From First Responder to Ground-Up Developer: An Inspiring Journey | Andrew Owlett E19

Ever dreamt of creating your luxury resort from scratch? In this episode, we’re diving deep into the world of ground-up hospitality development with Andrew Owlett, a visionary building a boutique wellness resort in Virginia— with plans to expand into three other states!

Here’s what you’ll learn:

🔥 The freedom and challenges of developing from scratch — Why Andrew chose to build rather than buy.

🔑 Critical first steps — From forming the right team to finding the perfect piece of land.

📍 Navigating zoning and special permitting — The do’s and don’ts of turning raw land into a thriving resort.

💡 Game-changing strategies — Including how Andrew funds his projects by acquiring small businesses to generate cash flow.

Andrew also gets real and personal, sharing how his experience as a first responder inspired him to create a wellness-focused retreat.

If you’re curious about ground-up development, and wellness resorts, or want to learn how to turn a vision into reality, this episode is a must-listen!

🔗 Connect with Andrew:

Instagram: @AndrewOwlett

👉 Don’t forget to subscribe and leave a review!

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Transcript

Michael Russell 0:00

Would you risk everything on a piece of land that might never get approved? That's exactly what today's guest, Andrew Alette, did. He's betting big on a ground-up wellness resort, starting from scratch, facing zoning nightmares, and navigating the brutal reality of development timelines. But here's the kicker. He's convinced it's worth every ounce of risk. Andrew breaks down the brutal truth about land acquisition, special permitting, and the relentless pursuit of a dream. You'll hear how he's funding this vision, the team he built to pull it off, and the emotional roller coaster of turning nothing into something extraordinary. This isn't just about building a resort. It's about betting on yourself when nobody else will. If you've ever dreamed of building your vision from the ground up, exactly the way you see it in your head, but felt paralyzed by the risk, this episode is for you. Let's dive in. Welcome to the Hotel Investor Playbook, your guide to building wealth and freedom through boutique hotel ownership, hosted by Mike and Nate. Get in the game, you're welcome to the Hotel Investor Playbook. We're Mike and Nate, founders of Malama Capital, and this podcast is documenting our journey to building a $400 million business, sharing our wins, losses, and lessons along the way so you can apply them to your own journey. On this episode, I would like to introduce Andrew Alette. Andrew is developing a ground-up boutique wellness resort starting in Virginia and intends to expand to three other states. I want to ask you right out of the gate when considering going the route of developing a hospitality asset, what are the advantages of developing a hospitality asset as opposed to purchasing a pre-existing one?

Andrew Owlett 2:02

The world is your oyster, quite literally. You can design anything that is in your head. Like you just have to have the right amount of capital, the right team. But like the coolest thing is that you are building something from nothing, absolutely nothing. You are picking up a plot of land and you are putting a structure on it, or multiple structures, multiple unique features, multiple different like touches and everything, and you're expanding that out to what your mind has envisioned it to be, and even more than that. And I think that's the coolest thing. Like it's almost like an artistic vibe. Like you have this vision in your head, you articulate it, you pull the team together, you share it, and then you start building it. So from my standpoint, like it's quite literally like my favorite way to go because like I'm not restricted by the imagination. I'm maybe restricted in other areas and we can talk about that, but the imagination is not my restriction, and I think that's the coolest piece.

Nathan st Cyr 2:58

I love that. So look, I this conversation comes up, you know, quite a bit. I think that when we look at hospitality, we call it the passionate asset class because there's a lot of different areas you can invest in real estate, but this one is unique in that, and then like, oh my gosh, I can combine my passion and um everything that that investing in real estate can can do for my life. Like, so I want to just go to the very beginning. What did you look for? And how did the acquisition of this first piece of land, where is it? And and how did that acquisition take place?

