Zacona Eco-Resort Investment in the Philippines

[Jeffrey Clarke]

Investment Info:

Small multi-family (2-4 units) commercial investment investment.

Bought in 2015 - Zacona is an Eco-Resort with adjacent land for development and expansion. We rebranded, created website, listed on booking sites and have been profitable every year. Our plans are to expand the brand throughout the Philippines.

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

I have been selling condotels in the Philippines for the last 16 years and felt it was time to start building my own brand, especially since it has been upgraded to investment status and is an emerging market.

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

I negotiated for over a year, visited it twice and finally made a deal with the seller that lives in CA.

How did you finance this deal?

We did owner financing and had a MOA drawn up.

How did you add value to the deal?

The first thing we did was renovate the rooms with Western style amenities, added a new gate and enclosed the property with a new wall. We also created a brand and internet presence.

What was the outcome?

We increased the bookings and event revenue tremendously and have had a positive NOI every year and continue to grow each year. We have plans to add more rooms and am looking for new Equity Investors.

Lessons learned? Challenges?

Yes, many lessons learned dealing with permitting and having reserves to deal with issues - such as we found termite damage in one building and had to deal with that, plus some water issues that we ended up digging our own well and bypassing municipal water supply which was very costly, especially with two pools.

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

We have developed a great team of local lawyers and are very active with community leadership.