Selected Negotiations and Financings of
David M. Disick, Esq., The Fractional Consultant



Franz Klammer Lodge
Private Residence Club
Telluride, Colorado

David M. Disick, Esq.,
Fractional Real Estate Developer, Trailblazer, Innovator, Pioneer

How to Control a Proposed Development Parcel at Minimum Cost and Risk

David was attracted to a large, prime land parcel in thec ommercial heart of Telluride’s Mountain Village. It adjoined both the ski lifts and the golf course.

David sought to control the land at minimum cost and risk in order to facilitate raising seed capital.

The owner of the mountain and golf course was considered a hard-nosed negotiator.


David spent considerable time in face-to-face meetings with the owner to assure him that he and his team of professionals could and would bring the development to a successful conclusion.

David didn’t take “No” for an answer. He pointed out that the development’s pioneering “fractional ownership” structure would result in higher year-round occupancy at the resort. This would produce higher revenue to the mountain and to the community than conventional “whole ownership” second homes.


The owner of the mountain made the unprecedented decision to grant a cost-free option on the land.

This was a major first step in the development of Franz Klammer Lodge (“FKL”) Private Residence Club (“PRC”), the world’s first “PRC.”1

1 ”Private residence club” is a category in today’s “shared ownership” real estate industry. It refers to leisure homes offering the highest levels of luxury, quality and service.

The term was originally invented to distinguish FKL from timeshare. It resulted from the brainstorming efforts of David, his development team members and consultant Peter Yesawich.

How to Find High-Net-Worth Investors for a Fractional Real Estate Development

Finding suitable high-net-worth investors was difficult.

Then, as now, many high-net-worth investors preferred “commercial” properties, such as, existing apartment and office buildings, shopping centers, etc.

Such properties tend to generate a reasonably predictable year-round cash flow and bottom-line return. Fewer individuals are willing to invest in seasonal resorts with fluctuating cash flows and uncertain returns.

Many investors considered FKL too risky because:

  • It was new construction in a place they had never heard of.
  • It was located in a hard-to-access mountain resort whose cash flow and profit depended on the vagaries of weather.
  • It featured a novel fractional ownership structure that seemed, at that time, perilously similar to timeshare.

David called on contacts from his Wall Street days whose clients included high-net-worth individuals willing to invest in a high-risk, high-return venture.

David educated the financial representatives about the extraordinary investment opportunity at Telluride—a year-round destination resort on the verge of being discovered.

He explained the benefits of the novel PRC concept—the smart new way to own a luxury second home.

His written financing presentation described the major aspects of the opportunity, including:

  • Mountain expansion and improvement plans,
  • Architectural plans,
  • Marketing and sales programs,
  • Track record of the development team members; and
  • Financial schedules and pro formas showing a substantial return on and of the capital investment.

David raised the initial capital needed.

In addition, he persuaded the investors to fund initial development expenses even before any pre-sales of the residences had been made.

How to Secure Consumer Financing for a Fractional Property without “Comps”

Then, as now, lenders determine a mortgage amount based on a property’s appraised value. Appraisers set this value by comparing the contract price of the subject property to the prices of recently closed comparable sales (or “comps”) in the area.

There were no market “comps” for FKL, however. It was the first “Private Residence Club.” No property yet existed that had been purpose-built to offer FKL’s level of quality.

As a result, appraisers wanted to value the one-tenth fractions at ten percent of comparable whole ownership closing prices—far less than the Fair Market Value of the fractions evidenced by the fractional sales contracts.


David pointed out that the Fair Market Value of a fraction was a number
separate and independent from whole ownership “comps” and reflected the greater value that fractional ownership affords.

He patiently spent large amounts of time negotiating with lenders and appraisers to convince them that buyers were willing to pay a “premium” for a luxury property that offered:

  • A lower purchase price and
  • Lower upkeep expenses plus
  • A higher quality leisure experience than otherwise possible at the amount invested in the fraction.2

2 This is a variation on the well-accepted business practice: Pizza sold by the slice costs more than buying an entire pie. If people don’t want or need the whole pie, they don’t mind paying a little more to buy by the slice.


David succeeded in raising consumer financing through Textron Financial Corporation.3

3 Since fractions exist in most developed countries these days, suitable fractional market “comps” may already exist for use in appraisals. Where they do not, however, then justifying the contract price, may prove successful.




South Village at Sugarbush
Warren, Vermont

David M. Disick, Esq.,
Vacation Home Developer

How to Control a Proposed Development Parcel at Minimum Cost and Risk

David had his eye on a large, well-located land parcel adjacent to the Sugarbush ski resort in Vermont. The land, owned by the mountain, offered ski-on, ski-off access to the slopes. It was zoned for seventy-two free-standing leisure homes.