Andrew Owlett 3:31

So we're gonna get super real and personal because I think that's a core component of the journey. And it's so I'm very vocal about it now. I wasn't years ago. So it's taken quite a bit to become vocal. Being a former first responder, like I dealt with a lot of PTSD and like wellness challenges after I left firefighting and EMS. And um, two, three years ago, I was having a conversation with one of my friends, and I found out that you know it wasn't just me that had those challenges, it's actually a whole host of first responders that have those challenges. And I said, I want to do something to help in the wellness space. I don't know what that is, I don't know how it's gonna turn out, but I know I want to do something to give back to that community in some way, because that community was such an integral part of me. Like, it's the least I could do to give back to them. So over the last two years, or a little over two years ago, I had that conversation, and then I just started thinking about like, okay, what could that be? And I'm like, well, I love to travel. I love wellness now. Um, as I kind of learn more about it, I love technology, I love building things and like structures, I love real estate. So why don't I just do something in the hospitality space in the wellness space? It just kind of came together after just kind of thinking. Um, and that vision matured over time. I knew that I wanted um a ground up hospitality project to be close to me because I wanted to be able to visit it. I wanted to be able to be hands-on, at least with the first one, um, like very much so. So I could learn the systems, the processes, all the ins and outs of hospitality development versus other real estate development. So I live in Maryland, Northern Virginia has some pretty nice pieces of property that border national forests. It's also close proximity to Washington, D.C., which is a major hotspot for tourists. And then I said, I drew a circle on a map. I said, I want land within this circle. Now, little did I know, finding land just takes a long time. Just, it just doesn't pop up. Well, it does just pop up one day, but you have to, you have to find like not only a plot of land that looks good and checks all the boxes, and we can dive into that in a little bit, but you have to find land that feels good too. You have to find a community that feels good. Like those are so incredibly important, especially when you're going through a development project or really any real estate project, because you're making an impact on that community, not just today, but for tomorrow. And you want to leave that impact very positively. Um, you want to find or you want to leave the community better than when you found it. So it took me about two years to find land. And we found land in Q3 calendar year, quarter three of last year, went through site design planning, um, kind of iterated on the vision and everything that matured over time. Um, and I skipped over a bunch of stuff, you know, from that zero to two year mark, but we can dive into that.

Nathan st Cyr 6:33

Yeah, well, I want to dig, I do, I want to dig in just a little bit. So, from what you just said, essentially you had your vision, you had some parameters, right? You're like, okay, here are my parameters. Proximity matters in a couple of different ways. Number one, it's my first project, so I want to be able to, I want it to be in an area in which is in some ways close to where I am, so I can have access. Then it sounds like you looked at high demand tourism and you looked at there has to be proximity within this circle that you drew that people could get there within a certain maybe drive distance or what have you from a major metro area? And then you looked at the different communities that existed within that and creating a specific feel. What about when you were doing this land search? What about zoning? Did you look for something that had a specific zoning, or were you just open to, I want to look at the land? And then we can look at potentially a rezone opportunity after we we secure it. What was your what was your strategy there in the acquisition process?

Andrew Owlett 7:41

Oh man, so many things to unpack. Love that. So, number one, before even getting into the acquisition process, like I had to form my team, right? Like I had to find the right broker realtor, the right financing partner, the right um development partner, the right architect designer. And like that was right after I had this vision that I wanted to do that, I formed my team immediately after that before even looking for land. I didn't want to go into a blind and learned through trials and tribulations about the importance of theme. And I knew that was the fundamental piece that would allow me to not only build this, but also scale. So I did that for about six to eight months. So it took, it took a little bit of time to research, to interview folks. Like they didn't know it was an interview, but it was, and just like ask like very specific questions about like their hospitality development experience and like how they've helped commercial type of projects and everything, because I knew that the team I had before this was not going to be the team I needed. So I needed to adjust my team.

Nathan st Cyr 8:43

Um, but when I was looking at LAN can we can we can you actually that's by the that's freaking nugget, by the way. Absolute nugget. So when when you were putting this team together, can you just walk through the different okay? This is who I needed. I had my checklist of people that I needed to know that I was gonna be able to execute this, who were like what were the categories that they fell with it.

