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Oceanfront Condo Units for sale on Hilton Head Island. Prices from $70,000 on the beach in sunny Hilton Head Island
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COPYRIGHT/2004 DMG
Hilton Oceanfront ResortA Condo Hotel
An Overview Presented by Dunes Securities Corporation
COPYRIGHT/2004 DMG
Essential Facts
Hilton Oceanfront Resort units are registered as securities with the SEC.
Public purchase or sale of units are made through FINRA member firms.
Dunes Securities Corporation is a FINRA member firm.
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort
Operates as a condominium hotel. Mariners Inn Owners Association controls
common elements and supervises hotel business.
Allegiance Hospitality Service Company, LLC, a division of Omni Hotels, operates the hotel for the owners association.
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort Situated on 13 acres in Palmetto Dunes Resort,
Hilton Head Island, SC 937 feet of Atlantic Ocean beachfront 324 room luxury condominium hotel Facilities include:
– Conference facilities– Restaurants– Spa/Health Club– Outdoor pools– Shops
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort
Three types of units:
– 296 Inn Rooms – 530 sq ft– 8 Inn Suites – 712 sq ft– 20 Ocean Suites – 850 sq ft
COPYRIGHT/2004 DMG
Unit Floor PlansRenderings are not to scale
Ocean Suite Inn Suite Inn Room
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort
Palmetto Dunes was voted No. 1 Family Resort in Continental U.S. and Canada by Travel and Leisure, January 2003.
Just completed in 2004 a $6 million renovation of rooms, reception lobby, hallways and corridors.
COPYRIGHT/2004 DMG
PALMETTO DUNES
Travel & Leisure Reprint
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort
Unit owners share in rent and other revenues.
Unit owners get a fee simple deed. Unit owners share maintenance and
operating costs. Unit owners preferred room rates
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort
Tax Advantages– About 95% of unit price is subject to
depreciation– Losses not subject to passive activity rules if
owner chooses to materially participate. (common area is considered passive)
– Owners are considered engaged in a trade or business.
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort
Typical Allocation of Purchase Price– 70.34% to building– 24.01% to Furniture & Fixture– 5.65% to Land
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Hilton Oceanfront Resort
Important Documents:– Master Deed establishing Mariners Inn
Horizontal Property Regime– By-laws of Mariners Inn Owners Association– Net Fee pooling agency agreement.– Amended and Restated Management
Agreement with Atlantic Resort Managers, Inc.
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Hilton Oceanfront Resort
2008 Yearly Association Assessments *
for common area ownership– Inn Room - $4,840– Inn Suite - $5,760– Ocean Suite - $6,220
* Billed Quarterly
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Hilton Oceanfront Resort Rental Pool Distributions
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Inn Room 12,257 11,557 10,115 8,424 8,790 11,094 11,426 12,537 11,578 10,650
Inn Suite 18,703 16,114 14,103 12,225 12,687 16,499 14,936 16,380 15,010 13,720
Ocean Suite 25,568 23,116 20,236 15,757 16,378 21,491 17,697 19,420 17,745 16,162
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort
Things to Consider:– Owners are assessed a maintenance fee for common
areas ownership.– Owners are subject to risks inherent in ownership of
securities and real estate.
– Beachfront properties are susceptible to erosion, hurricanes and tropical storms.
– Hotel occupancy can fluctuate and cash flow can be uneven and insufficient to cover operating costs including management fees.
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort Investment Comparison:
– Alternatives:Invest $140,000 in a money market fund yielding 1.4% per annum.Invest $140,000 in a 5-year CD paying 4% per annum.Invest $140,000 in a Hilton Oceanfront Resort unit.
– Calculated results assume 35% marginal tax bracket: assumes 28% federal and 7% South Carolina
Money Market Fund Pre-tax income, assuming a 1.4% annual interest rate, equals $1,960. After-tax return equals $1,274. 5-Year CD Pre-tax income , assuming a 4% annual interest rate, equals $5,600. After-tax return equals $3,640. Hilton Oceanfront Resort Based on 2004 operating results Net income (cash flow) before depreciation equaled $3,255 but net cash flow when combined with tax savings from depreciation equaled $5,405.
COPYRIGHT/2004 DMG
Hilton Oceanfront Resort Net After-tax Return
– Revenue – Inn Room – 2004 $8,790– Less: Assessments and RE Tax 5,535*– Net income (cash flow) before depreciation 3,255
– Allowable depreciation 9,144
– Taxable loss -$6,143
– Tax savings at 35% $2,150
– Cash flow + Tax Savings $5,405
* excludes personal property tax
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Hilton Oceanfront Resort
SEC Rules Require:– Dunes Securities Corporation to collect a
financial questionnaire from anyone it places an offer to buy a Hilton Oceanfront Resort unit for.
COPYRIGHT/2004 DMG
Dunes Securities Corporation
Is a South Carolina corporation affiliated with Dunes Marketing Group.
Is a member of the FINRA. Is a member of SIPC.
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Dunes Securities Corporation
Our only business is that of a broker/dealer representing buyers and sellers of Hilton Oceanfront Resort units.
DSC earns a commission on all transactions based on the gross selling price of a unit. The commission is paid for by the seller of the unit. Our commission rate is 10%.
COPYRIGHT/2004 DMG
Dunes Securities Corporation
COPYRIGHT/2004 DMG
Dunes Securities Corporation
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