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Friday, July 9, 2010

Key West Guesthouse - Bank Owned !





Just Listed, but not by me, the Nassau House guesthouse located at 1016 Fleming Street in the heart of Old Town Key West. This property is now Bank Owned and it has been re-priced to sell. This listing agent describes this property as follows:
"Bank Owned Guest House in Old Town Key West. Well known 9 room Guest House with full kitchen, outside decks and porches. Lush landscaping. Spacious rooms, each individual in it's location in the house, as well as it's theme. Lock out units provide flexibility in booking larger parties. Lagoon pool and Tiki hut provide relaxing area to congregate, as well as decks and porches on each floor. Priced to sell. Bank says Bring Offers."



Nassau House is a well established guest house located right in the heart of things at 1016 Fleming Street. For point of reference the famous Eden House is located across the street (it was the home of Goldie Hawn in the movie Criss Cross filmed in Key West in 1992). Click the MAP for the best view of the location. (Google maps give viewers great perspective views of the area as a whole and then zeros in onto the neighborhood. The street view is great as well.) The location is great because guests can walk to any number of nearby restaurants (Azur, Michael's, Cafe Sole, The Marquesa Cafe, A&B Lobster House, etc.). The Tropic Cinema, the Red Barn Theatre, and the Waterfront Playhouse (where you will occasionally see something deliciously naughty) are all within a ten minute walk. The seaport is only a five minute walk and the nightlife on Duval Street is a comfortable stroll both going and returning.

This property has been listed for sale over the past two years at an asking price as high as $2,750,000. It is now offered at $1,700,000. There are nine guest rooms but there are only five City of Key West transient licenses. The city is aware that this guest house, like many others, has more guest rooms than it has licenses. There is an inherent risk in buying a place with less licenses that the law requires. Yet, the law has not been enforced for years. Someday a new city administration may enforce the rules and only permit guest house owners to rent only the number of rooms for which they hold a valid transient license. My advice to a prospective buyer is to discuss the legal ramifications with a real estate lawyer in Key West. My opinion is that the city will continue to take the bed tax and look the other way. That being said, CLICK HERE to review the mls information and to view more photos of this property.

I used to own a guest house in Key West. I bought a place that had been foreclosed and I got a very good deal. I regret now that I sold it. But what I know now more than ever is the value of a good location and a good name. Tourists know what they want or expect for their money. People that want beachfront location and luxurious amenities don't stay in guest houses and vice versa. I suggest that a prospective buyer develop a good business plan that fits the expectations of guest house visitors and not to develop some grandiose miniature Ritz Carlton. Providing a clean and comfortable room, a friendly environment, and TV and internet that works, a pool and a place to get that enviable Key West tan plus a good cup of coffee in the morning are the framework for putting lots of heads in beds.

I think this property ought to sell fairly quickly at the asking price. I would love to work with a buyer that wants a Realtor that actually knows something about the guesthouse business. And having just listed or sold other guesthouses does not necessarily bring any expertise to the table. Like I said, I purchased a bank owned guesthouse and ran it. I know first hand what a prospective buyer will face. If you are looking to purchase a guesthouse in Key West and would like to see the Nassau House, please contact me, Gary Thomas, 305-766-2642 or send me an email at kw1101v@aol.com. I am a full time Realtor at Preferred Properties Coastal Realty, Inc. in Key West, Florida.

4 comments:

Anonymous said...

At this location and at that price this is a steal of a bargain for a Key West guest house! This outta go quick - and probably already has as I post! Good one Gary - hope you sell it as you really know the scoop.

Anonymous said...

I started to reconsider this, Gary, until I looked back at my pictures of it and did some research.

I could live with the location being less than prime, if the price was right. I could also live without all the rooms having the proper licenses, if again, the price was right.

If you happen to go by, look at the side of the house facing Nassau Lane. The wood siding on the third (okay, 2nd and a half story so we're sticking with city code!) has some serious paint peeling and also looks to be rotting where it meets the second story roof.

The roof also looks as though it needs replacing.

I'm not saying the home has deferred maintenance on all of it, but this was an area of interest to me.