Andrew Owlett 9:06

Architect designer was the first one that had a really, really good architect that understood how to look into something, how to look in permit, how to navigate the bureaucracy that's associated with that, no matter where you are in the world. I knew that that was like the first bucket of a team that I needed. I had an idea of who that would be kind of going into it, but I wanted to prove myself wrong. And I wanted to say, you know what, Andrew, you you are biased, like this isn't the right team member. And I actually came out with a different team member. I did challenge myself to kind of to kind of get into that and like really, really focus on like what's the brand I'm trying to build? I mean, then build that team around it and make sure that that team had vision and everything by asking like very like specific questions about their design style, how they approach projects. Um, do we jive? Are we are we having you know a really good conversation or is it like really stressful? I don't want that with a team member. I don't want stress. So that that was kind of like the the biggest piece. And once I found that architect designer, I knew that the next piece was just finding a really good broker, finding a really good local construction company, kind of like going through that process and like going to the construction company route was putting the cart before the horse at this stage. Like it was one of my lessons learned early on is like, oh man, I wanted to form this entire team. But Andrew, just focus into really two core areas. Number one, find your architect designer, and number two, find a really good real estate broker that understands commercial transactions. And like those team members right out of the gate early is all I needed at that time. I didn't need to go down this path of finding like the perfect marketing and branding person or the perfect PR person. I didn't need to like go down the path at that time with uh like finding you know the perfect interior designer or whatever. But at that moment in the beginning, like architect, designer, broker, like those are the three or two individuals or companies that you need.

Michael Russell 11:08

Hey there. This is Mike and Nate jumping in with a quick favor to ask. If you're enjoying this show, would you just take a moment and go ahead and leave us a five-star review? Your reviews really help us grow our listener base, which in turn allows us to bring on even more high-qualified guests who share their actionable insights and strategies to help you succeed in your hospitality journey. So if you've gotten value from this episode or any of our past episodes, we truly appreciate your support. Tap those five stars, follow the show, and share it with someone you know who's looking to up their game in hospitality or investing. Thanks so much. And now back to the show.

Nathan st Cyr 11:43

Yeah. I think that that's when we're getting started with this process. Like I I love identifying, okay, well, this is who I thought my team I needed to have. But then all of a sudden you start wasting time on, well, is the contract or what if I'm not even in that region? Like, what if it ends up where the piece of land that I purchase isn't even there? Like what, like, what if they're not even available once we secure this because they've taken on a new big project? So lining out what is really necessary. And the part that I'm, you know, I really picked up on is you found an architect, it sounds like, as a team, as a team member, that you felt extremely confident had the information and the knowledge to guide you with the the zoning and the land use. So that could be a separate entity, or it could be somebody that's an architect that specializes and has it as a specialty. So, how did you know that that that that member was going to be able to guide you with the land use side?

Andrew Owlett 12:41

Yeah. And actually, you just sparked in my head, Nathan, like a couple other things really quick about this entire process. Like you look back on things and you're like, oh my gosh, damn it. Like I should have done that. I shouldn't have been stubborn in this area. And just having this conversation, the part that I was stubborn two years ago about, or a little over two years ago about, was I needed a business partner. Like, if you read all of you know those entrepreneurial and business books out there, like startups fail when they're a single most times when they're a single person startup. And I'm like, I'm a startup, I'm by myself, I can't possibly do it alone. And it took me until after acquiring the land and after going through site design planning. So about seven months ago, like I'm going through this entire process. It wasn't until seven months ago that I found my business partner. And I wish I would have gone into this a lot earlier with the business partner because I think the timeline to execute would have been condensed. Like just, I mean, the land piece was still there, but it just would have been it, things would have exponentially gone. By the way, I forget the question that you just asked.

Nathan st Cyr 13:50

Yeah, no worries. Well, look, we were just talking about what I had asked was, you know, you the architect that you found actually had expertise with, and they have to, obviously, but you felt comfortable enough that they had enough expertise in zoning and land use that they covered both of those kind of roles.

Andrew Owlett 14:08

Exactly. So, like when I was looking for an architect designer, and my preference was to have an architect designer under one roof. Like I didn't want to have in taking a step back, the reason for that is because in my head, like those two things are intertwined together and like very, very closely. And it just is a natural harmony of like type uh two different disciplines. So I was looking for that. Um, number two, I wanted somebody with a proven track record in not only hospitality, but hospitality in northern Virginia, where I was starting the launch or where I'm starting the launch. I wanted somebody that was industry recognized as being like the best or one of the best in the space. I wanted somebody that wasn't like, even though they had a portfolio in northern Virginia, they also had a portfolio outside of that because to me that showed that they understand like not only zoning and permitting in one area, but they understand multiple different states or multiple different counties, and that was important to me.

