Osceola Mill, an 1849 Water Mill Conversion

[Chase Hoover]

Investment Info:

Other commercial investment investment.

Contributors:
William Harvey

Osceola Mill is a historic inn with 4 guestrooms (soon to be 6) plus a detached cottage and restaurant at the base of the Blue Ridge Mountains. The property operated as a water mill in the Shenandoah Valley from 1849 to 1969. It was then converted into a residential house and soon after an inn. The inn has been hosting guests from all over the world for over 50 years. Osceola Mill is the perfect place for a romantic getaway in the beautiful Shenandoah Valley!

https://www.osceolamill.com/

What made you interested in investing in this type of deal?

We love unique properties in well-located areas, and this certainly fit the bill! It was a bit outdated but had amazing bones with exposed 1800's wood in every room. The location right on a main entrance road to the Blue Ridge Parkway is perfect for attracting out-of-state travelers.

How did you find this deal and how did you negotiate it?

After being on the market for a few months, the owners needed it sold asap as they were moving out of state. Knowing that we invest in these types of deals, they approached me with a reverse offer that we couldn't refuse and closed on it two weeks later.

How did you finance this deal?

Closed with a HML, we plan to refinance into a commercial loan after the remodel is complete.

How did you add value to the deal?

In the rooms and cabin: remodel all bathrooms, interior paint, new furniture, some new flooring. The restaurant we are leasing to an operator to launch a beer & wine garden in spring 2023, attracting a younger client base.

What was the outcome?

To capture as much fall season revenue as possible, we re-launched the property as-is upon closing. This winter, we'll close down for 6-8 weeks to remodel before reopening with a fresh look.

Lessons learned? Challenges?

Of course, it's turning into a bit more of a project than we were hoping (don't they all?). But it's an 1849 water mill, so what do you expect! We're restoring the actual water wheel itself, a 25' rickety beast that is kicking our butt!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Real Estate: Hoover & Co Real Estate
Capital: Ash Valley Development
Management: Be Still Getaways