How to Get Started in Resort Real Estate Development?
I would like to start a resort development on an island that hasn't been discovered as yet.
I only have enough money to get a downpayment for 5 acres but would like to get a bigger piece of land.
How do I go about getting money to buy the land and ultimately financing to develop the resort? I imagine it would be be about 1000 rooms with restaurants, golf course, tennis, water sports etc.
This is necessary because their are no activities outside the resort.
The first thing I would say to you is DON'T TRY To Do It - as you will end up a very sad and heartbroken person.
To develop a residential resort on the mainland is very difficult - to do it on an island with no infrastructure and limited finance is impossible UNLESS YOU HAVE A BOTTONLESS POCKET.
Please don't take the word impossible as a challenge. I have been in the real estate development business successfully for over 35 years and I would not do it.
Using the car analogy for a moment, a residential resort has "to many moving parts" and TO bring them all together is a challenge for a professional developer, because so many of the parts are looking for their own profit centre.
A resort requires ease of air access to the island for large aircraft that are easy flying distance froma large population base.
A resort requires a central hotel base that provides accommodation, eating facilities for varying styles of food and price points and many extra facilities such as pools, boating, beach activities, permanent apartment/house accommodation and many other things.
ALL of that has to be managed Professionally, so that the complete holiday experience is "exceptional."
Hotel/ Resort manager are very professional organizations and their names are at at the top of world hotel right now.
None of these companies will lease an hotel or resort which gives a good return to the owner.
All they will do is enter into a Management Agreement based on performance. Performance agreements only have a few sources of income; room rental, food and beverage and facilities to rent out such as boats etc.
So the success is entirely based on aircraft loads of people arriving daily at a competitive market price and those people spending up big on food and beverage.
Now holiday season is not every day of the 365 days of the year - so there is the challenge. How do you keep it full and earning.
Having said all that you have to be able to control the land while you create a resort scheme on paper, get it approved by the authority, ensure that you have the support of a hotel management company with income figures that a hard nosed financier will accept as being achievable and then convince that same hard nosed financier that your deal is better that the other 20 he is looking at.
Oh yes, when you get the money you have to be able to carry out all your undertakings in the mile high legal paperwork you will have to sign.
My friend; there are many other better ways to use your money that will not drive to mad.
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