Nathan st Cyr 15:08

Love it. So now that you've done that, tell us about the land. So when did the land come up? Yeah, so you got the team together, you've identified who you want. Now you're certain searching. Boom, what happened with the land?

Andrew Owlett 15:20

This 31 acres is actually within the circle that I drew um on the map, and um, it's within a community that's uh very symbolic to like the project and everything. And I took a look at it and I was like, okay, this is significantly more difficult to develop on than the first plot of land because there's a lot of rock, there's steep inclines, and I'm like, but at the top of those steep inclines, I have the most incredible views of the entire valley and everything. It is at the tallest point, and not to mention in the backyard of the property, quite literally, like the end property line is national forest. So I'm like, you can't beat that. Like nobody's building behind the property. We are the second to last lot before you enter a national park. I'm like, okay, like those challenges of building on like extreme grade and everything that I knew about. I'm like, you know what? This is the land. It's in the community that we want, it's in the proximity we want. It's even though it's zone residential, we know we can get over the hump because my builder has experience in the county that we're building in and understands the regulations. So that was another big check mark. And we just started going down the path of site design planning, and now we're into permitting. And I just skipped over another bunch of stuff so that we can dive.

Michael Russell 16:40

Yeah, the actual acquisition to me seems a little scary. So you identify the land, you go, okay, it's got some challenges, it's not zoned correctly at the moment, but hey, we're willing to take that risk on. We'll go ahead and go through the process of converting it. To me, I go all my gallon terrifying, bro. Terrifying. Like that's like the whole deal. Like, do you do you tie up the property and you put some money down that goes hard after a certain amount of point and say, look, this is contingent upon us getting zoning? How does it work where you can feel secure that you're gonna get the zoning?

Andrew Owlett 17:10

Yeah, so um, a couple things. So, yeah, that the acquisition piece, you know, after you just said that's scary, like, holy cow, you know, I never thought it was that way, to be honest. I uh and I think a big piece of that is like I always ran toward fire in my life. Like, I'm not scared of things, like I'm just not like um I I'm like there's always a way to get around something until there's not, but we're not gonna go down. Um so in this instance, uh there there were a couple other factors that we are weighing, and uh we have a couple different exit strategies as well, in case, you know, by an act of God or whatever, like you know, things just don't go through. Um, but we're not thinking that way. We know it's gonna go through. We're very confident that we're gonna keep that momentum, but but why?

Nathan st Cyr 17:54

So like like you gotta tell us, like, you buy this piece of land that's re I think you said it was zoned residential.

Andrew Owlett 17:59

Yep.

Nathan st Cyr 18:00

Okay, and you're gonna go and put a freaking hospitality resort on it, correct? This is fundamental. Like, how what gave you the confidence that like I get you run towards fire, like all of that, but just I'm not scared of stuff. Well, okay, but it's currently zoned with a different usage. What gave you the confidence that you could rezone this property for what your end use was, which is a commercial wellness resort retreat?

Andrew Owlett 18:34

When we were going through the due diligence process, we went through site design planning in parallel. It was a contingency that we um that we could bail at any point if our due diligence process just panned out that this was impossible. So what we ended up doing is we did a full zoning analysis, we met with the county, we introduced the concept to the neighbors. Um we were given the confidence, like through those conversations, um that there would be very little um bureaucracy, like through the entire process. Not only that, the neighbors um were floated the idea of a buyout, which was very attractive to them, and a very big buyout to be like like 3x what their property is worth, type of buyout. So when you're when you're floated with that, like not only does it help us and we can put in some boundaries on how far we can develop into the land to protect other neighbors, we we really negotiated like, hey, like at any point in time, like if the zoning analysis, if the politics are too much, if the neighbors are too much, like we're gonna completely like just hightail it out of here. So we we got the confidence from all of that that and from from other development projects that are in the same. County and from lessons learned from the county politicians and everything that we had to work with that if we take you know, here's prescriptive steps, we take those steps, you'll be good to go. Like we give you the word. Um, and that was that was good enough for us.