Going back through old Nassau House websites from the Internet Archive, I noted that the double bed room hasn't been painted in over 10 years, and the comforters look strikingly similar to what is there still today.

From recent Trip Advisor reviews, the tile floor is broken up in at least one of the tree top suites (again, why is this? Somebody dropped something on it? It was put down wrong? Poor quality materials? Possible water intrusion from the aforementioned possible rotting wood siding?)

Another note there (and I'm not saying it's true... it is from Trip Advisor) is the current caretakers of the property were instructed by the bank to 'not put 1 penny in the property.'

I'm not saying the bank is obligated to do any repairs, but without any maintenance on the property, it will continue to deteriorate, especially in the warm, wet climate of Key West.

The third story window on the Nassau Lane side (again where all the rotted wood looks to be) also looks problematic to me.

The final thing I noted from my pictures is the outdoor staircase leading to the third floor. One side (the part going from floor 1 to 2) looks as though it rests on top of the first floor roof. In my opinion, and I'm not a contractor or engineer, but do know my way around the workshop quite well, this looks to be structurally unsound.

IMO, I don't think this will go fast. B. Foster didn't sell (and it was similarly priced, with a better location and off street parking)

With the possible problems, the location, and the current slamming of the good name on the property in reviews, I think a more realistic price is around $1.35-$1.4M.

We'll see though!

Robert

Gary Thomas said...

Robert:
Seven words int the mls link say it all "Priced to sell. Bank says Bring Offers."

You need to make an offer to find out the price the bank (or any owner) will sell at.

I think the million dollar price drop is already a recognition of sorts that the price was too high and that the place ain't in great shape. Eaton Lodge had been boarded shut for two years when I bought it. Bums sometimes lived under the main house. The place was a mess. We hired locals that wanted work and we all cleaned and painted and opened for business little over a month after we arrived in Key West. Five rooms the first night. More the next. And then we were full almost every night because we were in season.

We did major painting the next summer and other repairs. We added furnishings along the way. But we made money from day one!

The Realtor I worked with kept suggesting I look at Eaton Lodge when I was in Key West looking at properties. And I always turned up my nose. I didn't like the location 75 feet off Duval. Guess what, the guests loved it (except for the occasional noise).

I bought the same place at auction because I got a deal. I was forced to stop making lists in my head why not to buy it. I found one reason that mattered: the price.

Gary

Anonymous said...

I would have been all over EL at the time... I love the location and the price was obviously good at the time.

NH had a vacancy sign out every night back in March that I was there. Interesting to say the least considering it was prime season. Marrero's had no vacancy every night and I saw numerous times the current man tending the inn turn people away that were walk ins.

Anyway, like I said, I'll warm up to properties at good prices, even if the location isn't what I want.

Besides Artist House, there hasn't been a guest house sale in quite a while (and wasn't that 2008?) I'm not sure everyone is on board with what the prices really should be today.

I've got a lot of scouting to do this week so we'll see what happens.

Robert

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The information on this site is for discussion purposes only. Under no circumstances does this information constitute a recommendation to buy or sell securities, assets, real estate, or otherwise. Information has not been verified, is not guaranteed, and is subject to change.

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Key West, Florida, United States
I first read about Key West in a magazine called "After Dark" sometime in the mid 1970's. But it wasn't until March 1984 that I made my first visit to the island that would become my home. I had two weeks for a vacation and reserved a room at Colours Guesthouse (now Marrero's Guest House) for one week. I thought that if I didn't like Key West, I could always go back to Miami or Ft. Lauderdale for the rest of my trip. But after a couple of days in Key West, that was no longer a consideration. But when I wanted to extend my stay for the extra week I found there was no room at the inn. The guesthouse owner did find me a room at LaTeDa, the infamous guesthouse/restaurant. That's a story I'll write another day. But those two weeks in Key West gave me the realization that I had found Paradise. Key West has been my home since 1993 and my only regret is that it took me so long to get here. I am a full time Realtor at Preferred Properties CRI. Let me help you find your new home or business in Paradise. Living in Paradise is not a slogan, it's a way of life.