Caicos Beach Club

The Resort Residence can be used for personal use or placed in a Lodging Plan.

Personal Use:
As the Owner of the Resort Residence you may use your Resort Residence at any time. There is a monthly maintenance fee and a use fee when occupied.

Lodging Plans:
There are two different Lodging Plans available

Lodging Plan #1

The Resort Residence is placed in the Lodging Program with all other Units. All Units are rented on a rotational basis. When your Unit is next available your Unit is rented and upon the end of the rental period the Unit returns to the end of the availability list. Once the other Units are rented your Unit will be rented again.

At the end of each quarter, the gross Lodging Plan revenues for your Unit are computed, the management fee and use fees for your Unit are subtracted from the gross lodging revenue and the net lodging fee is placed in a holding account on behalf of the individual Unit Owner within 45 days of the end of the quarter. Owner funds in the Holding Account are disbursed pursuant to written instructions from the Owner.

In addition to the receipt of net Lodging Plan proceeds, as a member of the Lodging Plan, Resort Residence Owners shall receive Two (2) Free Bonus Weeks of usage per year in the Resort Residence type purchased. Neither Maintenance Fees nor Use Fees shall be due from the Owner when utilizing his Two (2) Free Bonus Weeks of usage per year. While the Owner is vacationing, their Resort Residence is in the Lodging Plan earning revenue. In the event the Owner desires to stay in a larger Resort Residence during the Two (2) Free Bonus Weeks, the Owner shall pay the difference between the posted rack rate of the larger Resort Residence and the Resort Residence owned.

For additional usage (subsequent to the 2 free weeks of usage), the Resort Residence Owner may at any time call within 14 days of when they would like to vacation and if the Resort is less than 70% occupied, the Resort Residence Owner may reserve any size Unit available with the only charge being a housekeeping fee and a nominal administrative fee. While the Owner is vacationing, their Resort Residence is in the Lodging Plan earning revenue.

Lodging Plan #2

The Resort Residence is placed in the Lodging Plan on an annual basis. All Units in the Lodging Plan share in the income and expenses, the Units are not treated on an individual basis. There is a monthly maintenance fee, a management fee charged when the Resort Residence is rented and a use fee charged only when the Resort Residence is occupied.

At the end of each quarter, the gross Lodging Plan revenues are computed, the management fee and use fees are subtracted from the gross lodging revenues and the net lodging fees are placed in a holding account on behalf of the Owner within 45 days of the end of the quarter. Owner funds in the Holding Account are disbursed pursuant to written instructions from the Owner.

In addition to the receipt of net Lodging Plan proceeds, as a member of the Lodging Plan, Resort Residence Owners shall receive Two (2) Free Bonus Weeks of usage per year in the Resort Residence type purchased. Neither Maintenance Fees nor Use Fees shall be due from the Owner when utilizing his Two (2) Free Bonus Weeks of usage per year. While the Owner is vacationing, their Resort Residence is in the Lodging Plan earning revenue. In the event the Owner desires to stay in a larger Resort Residence during the Two (2) Free Bonus Weeks, the Owner shall pay the difference between the posted rack rate of the larger Resort Residence and the Resort Residence owned.

For additional usage (subsequent to the 2 free weeks of usage), the Resort Residence Owner may at any time call within 14 days of when they would like to vacation and if the Resort is less than 70% occupied, the Resort Residence Owner may reserve any size Unit available with the only charge being a housekeeping fee and a nominal administrative fee. While the Owner is vacationing, their Resort Residence is in the Lodging Plan earning revenue.

Resort Residence Owner’s desiring to stay additional time during the year (previously used their two free weeks) and making a reservation more than 14 days in advance, shall pay Fifty (50%) of the posted rack rate of the Resort Residence size reserved while earning revenue from the Lodging Plan at the same time. While the Owner is vacationing, their Resort Residence is in the Lodging Plan earning revenue.

The maintenance fee of $300US per month covers the fixed expenses such as insurance, fixed electric for the Unit, electric for common areas, etc.

The use fee covers variable expenses such as daily maid service, linens, laundry service, additional electric, water, fungibles, etc.

The management fee covers the management cost associated with operating the Resort and Rental of the Resort Units.

No there is not a guaranteed minimum occupancy however on the website the investment proforma was done very conservatively. The occupancy rate at 60% and a rental rate approximately 50% below the annual rental rate (should use the seasonal rental rate which is much higher) yields a 15.8% net return after all expenses and the mortgage/promissory note payment have been deducted.

You can either use the two free weeks or rent them out through any means you would like. The two free weeks cannot be put into the Lodging Plan because it is a conflict of interest in regards to the rental responsibility we have to all the participants in the Lodging Plan.

Yes, if the Unit is in the Lodging Plan #1 the Unit can be used by the owners at any time.

If you put the Unit into Lodging Plan #2, the Unit is put in for the whole calendar year and cannot be used by the Owner that calendar year. This is a decision made each year three months prior to the start of the next calendar year. The Owner can get usage through the Owner Bonus Program.

The Developer will resell the Unit or there are approximately 20 Real Estate Brokers/Offices in the Turks and Caicos Islands which will be happy to sell the Unit for you. I would suggest the Developer since the primary market is anyone staying at the Resort.

The Island of South Caicos has an InternationalAirport with both Customs and Immigration. A brand new air conditioned terminal building and tower are being built by the Government for this Island. The InternationalAirport on South Caicos is approximately 4 miles from the Resort.

The property is purchased under a lease hold for 99 years.