Michael Russell 20:17

How long was the due diligence period to make that determination?

Andrew Owlett 20:20

It was about three and a half months. So it was it was longer than you know, I think I quote unquote traditional due diligence periods, but that was because we had a lot more intricacy in like making sure we weren't making an investment, obviously, like that that would just completely flop. Now, during that time, we also came up with like contingency plans. Like, let's say we can't get this rezoned. What's the other pathway? And the other pathway is getting special permitting, which still means that's a residential plot of land, but you have special permitting to develop commercially on it. So, you know, at the end of the day, like there's pros and cons to that too that we learned, but it's not a bad plan B. Plan C is like by right, we have certain rights of how much we can build in a residential like capacity in the county we're in. And even though it's not as many like keys as we want, we could still build up to 10 like separate keys and have like a micro resort, like as a plan C. So, like when we were going through this entire process, we were like, okay, let's think worst case scenario, we're shut down across the board. Like, what do our numbers look like? Like, what can we do to you know avoid that? And we came up with this whole list of like different situations and everything, the scenario plan. 10 keys for us wasn't enough, but if we had to do it, like we would do it. We were aiming for the 30 to 50 mark. Um, so I mean, 10 pretty substantial difference. Um uh the numbers would barely work um at that. Um, it wouldn't be the the best type of uh investment and as good as it's looking out to be today, but it was something that we were like, you know what, we'll we'll just we'll we'll try. We have our contingency plan, we have our options, and we're gonna do that.

Nathan st Cyr 22:13

Okay, I love that. So look, that's what I mean. I think in every one of our investments that we've made together in our four commercial properties, we always go to all right, worst case scenario. And then we if we can live with the worst case scenario, like if we can live with it, we might not like it, but if we can live with it, and sometimes that's meant, hey, maybe we lose a couple hundred grand. But if we can live with that, the upside risk is like, all right, now that changes for us when we're bringing in investor capital. So when we're dealing with our own money, then we're willing to be we're much more risk adverse. But when we're dealing with investor capital, no way. We're minimizing every corner of risk that we could take. So was this project, if it would go to the 10 key, would that have still entailed you bringing in investor capital?

Andrew Owlett 23:05

No, a 10 key it would be self-funded. Uh, when we exceed that is when we need that investor capital and that what we're closing up now over the next like 45 days, we're pretty confident by just the conversations and everything and how they materialized with one investor group that we're we're gonna be able to close that up. But yeah, with with uh my own personal capital, that that's kind of like I was the same way, Nathan. Like if it's mine, you know, okay, that's one thing. Like we'll we'll recoup, we'll figure it out. But when you start dealing with other people's money, just gotta respect that. And you gotta be a little bit more cautious for sure.

Nathan st Cyr 23:45

Yeah, because this is the big I mean, this is the big concern in development, right, for us, is this concept of time and risk, right? So you've got these two factors that I'm trying to navigate through with people that have done this and like what their mental how they're attacking it. And so it it sounds like you acquired the property, you had um 120 days of due diligence to where you felt like through that process of going through the county, looking at similar situations, you developed your plan A, plan B, and plan C. You could live with the plan C, which was the worst case scenario, you felt comfortable moving through and going forward with the purchase of the land. Does that summarize it?

Andrew Owlett 24:34

Yes, sir. Yeah, and that summarizes it. And you know, honestly, I just want to address like the development cycle. And like we're we're talking about like all of the good stuff that's kind of like led us here, but on the bad side, like you just highlighted it, Nathan. Like, it's a long time from start to finish. Like, like you can you you can buy an existing asset that's already zoned and already operating and flip it in a quarter to a half of the time, you know. I mean, this is like getting into development, it just takes a long time, and there's a like you just don't know until you get into it, like how the neighbors are gonna feel, how the county's gonna feel. Like when you start talking to them about the vision and everything, like it could all look great on paper, but when you have the conversation in person with them, their body language is resistant, they don't want anything to do with it. They walk away having more questions than answers. Like, you gotta weigh all of that. And in our case, like like the vibes were really good. Like, it wasn't just me feeling good, it was my architect designer feeling good, and like they're they're in it for the same reason. They want the recognition, they want the money, and then they want to make the community a better place.

