By James Johnson
Founder and CEO
With real estate struggles come opportunities for a new focus
After a decade of the most spec- tacular expansion and contrac- tion in the history of the real
estate market, there is no better time to
examine new business opportunities.
Rarely, if ever, has the climate for real
estate investment been so good, especially when it comes to vacation and resort properties.
to tap this market, mortgage originators must identify customers and
properties, assess opportunities, and
provide access to purchase funds. You
also should understand some key differences between vacation homes and
• investment properties are typically
purchased for much less than vaca-
• investment properties are typically
located closer to the buyers’ primary
the National association of Realtors
to recreational opportunities such as
those afforded by an ocean, river or lake.
deposed baby boomers as the primary purchasers of vacation homes.
although these generations share
many of the same values, their members often regard vacation property
differently from one another.
“Because many resort
areas are located away
from population centers,
the level of competition
from other mortgage
originators could be minor.”
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More than half of boomers who purchase a vacation home envision themselves retiring there. On the other hand,
gen X buyers consider it a second
home for their own use and that of family and friends.
Both generations, however, show little interest in purchasing raw land and
constructing a new home. In addition,
neither group likes ongoing costs, such
as homeowners’ association dues.
although the vacation market will
continue to be nearly equally divided
between these two generations for the
next few years, mortgage originators
entering this market should pay careful
attention to the shift in buyer dynamics. Buyers wanting a party pad often
seek different property types and locations than those buying a vacation
home they plan to move into full-time
in a few years.
Resort-property loans will often involve purchase transactions for single-family detached residences. Refinances
and loans for land, construction, log
homes and condominiums will provide
Because many resort areas are located away from population centers,
the level of competition from other
mortgage originators could be minor.
Often, local banks comprise the only
existing loan market. these lenders
have been hit hard by the market collapse and generally offer only conservative loan products. this leaves many
lending needs unmet.
there are five keys to working with
vacation properties and their buyers:
1. know the customers: technology al-
lows many people to live where they
used to vacation and to vacation
where they used to live. Nowadays,
you can conduct business from al-
most anywhere. the baby boomer
generation will fuel the retirement
home market while continuing to
be a significant — but declining —
component of the vacation market.
generation X will increasingly domi-
nate the vacation-home market.
Both generations use e-mail and the
© 2011 Stout Street Funding LLC All Rights Reserved.
James Johnson, also known as JJ Johnson, has
worked in the mortgage industry since 1977.
He has held executive-level positions with
Internet, communications and net-branch companies, and has extensive expertise originating
resort-property loans. Johnson is founder and
CEO of ResortLoanSource.com, a lead-generation service that uses Web and social
media to connect resort-property customers
with lending sources and is based in the resort
community of McCall, Idaho. Reach Johnson at
(208) 634-9770 or firstname.lastname@example.org.