceanfront Condo - Part 1

Oceanfront condos in the Myrtle Beach Area are legendary! They come in all shapes and sizes, from high-rises with full-on resort style waterparks, to low-key, low-rise buildings tucked away on quiet stretches of sand. 

Whatever your style, two things are certain: 

1. The Myrtle Beach area has what you're looking for and 

2. Nothing beats a morning cup of coffee on an oceanfront balcony.

With that being said, the vast amount of options along the Grand Strand can be overwhelming. At BRG, we're lucky to have some of the most knowledgeable Oceanfront Condo Specialists in the Myrtle Beach area. Mark Loomis is one of the best and he's put together some valuable information to help you in your search.

PRIMARY RESIDENCES

The first thing you'll need to determine is whether this will be your primary residence or your 2nd home or investment property.

If you are in the market for a primary residence, then of course, any building will work but many primary residents want to be in a quieter building rather than in the high traffic tourist area of downtown Myrtle Beach.

2ND HOMES

If you are in the market for a 2nd home, then, again, every building will work. So you'll need to start to narrow it down by some additional wants such as the number of bedrooms wanted, approximate square footage, and price. 

Then, you'll need to determine the type of building that fits your needs. Along the Oceanfront, there are a number of smaller, typically wood-frame buildings built in the late 1970's and early 1980's. Almost all Oceanfront buildings 3 stories or less will NOT have an elevator, so you'll need to determine whether stairs will be an issue for you. Even 1st-floor condos in wood-frame buildings typically have a few stairs leading to 1st floor units. These types of buildings typically only have an outdoor pool and maybe a hot tub. Many will NOT have washer/dryers inside the condo but may have a laundry facility somewhere on premises. 

Then, there are mid-rise buildings (4-6 stories) that were built around the same time frames. You'll find a number of these types of buildings in the Surfside / Garden City Areas. These buildings will usually have an elevator and typically only a pool and/or a hot tub. 

And last, there are the concrete/steel high-rises (7+ stories). These tend to be the more "resort-style" properties like you find in Myrtle Beacn, North Myrtle Beach, and a few in Surfside / Garden City (like Water's Edge and Royal Garden).  These buildings have elevators, many will have on-site check-in desks, and most have multiple water amenities including indoor and outdoor pools, hot tubs, and possibly lazy rivers. These buildings operate more like a "hotel” and are commonly referred to as "condo-tels” (a hybrid word combining "condominium" with "hotel"). The term "condo-tel" comes from Fannie Mae and in short, if the property can be rented daily/weekly (regardless of whether there's an onsite front desk), then it is most likely a "condotel".  (Even some non-oceanfront condos can be classified as "condo-tels".  If the lender can google the property and see that rental companies and/or individual owners are renting the property daily or weekly via anything like AirBnB, HomeAway, VRBO.com, etc., then they will likely be classified as a "condotel" for lending purposes.)

INVESTMENT PROPERTIES

Finally, we have the high-grossing "rental machines". If you are an Investor looking for the highest ROI (return-on-investment, which equals the net income after all expenses divided by the purchase price), then you will want to look at the concrete/steel high-rise "condo-tel" buildings and almost all of them are in the Myrtle Beach city limits. There are also a few options for these types of condos in North Myrtle Beach, such as Avista, Prince Resort, Beach Cove, and the luxurious North Beach Plantation.

The age of the building is an important factor. Most concrete/steel high-rises were built from 1980-1986. After the changes in tax laws in 1986, developers stopped building new resorts. 

From Wikipedia: 

"After the lengthy peacetime expansion of the 1980s, inflation began to increase and the Federal Reserve responded by raising interest rates from 1986 to 1989. This weakened but did not stop growth, but some combination of the subsequent 1990 oil price shock, the debt accumulation of the 1980s, and growing consumer pessimism combined with the weakened economy to produce a brief recession.” 

The recession referenced was from July 1990-March 1991. So, from 1986-1996, you saw no new Oceanfront resorts built along the Grand Strand other than a few smaller, boutique-style buildings like Emerald Cove and Beach Club I, II, and III. A few existing buildings DID add a tower to their already-existing resorts (Beach Cove added Tower II with 2 and 3 bedroom units in 1996; Beach Colony added the ocean view tower in 1995; Sands Ocean Club added the "Executive Tower" in 1994; Landmark Resort added the south side ocean view tower in 1996). 

Then, another wave of Oceanfront high-rises were built with Long Bay Resort opening in June 1997. From 1997 – 2009, we had at least 2 dozen new resorts built and completed. The last new building to open was North Beach Plantation, which opened in January 2009.

