Investment Info:
Other commercial investment investment.
Purchase price: $1,200,000
Cash invested: $1,500,000
Purchased 12 bedroom, 12 bathroom boutique hotel, steps from the Sea of Cortez and beach in San Jose Del Cabo., Mexico. We converted a old restaurant on the property to a coworking lounge, redid the pool and built out the roof to a entertainment center with fire pits, lounges, bubble chairs, barbeque, large screen TV, music, yoga mats and amazing views of the ocean and city lights.
It is designed for coworking/coliving for business professionals and entrepreneurs who want to...
Live where they work. Work where they live. Anywhere in the world.
Purchasing a property in Mexico was a long, yet valuable experience because of what you learn in the process.
Now we are acquiring more in Mexico because of the value you can purchase for and the income that can be generated. As well as the appreciation, created as a result of the availability and demand.
We're happy to share.
What made you interested in investing in this type of deal?
It was a distress sale, so the price was right. We were looking for something in San Jose Del Cabo, because it is a popular destination for digital nomads and remote workers. We were able to create a great coworking lounge as well as build out a great entertaining space on the rooftop for stargazing, yoga, movie nights, dancing, great food, drinks and ocean and city views.
It was in decent condition, just a lot of deferred maintenance, Has appreciated. Only need 35% occupancy to cash flow.
How did you find this deal and how did you negotiate it?
We were in Cabo looking at other properties and our realtor found it. The negotiations were tough because after we opened escrow we realized it had five different owners with five different titles. The loans were varied and some were able to close sooner than others and they wanted to close before the others but we held out because we needed to close all of them at the same time to avoid any last minute standoffs or complications. We held strong to our price and terms.
How did you finance this deal?
We created a syndication and raised 1.500,000. $1,200,000 purchase price and the balance for closing costs, repairs and reserves.
There are ways to obtain financing in Mexico, but most sellers are expecting cash deals.
How did you add value to the deal?
By building out the rooftop. We added two firepits, multiple lounge areas, barbeque and eating area, stargazing chairs, yoga mats, games, large screen TV for movie nights, music and more. Rooftop has amazing views of the ocean and city lights.
Also converted what was once a restaurant/kitchen to a coworking lounge with views of the ocean and pool/patio area.
Redid kitchens, painted, added swing, hammocks and created social areas. Added amenities for coworking/coliving for digital nomads.
What was the outcome?
Great!
The property is gated so many rent out all 12 bedrooms and bathrooms for parties, retreats, anniversaries, team meetings and special celebrations.
It's private and perfect for those who want privacy when they need it and company when they want it.
It has appreciated and is now worth at least 3 million and we are looking for funding to refinance and share the profits with our investors.
Lessons learned? Challenges?
Check on ownership status before you get into escrow.
Get multiple inspections to be able to really determine the extent of repairs.
Try to align yourself with the best contractors, had good referrals, but somehow nobody stood behind their warranties.
Have a good lawyer and local accounting firm.
Talk to locals to see how things are done and what's happening around you.
Have patience!
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
Yes, our local agent was
Olga Narvaez
Ronival Luxury Homes
52 477 350 6941
