To continue our little tour of the executive villa that we are convinced is perfect for conversion to a B&B or small hotel we will take a stroll through the inside of the villa. As you will see in the videos, this property was designed to be converted to a B&B and it is fully equipped just as it is. As we mentioned in Video 1, if we were tackling this project, we would add an exclusive open air restaurant under a thatched roof. The construction costs for that type of facility is very low, especially given the fact that much of the foundation and floor has already been laid to accommodate the current helicopter pad.
To duplicate this property in a Florida beach town, not on the beach but relatively nearby, the replacement cost would be at least $2,500,000. In California it would be even higher, at least $3,500,000. And on most Caribbean islands, take Cayman for example, you would be looking at over $4,500,000 for a comparable property. The reason this is such a unique opportunity is that it will sell for a small fraction of those values to someone with vision and a desire to own and operate a successful B&B.
We are sticklers for working the numbers on any of the business ventures we evaluate for our own purchase and we did work up a pretty detailed business plan and budget on this property when we were thinking about buying it. Frankly, if we were not already juggling so many other balls up in the air we would still be looking at taking this one ourselves. If you think this is a property that you might be interested in exploring please let me know on this form so that I can tell you more about what we envisioned for the property and share some of our ideas about how to make this a home run investment if you are willing to work smart.
Given the fact that we are convinced that we can negotiate a very favorable price on this large villa, far less than the reconstruction cost, we believe this property could offer a pretty darn good return on investment at a daily rental rate of only $60 to $65 per day. And that is just thinking of it as a B&B for tourists. There is a much higher return possible if the owner decided to cater to some of the many couples that are searching for an affordable tropical wedding site. You could come in drastically under the current price of the larger Cabrera villas that cater to the wedding crowd, and still make out like a bandit. The larger villas typically charge $20,000 to $30,000 per week (and up) to rent the villa to a wedding party. I doubt you could compete for those higher end weddings but there are plenty of couples that would be interested in a lower cost alternative. At the $65 per day rate that I mentioned above, that translates to about $5,000 per week for the villa, but for wedding party accommodations, a more realistic fee would be at least $10,000 per week.
In this Part 2 video we will tour the lower level interior which included 4 of the 9 guest bedrooms, the breakfast area, a social gathering area, and a fully equipped kitchen.
In Part 3 we will tour the upper level which contains 4 of the guest bedrooms, a bar, social gathering area and covered cigar porch.
In the future we will give you other examples of the types of properties that expats and investors are scooping up here in the Cabrera area. This villa just came off of a corporate rental that booked the whole villa up solid for over a year by foreign engineers that were working on some of the massive Playa Grande Golf Resort redevelopment project just a few miles away. Given the very aggressive pricing we believe we can negotiate on this property, it might not be around very long, but it should at least give you some idea about what higher end properties look like. In our opinion, this is the best higher-end opportunity on the market right now if someone wants to operate a B&B or small hotel on the North Coast of the Dominican Republic. In future articles we will highlight properties in all different price ranges.