MB 246: An Others-Focused Approach to Resort Value-Adds – With Josh McCallen
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No question, the hospitality industry is among the hardest hit by COVID-19. And yet, Josh McCallen is thriving. The distressed Renault Winery Resort he bought in December 2018 is sold out for 2021, and revenues are up 200% from last year. So, why is Josh doing well while others are struggling? Are there opportunities for investors in the hospitality space right now? And what can we multifamily syndicators learn from Josh’s others-focused approach to business?
Josh is the hospitality investment expert behind Accountable Equity, a firm specializing in resort value-add and turnaround projects, and VIVÂMEE Hospitality, the management company that operates those assets. In the past two decades, Josh has led over $100M in luxury residential and hospitality construction projects, growing the revenue of the resorts he manages by 10X in less than six years and increasing the appraised value of those properties by 70%.
On this episode of Apartment Building Investing, Josh joins cohost Garrett Lynch and I to share his journey as an entrepreneur and discuss how helping flippers during the boom evolved into the work he does now. He explains how his company’s focus on resorts (not hotels) has helped them thrive despite the pandemic, describing how his team’s expertise in sales drives the kind of distressed assets they buy. Listen in for insight on the opportunities available to investors in the hospitality space right now and learn how a service-based, ministry model helps Josh serve both his guests and investors well.
Key Takeaways
How Josh got his start as an entrepreneur
- Sold cotton candy to classmates in grade school
- Paper boy at 12 (collect pay from customers)
When Josh got into real estate
- Bought duplex with wife in late 1990’s
- Started helping flippers in 2006
What Josh does in real estate today
- Runs hospitality development company
- Acquire distressed resorts for rehab + repositioning
What differentiates VIVÂMEE as a management company
- Start with core values (dignity of every person)
- Loyalty and recurring business model
Why Josh is doing well despite the pandemic
- Focus on resorts (multiple revenue streams)
- Sell experience, i.e.: wedding at winery
- Earn revenue now for 2021 and 2022 reservations
- Room revenue = trailing indicator
What Josh looks for in a property
- High volume of inbound calls for weddings
- Older/tired owner losing money, just breaking even
What makes Josh a good operator
- Experience of taking over for management collapse
- Treat hospitality as ministry, make guests feel loved
How Josh’s others-focused model extends to his investors
- Treat investors as guests
- Apply hospitality to fundraising
How Josh structures a resort deal
- Charge asset management fee
- Zero split until investors fully repaid + preferences
- 50/50 split moving forward
Connect with Josh McCallen
Resources
Join the Nighthawk Equity Investor Club
Learn More About Michael’s Mentoring Program
Rich Dad Poor Dad by Robert T. Kiyosaki
Apartment Investor Network Facebook Group
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