I thought it was clear that the killer was Lusman, who looked the way he did because he was far past the age when he should have been dead, but he was using black magic, and possibly needing to kill others, to survive. He knew the secret location because it was his buildinghe had it built that way. The old guy had been friends with Lusman, but I also thought it was clear that he was a bit crazy or just senile by that point.
I do agree that a lot isn't spelled out in systematic detail for the viewer, but I didn't think that was at all a bad thing in this case, as the film has more of an Argentoish dreamlike feel (a la Suspiria, Inferno, etc.), in my opinion, which worked excellently for it. I loved it.
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wirrrn has it right. I thought this was a terrific premise. Love this movie!

He didn't find the hidden townhouse- he built it- he was Jack Lusman, the owner and architect of the building. The arcane symbols all over the place turned the building into a giant spell that kept him immortal- the renovations to the hotel were screwing the spell up, hence his deformity and his pain, and his need to kill people in order to a] rebuild his strength and b] try and stop the renovations

yeah he kept popping up just around nell and was all cryptic so i thought he was a ghost but then he died. hum.

I liked the fact that everything wasn't spelled out. That's what made "Donnie Darko" so intriguing; what made the original "Black Christmas" so infuriatingly memorable. If everything were explained, then people would further be complaining that there was too much boring exposition.
It would've helped for them to have included the aforementioned deleted scene, though I figured early on that he was probably a ghost

Most often things are scarier when we don't know a lot about them. Knowledge gives us power, a lack of knowledge makes us feel more helpless and hence afraid.

It would have been better if it was just some killer, not that spell casting b.s. Besides, how can there be coffin babies when people get embalmed? Also, the fact that they did not take Nell away in the ambulance with her husband annoyed me beyond belief. Why would you run upstairs and start packing after being terrorized and injured (she fell and seriously could have sustained internal injuries, she needed medical care)? I payed for this piece of crap at Blockbuster.

Thankfully there isn't a sequel. They were gonna make one but obviously cos it was a flop they didn't.
I've seen this movie loads of times and still don't get it.
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The way I saw it, Coffin Baby didnt find his way in by chance, but was there from the get go - The guy who designed the building was using the magic symbols to keep him sealed inside, and the construction on the building broke the seal and allowed him to escape. This would explain why he backed away from the symbols at the end. For some reason, the designer didnt want Coffin Baby to die (perhaps it was his son, or whatever) and used the symbols to keep him (and everyone else) safe. That's not gospel, but my interperetation.

"so why did he wait for so many people to die? "
This doesnt answer your questions, but it might help in a deleted scene for the movie, it is revealed that the old man is dead. He's a ghost that haunts the hotel. So that explains why he didn't do anything about it, and it also explains why he knew so much about the killer.
Now, how this deformed killer found his way into the middle of mystical building, that much is beyond me. I think its the classic reason "just because"

Nope, I watched it second time round tonight and was still no clearer on who he was, why he was and why he did what he was doing.
beep if you ask me, nothin seemed to be tied up.
There may well be a sequal but i'm damned if i'll be bothered to watch it.

I watched it last night too on ITV4, and i thought alot of things didnt make sense, but then again i wasnt watching it properly because i was on the phone most the time.it's repeated again on friday night same channel at 20 past 11, im just gonna watch it properly then and hopefully it might clear a few things up.