The mountain’s owner was known to be difficult.

This was David’s first experience as a resort real estate developer.


Using skills honed in his Wall Street law practice, David tenaciously negotiated over time with the ski resort owner. He generated the owner’s confidence in his ability to find the financing needed to develop the parcel.

David requested a cost-free option on the land. This would mitigate financial risk both to himself as well as to potential investors.

Results: The owner of the mountain granted the cost-free option on the land.
How to Raise Seed Capital at the Local Level
Challenges: David needed to find affluent individuals willing to risk investing with a first-time developer.

David met personally with fellow second home owners at the resort. He described the mountain’s planned expansion and improvements.

These substantial capital investments, he explained, would increase the value of new homes with ski-on, ski-off access to the resort.

David’s written financing presentation included, among other items:

  • The detailed business plan;
  • Credentials of the project’s team of professionals;
  • Marketing and sales programs;
  • Pricing strategy;
  • Financial schedules and pro formas; and
  • Anticipated return of and on investment.
Results: David raised the necessary seed capital from a half dozen affluent individuals who already owned a second home at the resort.
How to Secure Institutional Financing for the Development
Challenges: David had to find development financing from an institutional source willing to lend for new construction by a developer who did not yet have a real estate track record.

David cultivated a one-on-one relationship with a bank vice-president and communicated regularly with him by phone. This helped him establish his credibility.

David’s written financing presentation further demonstrated his mastery of what it takes for a successful development. This documentation helped convince the banker that David possessed the knowledge and expertise needed to lead a profit-making venture.


The Royal Bank & Trust Company (the New York City-based subsidiary of the Royal Bank of Canada) granted financing for the development.

David brought this large development to a successful conclusion within 1.25% of budget. The bank subsequently showcased the project as an example of how properly to administer a major resort real estate development.

How to Secure Consumer Financing
Challenge: David needed to persuade a large regional bank to offer consumer financing to buyers of homes in the development in a time of tight credit.

Through repeated personal meetings with the vice-president of a local bank, David sought to convince the banker that he was able to manage a large project successfully.

David provided further back-up information in his detailed, written financing presentation.

Results: First Vermont Bank agreed to provide the consumer financing that the home buyers at South Village at Sugarbush desired.




Low-Income Housing at Telluride Ski and Golf Resort
Telluride, Colorado

David M. Disick, Esq.,
Financial Consultant to Telluride

How to Finance Employee Housing at a Luxury Ski Resort

Telluride’s permits to expand obligated the mountain to build affordable employee housing. The mountain needed a way to finance this construction.


David found a government program (no longer in effect) that offered tax credits for constructing low-income housing. This program, however, had been conceived for the needs of inner cities. It had never been applied to employee housing at a luxury resort.

Thinking outside the box, David met with Colorado government officials. He explained that Telluride’s proposed housing would greatly benefit the resort’s low-income employees. It thus fulfilled the intent of the program.


Telluride’s employee housing project, Big Billie’s4, secured government approval. The development was sold to high-net-worth investors seeking tax credits and was successfully built.

4 Big Billie’s commemorates a celebrated lady of the evening who was well-known during Telluride’s free-wheeling mining days




Kirkwood Mountain Resort
Kirkwood, California

David M. Disick, Esq.,
Fractional Real Estate Financing Consultant to Kirkwood

How to Secure Fractional Development Financing Despite Tough Times

Securing development financing for a proposed new Private Residence Club at Kirkwood Mountain Resort was difficult due to tough economic times.

In addition, there was stiff competition for funds from larger, better-established and more accessible resorts also located in California’s Lake Tahoe region.


David generated competition among lenders for this substantial financing opportunity by making simultaneous financing presentations to several different potential funding sources.

His detailed written financial presentations showed that the development would be profitable. This generated lender confidence in the development.


Financing for The Mountain Club by Kirkwood Resort was successfully obtained through Silver Portal Capital.




Crested Butte Mountain Resort
Crested Butte, Colorado

David M. Disick, Esq.,
Fractional Real Estate Financing Consultant

How to Secure Fractional Development Financing Despite Tough Times

Securing consumer financing was difficult in the face of tightening credit markets and competition from more established Colorado resorts.

Here, too, David confronted the challenge of convincing appraisers and mortgage lenders unfamiliar with fractional real estate that the Fair Market Value of a fractional property is an independent number related to contract price, not to whole ownership “comps,” as discussed above.


David’s Wall Street legal and financial skills and his development expertise proved valuable in convincing an institution to grant the needed financing.


The fractional consumer financing closed successfully.

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