Most Myrtle Beach area Oceanfront high-rises were built either in the last 21 years or 32-38 years ago, roughly. The newer resorts tend to have better amenities onsite including lazy rivers. Some feature onsite restaurants, golf stores, sundry stores, tiki bars, etc. Dunes Village even built two indoor water parks that are 15,000 square feet each. As an investor, you will typically want the newest building with the best ROI. These newer buildings are the ones that are currently seeing rental incomes increase more dramatically than older buildings, thus increasing their resale value. The higher the rental income, the higher the resale price. There are other variables that help with price increases, of course, but increasing rental income is one of the strongest drivers of price.

 

NOTE: Investors should plan on an ROI on an Oceanfront condo in the 5-6% range max. This assumes, however, that the buyer is using the onsite front desk. In this day and age where owners can more easily rent their condos on their own, then the ROI could increase a bit by cutting out the onsite rental management fees to some extent. Not all buyers will want to rent it out on their own, but, for those who can, this is the way to go for the highest ROI. The 2nd highest ROI will be to use the onsite front desk. Most Oceanfront condo buildings will charge somewhere between 35-45% rental management fees. You have to add another 5-8% on top of that to account for miscellaneous charges such as travel agent commissions, annual maintenance agreement, annual business license fee, replacement fee (typically 1% of the monthly gross rental income), repairs, carpet cleanings, etc. But the NET income an owner will receive from on-site management is almost always higher than what they will receive if they use an off-site rental agency. Off-site rental agencies will typically charge around 15-20% but there are usually extra fees such as the cost of cleaning the condo after each renter, etc.  When you add up the "extra" fees from these off-site rental agencies, you may end up closer to 30-40% of the gross income. 

The added benefits of using onsite: Need more towels, just call downstairs. Get locked out of your room, just go to the front desk. If you use an off-site company, and you need more towels or get locked out of your room at 2 AM, you have to call the rental companies emergency number and wait for someone to come assist you. It can be more of a hassle to your renter when you use off-site rental companies.

 

NOTE: If you are interested in both a 2nd home AND high rental income, you will need to assess your priorities: How long do you plan to use the condo: 1-2 weeks per year, 4-6 weeks per year, or much more often? In other words, what is MOST important to you...personal usage OR high rental income? If you only plan to use your condo personally for just a few weeks per year, then it sounds like you really want the most rental income possible, correct? If so,  then you're probably looking for more of a "rental machine." If rental income is your 2nd priority and perhaps you're just looking for enough to offset the taxes and HOA dues, then you may be happier with a 2nd home style building.

 

STAY TUNED! Next up on the blog:

FINANCING YOUR OCEANFRONT CONDO PURCHASE

 

 

 

 

 

 

 

 

 

 

May 14, 2018

Harley Week 2018

Harley week is here and the attendance levels are returning back to historic levels. It is great to see this group returning to Myrtle Beach city and to the surrounding areas of Murrells Inlet and North Myrtle Beach. The area is full of entertaining events this week from drag racing and bikini contests at the North Myrtle Beach Drag Strip to the Beaver Bar and Suck Bank Blow in Murrells Inlet. Old Chicago Pizza and Taproom are also offering entertainment and great food. Diversity, one of our personal favorites is playing this Wednesday at Calli Bakers in North Myrtle Beach from 3-6pm. The Grand Strand will be enjoying great weather all week, so get out and enjoy a little piece of sunshine.

May 8, 2018

More Entertainment Broadway at the Beach

Broadway at the Beach has done it again and we are not talking about Top Golf, soon to come to corner of 29th Avenue and Grissom. We are talking about the addition of even more restaurants, stores and rides to make this area even more of a destination for vacationers.

Kentucky Mist Distillery with moonshine and other liquors made from fruit is now open. Grumpy Monk, a local favorite for craft beers and food will be open soon. Pavilion Parks of Broadway are expanding and undergoing renovations, and the Broadway 360 Observation Wheel will soon offer guests an amazing view of this area of Myrtle Beach that we have all come to enjoy.

Broadway at the Beach ties in very well with vacationers, second homeowners and locals looking for a great night out. If you are searching for a home that is a close ride or walk to the shops and restaurants of Broadway at the Beach, we have a few options. Plantation Point is a great neighborhood with access to the Intracoastal Waterway. These homes start in the mid to high $400s. Then you the condos of Magnolia Place, Magnolia North and Magnolia Pointe for a 2nd home starting in the low $100s. Then there are several blocks on the north side of Broadway at the Beach that have homes starting in the $200s that are not in subdivisions. Make sure you check our Advance MLS search for homes near Broadway at the Beach and other Myrtle Beach areas.