Please note the following advantages to owning a Ninety-Nine Year Lease as opposed to Fee Simple Title:

The Developer is marketing the Resort Residences approximately 50% below current Market Value in The Turks and Caicos Islands

The Real Estate Transfer Tax in the Turks and Caicos Island is currently 9.75%. The Developer has negotiated the Transfer Tax from 9.75% down to 3% on the transfer of the Ninety-Nine Year Lease. For Example, The average price for a One Bedroom Ocean View Resort Residence is $650,000.00US as opposed to the current price at Caicos Beach Club of $309,000.00US. The transfer tax on the $650,000.00US purchase price would be $63,375.00US paid to the Turks and Caicos Island Government at closing as opposed to the transfer tax on a Caicos Beach Club Unit of $9,270.00US or an out of pocket savings at closing of $54,105.00US.

This Resort Residence is not an individual’s primary residence but is, in fact, an investment property. The average term of ownership in investment properties is between Five to Ten years. Why then, would someone want to pay an additional $54,105.00US at closing to own a property between 5 to 10 Years.

In addition, if someone were to purchase Fee Simple Title they would not fall under the Developer’s Development Agreement with the Crown, which we call an “umbrella of rights”. A few examples of rights that would be lost are as follows:

The Purchaser would have to pay duty of 35% on the furniture in their Unit (Developer pays no duty).

The Purchaser would pay the higher Transfer Tax illustrated above

The Purchaser would pay Higher Individual Insurance Rates

The Purchaser would have to pay the Resort Residence operating expenses separately and on their own, as opposed to the expenses paid out of the Lodging Plan. Not only would an Owner have to pay the bills on their own, they would pay the bills at a higher rate both by economies of scale (i.e.: the more people that pay the same bill in the Lodging Plan lowers the cost per person) but the rate at which items are charged will be higher, i.e.: an electric bill paid for a Unit owned under a 99 year Lease in the Lodging Plan is paid at the discounted Developer Electric Rate negotiated in the Development Agreement which is 2.5 times lower than the regular electric rate charged.

If owned in Fee simple, there would be no Lodging Plan as everyone would have to pay their own electric, water, etc. In the Lodging Plan all expenses are paid by the Management Company on behalf of the owner.

The Developer has the right to import unlimited foreign labor to keep costs down which labor can only be used to operate and maintain the Resort Residences operating under the Development Agreement.

Although there are currently no annual real estate taxes in the Turks and Caicos Islands, one never knows if this may change in the future. In the Development Agreement if any taxes whatsoever are ever imposed, the Developer has a 25 Year exemption from these taxes which term commences to run from the Completion of Phase I. By way of example, at the current real estate tax rate in the State of Florida, on a $650,000.00US property value, the annual real estate taxes would be approximately $15,000.00US.

These are just a few examples of why someone would want a Ninety-Nine Year Lease and the protection of the Developers Development Agreement as opposed to receiving Fee Simple Title, which does not carry these rights. In addition, every time a cost is increased the annual return on investment decreases.

Phase 1A consists of 274 Ocean View One Bedroom Resort Residences. This Phase will be completed 6 to 8 months from now. These Units are being sold at under construction discounted pricing (approximately 40-50% under current market price). Later phases will be sold at full price and sold as fractionals, not whole Units. The Fractional Units are not placed in the Lodging Plan.

Therefore one day when you want to sell the Unit we can sell it for you (we are no longer selling whole ownership) or there are 20 real estate companies in the Turks and Caicos Islands that will market it for you.

There are four more phases planned all together. These phases shall be built out over a Ten Year period. The Phases will be a Marina, Private Homes, Fractionals as previously mentioned and a Casino Phase. There will be gaming when we open Phase 1A.

There are only 15,000 local people in all of the Turks and Caicos Islands. There are approximately 10,000 Brits and Canadians. There is virtually no crime in the Islands. The Islands are under British rule therefore there are no guns allowed. These Islands are part of the British West Indies which consists of Cayman, Bermuda and the Turks and Caicos Islands. These Islands are so popular because they are safe and clean. You can walk on the beach at 11PM and no one will bother you. It's not the Bahamas, Jamaica or the Dominican Republic where there are millions of people and there always will be crime and poverty. In the Turks and Caicos Islands the locals either own their own business or work for someone. The main areas of business are Offshore Banking, Tourism and the export of fish, lobster and conch. There is National Health Insurance and everyone either works or is taken care of through the local Government.

The Islands are not inexpensive to vacation in however it is tough to locate a room for rent in the season because the Islands are safe and clean. In fact after September 11 when world tourism was down, the Turks and Caicos Islands tourism was up 20% that year.

There are no taxes (Corporate, Personal, Annual Real Estate, Estate/Inheritance Taxes) in the Turks and Caicos Islands nor is there any reporting requirements. There are NO forms to be filled out pertaining to income in the Turks and Caicos Islands.

Obviously you have to be prepared for Hurricanes. These Units are engineered to be Hurricane proof. The entire building including the walls, the roofs and the balustrade railings are pre-cast, pre-stress concrete. A 200 MPH wind can lift approximately 40 pounds per cu. ft. The pre-stress concrete roof weighs approximately 160 pounds per cu. ft. The windows and sliding glass doors are Hurricane impact resistant glass. In addition the foundations are 40 feet above sea level therefore you do not have to worry about flooding or tidal surge.

Yes, the financing offered is as follows:

• Up to 60% Financing
• 10 Year Interest Only Promissory Not
• Balloon payment
• Citi Bank Prime plus 2 Points adjusted annually, approximately 8.5%
• Non Recourse Note
• No Pre-payment Penalty