Houses aren’t the only properties in need of a little facelift. Hotels often need their own dose of tender loving care.
Like any investment property, resorts come in all shapes and sizes … and some have major management issues.
When a hotel is poorly the managed the result isn’t pretty … it’s often downright ugly. But that means YOU have an opportunity to add value, improve cash flow, and build equity.
Listen in as we visit with two hospitality investors who find fun and profit as they renovate resort properties.
In this episode of The Real Estate Guys™ show, hear from:
- Your resourceful host, Robert Helms
- His relaxed co-host, Russell Gray
- Accountable Equity’s professional resort investors, Josh and Melanie McCallen
Broadcasting since 1997 with over 300 episodes on iTunes!
When you give us a positive review on iTunes you help us continue to bring you high caliber guests and attract new listeners. It’s easy and takes just a minute! (Don’t know how? Follow these instructions).
Resort rehab done right
Resort properties offer some of the highest returns on investment of any asset class. They are an attractive real estate deal … but one that can easily be mismanaged.
When our guests, Josh and Melanie McCallen, see an ugly, non-performing resort property, they don’t see a failure … they see an opportunity.
Josh and Melanie’s team at Accountable Equity renovates and revitalizes resorts. By creating higher-quality resorts, they create more income … and more value.
But to correctly rehab a resort, you need a deep understanding of AND passion for the hospitality industry.
Most of us don’t have that. So, partner with someone who does.
The beauty of Josh and Melanie’s business model is syndication. You can be a passive partner with an active investment and see phenomenal returns.
Resort rehab done right means everyone wins … investors, staff, and guests.
Finding a home in hospitality
When they graduated from college, Josh begged Melanie to buy a duplex as an investment. They’d live in one home and rent out the other.
“I had to let go of the three-bedroom, white picket fence idea in my mind, but right away I knew what I got into,” Melanie says.
Over their real estate career, Josh and Melanie found themselves taking part in resort experiences across the globe and partnering with developers of specialty properties.
Then the recession of ’08 happened. Suddenly, Josh and Melanie were sitting on a beat-up 1970s beachfront hotel.
It was too risky to tear it down and start new development … so they decided to rehab the property instead.
“That first project was 18 months of getting our teeth kicked in, but we learned that hospitality isn’t just about the building,” Josh says. “It’s a living, breathing guest experience.”
The couple realized that they LOVED interacting with guests and putting smiles on their faces. They fell in love with hospitality … and decided to make it their life’s mission.
The benefits of a resort investment
A rehabbed resort is one real estate investment where the person paying the rent doesn’t begrudge writing a check at all.
When you’re on vacation, you want to splurge. You want to enjoy yourself and your experience … and you’ll gladly pay more to do so.
Hospitality professionals know that the happier you make guests, the more enjoyable the visit will be.
As an investor, YOU know that happy guests mean high returns.
Resorts also offer a unique opportunity to increase revenue.
There are two ways to make more money … find more people to sell the same thing to or find more things to sell to the same people.
The hospitality business allows investors to do both with relative ease.
And when you invest in a resort property, you have the added benefit of being able to enjoy your own investment … by taking a vacation.
The success of a syndicated approach
Josh and Melanie started Accountable Equity as a syndicated approach to resort rehab.
“The first thing you must do when thinking about buying one of these properties is find great investor partners,” Josh says.
Each month, Josh and Melanie host an investor summit. They bring together current investors, new investors, and prospects to tour the property and get a firsthand look at hospitality in action.
These summits are an invaluable time to help investors see how revenue from different parts of the resort build off each other.
When a party arrives for a wedding, they’ll book rooms. Since they’re staying on site, they might want to play a round of golf or spend time at the spa. They’ll need to eat, so they’ll hit up the restaurant and tasting room.
“We call it a cascade of revenue,” Josh says.
Syndication is a powerful approach to every aspect of hospitality. Beyond investment, the syndication spirit encourages team members to seek out experts in every field.
“In our current project, we’re bringing in a top winemaker for the winery. We found a golf executive on his 111th course to help with ours. It’s all syndication,” Josh says.
Teaming up for transformation
Accountable Equity’s current project, Renault Winery Resort, shows just how powerful … and profitable … revitalizing resorts can be.
As the third federally registered winery in America, the property has been in the hospitality business for 155 years.
The former owner managed the resort for 40 years, but over time began to let standards deteriorate under stress.
“We found this amazing property that needed some TLC. But we were willing to take a fresh approach, look at it differently, consider its legacy, and see its next chapter,” Josh says.
The team also studied market drivers in hospitality to determine if the resort could evolve to meet current and future needs.
With a millennial movement toward authentic experiences, a historic property … complete with a Prohibition-era speakeasy … spells out attraction.
And with nearly half of weddings taking place at a destination over the course of three days, a resort that caters to making happy couples’ special day extra special can generate big business.
It’s no small undertaking. Managing and rehabbing 120,000 square feet of buildings and 242 acres of vineyards, a golf course, and a spa requires a winning team.
“Our staff and our investors are our family. We all depend on each other, and honestly, it’s an honor to be a part of,” Melanie says.
Take part in a unique real estate niche with resort rehab investment. Learn tips and valuable lessons for getting started in a special report from Accountable Equity, 10 Steps to Resort Rehab Riches.
No matter your market of interest or area of expertise, consider what you can learn from the rehab-and-syndicate model of luxury hospitality investing.
What value can you add to your properties … and how can you leverage others’ expertise to increase YOUR bottom line?
More From The Real Estate Guys™…
- Sign up for The Real Estate Guys™ Free Newsletter
- Check out all the great free info in our Special Reports library.
- Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
- Stay connected with The Real Estate Guys™ on Facebook, and our Feedback page.
The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.