Posted in Myrtle Beach
May 7, 2018

Thunderbolt Park at Market Common

Get ready for some more outdoor space to enjoy in the Market Common area of Myrtle Beach. This project is coming to the area Summer of 2018 with an additional 3 miles of paths for pedestrians and bicyclists. In addition, this project will house some of the Air Force memorabilia that is already on display around the Market Common area. There will be more benches and swings along these trails as well. Market Common area was development just over a decade ago, and has really taking shape with great food, entertainment and some of the most desired residential neighborhoods in the Myrtle Beach. Belle Harbour, Park Place and Westlake at Montrose are a few of the must see newer communities, or you can view all available neighborhoods on our Market Common page. We can't wait to visit the new Thunderbolt Park.

Posted in Myrtle Beach
June 30, 2016

New Townhomes at Wild Wing Plantation

Fairways At Wild Wing - Condos for Sale

Wild Wing Plantation is a beautiful golf course community in the Carolina Forest area of Conway. One of the new communities is a condo community with Wild Wing Plantation, Express Homes, a division of D.R. Horton, is building three and four bedroom condos each with a single car garage known as Fairways at Wild Wing. Depending on the square footage the larger homes will have the master bedroom on the first floor. The condos in Fairways at Wild Wing offer comfort and easy living. Two of the floor plans are listed are listed below.

The condos in Fairways at Wild Wing are starting at $180's and to $225's. This community is close to Coastal Carolina University, Horry-Georgetown Technical College, Conway Medical Center, great schools, shopping, and there is NO HOA capitalization contribution. For similar communities you might like to visit Kiskadee Parke at Wild Wing or World Tour in River Oaks. Be represented by an expert, call Beach Realty Group at 843-267-4627.

Posted in Conway
July 22, 2015

Home Sales Increase over Last Year

Homes Sales and Prices Increase over Last Year

The home sales (residential and condo) reported to Coastal Carolina Association of REALTOR®s which covers Horry and Georgetown counties has also seen an increase in prices and a decrease in listings with more properties sold from 1/2014 through 7/21/15. According to the reports provided by CCAR there was a 2% decrease in the number of Residential and Condo listing with an increase of 3.24% sold. We also saw an increase in the price sold, 3.60% this year over same time last year. The Myrtle Beach (CCAR) area increase is slightly higher than the national average.

May 7, 2015

3 in 10 Americans Looking to Buy

Three in Ten Potential Home Buyers Will Commit

Chase Mortgage did a national survey that shows that three in ten ‘potential buyers’ are planning to buy real estate within the next 18 months. 32 percent of those that took the survey cited low interest rates and 20 percent because rents are rising in their area making buying a better and more affordable option. Approximately ¾ of those that responded are afraid that rising prices are going to keep them from buying. However, in our area, as reported to the local MLS (Coastal Carolina Association of REALTORS®), there has only been a one percent increase in the average purchase price January thru April this year over last year for a single family home or condo/townhouse.

Myrtle Beach is still an affordable place to buy real estate, pricing is steady and rentals are becoming more difficult to find so rents are increasing. Talk to a lender to see what options are available locally that you might qualify for and talk to your Beach Realty Group agent. For more on the survey click here.

April 27, 2015

2015 Palmetto Heroes Program for Home Ownership

Palmetto Heroes – 2015 

SC Housing has added the SC National Guard Active Army or Air to the list of Palmetto Heroes who are eligible for home buying assistance. For 2015 the list of those that are our Palmetto Heroes are:

  • Law Enforcement Officers
  • Correctional Officers
  • Teachers
  • Nurses and Certified Nursing Assistants
  • Firefighters
  • Veterans
  • Emergency Medical Services Personnel
  • SC National Guard – Active Army or Air

The program is for 3%, 30 year fixed mortgage interest rate and up to $8000 down payment assistance ($5000 for existing home). If you don’t qualify for the Palmetto Heroes program there are other programs from SC Housing that you might qualify for. 

What a great way to honor and help those who are so important to us – give them a better chance in achieving the American Dream of home ownership.

 

2015 Palmetto Heroes

March 26, 2015

Myrtle Beach Area 2nd Fasted Growing Metro Area

Myrtle Beach Area ranked 2nd in the fastest growing metropolitan areas in the country

The US Census Bureau released figures about the Fastest Growing areas in the states and the Myrtle Beach area ranked 2nd. The area they define as Horry County in South Carolina and neighboring Brunswick County in North Carolina. The Villages in Florida ranked first. Two other areas in South Carolina ranked in the top 20, Beaufort and Hilton Head. With our warmer weather compared to our neighbors up north it does not surprise many of us. Besides the warmer temperatures the amount of snow we don’t get is wonderful!

With more people moving to the area they will be looking for homes in the Myrtle Beach area. This means a plus for those in the construction industry – people looking for new homes, retail stores and in so many other areas of our economy. Read the article in The Sun News…