Michael Russell 25:42

So, like, like, yeah, it's um yeah, just a long lead time at the end of the day from start to so you secure the land, then you gotta build the property, and walk walk us through so from an investor's perspective, what can they expect from the time they invest until the time they get their money back? What's the exit strategy, number one, and then number two, how long is it gonna take for them to get their money?

Andrew Owlett 26:05

Yeah, so in our case, um it it's a little bit unique um because we're we're building our flagship brand in Northern Virginia, but we have uh Pennsylvania, Tennessee, Wyoming, and Oregon, like as our as our target markets for expansion. Um same brand, slightly different concept per one, um like just slightly to make them unique. Um and with that, like the investor strategy and like the the investor return on capital strategy is a little bit little bit different. Um, we have some pretty long hold contingencies uh because of the investor group we're working with. So like it's not a traditional, like you get in, you flip, and you refi within three to five years or 10 years or whatever your terms are. You you provide the capital back to the investor and then you own the asset kind of outright, or however you structure it. I mean, structures like there's a million different ways, right? As we know. And with this, it's like significantly longer. The the investor group we're we're working with right now, they want to hold for 10 plus years. Like they they don't want to set, they don't want it to be bought out, they don't want it to be sold, they don't want to be at their full return on capital until after 10 years for whatever reason. Like we that that's that's their decision and everything, but it's highly attractive to us because, like, I mean, obviously, the longer the asset continues to operate, the more appreciation and the more return on money for for everybody. And so there's pros and cons to both, but for for us, like the pitch is hey, like you're used to development projects, you understand what they're like, investor group. So you know that by the time we get the capital, the when it's developed, when it um the the operation is equalized, like it's gonna take uh three to five years total, like uh for stabilization and everything and build and stabilization. So they're aware of that because they invest in these types of projects. But if you have an investor group that's not familiar with development, probably never want to touch this because it's just taking too long.

Michael Russell 28:02

Like they want Yeah, or they're old, you know, if they're elderly, like Nathan and I had a conversation about this, and we were thinking about okay, who could be our ideal investor profile? And if you've got a long hold time, so the the challenge, the paradox is typically people that are older have the most money, but then they don't want their money tied up forever because they're like shit, like I'm 70. Like, you're gonna give me my money back when I'm some sometime in my mid 80s? Like, no, thank you, right? So it does limit you in that regard, but I do think you're on to something with this idea of developing multiple locations, because to your point, this cycle of from the time you acquire to get the the zoning and permits and all that in place, and then the development and then stabilization, that is a much longer cycle. And so if you've only got one of these and you're waiting from start to finish, that's that's too long. But if you get them in the pipeline and they're queued up and you got three, four, five, six of these, sure, the run-up is a little bit longer. But then once they start triggering, then you've got a cycle of payoff. Boom, boom, boom, boom. So if you got three or four in queue, I think that that's a it's a little bit easier to to swallow a concept for your for future growth than just doing one at a time every seven to ten years.

Andrew Owlett 29:15

Yeah, and that's and that's uh that was one of the biggest things that we we pushed along is hey, like, I mean, we're we're gonna get done with special permitting and rezoning in the next six months, but at that time, kind of in parallel, we want to have our next two locations picked out. We want to be do going through the due diligence phase if we can at those other two locations. So, how are we gonna do that? Tactically, we're gonna have a development company. We need one, and we need to hire the the right people that um can can help us speed that up. And those people are um a due diligence manager, um, a zoning and permitting manager, um a construction manager, like like we're gonna be making some pretty big investments um kind of on the back end to help but how do you pay for that?

Nathan st Cyr 30:05

How do you pay for that before you've even stabilized a property? Like, I don't understand that.

Andrew Owlett 30:11

What do you mean?

Nathan st Cyr 30:12

Well, how do you fund payroll? The payroll that you just talked about, this team, a due diligence, like professionals, right? Like, how do you fund that up front when you don't even have your first property stabilized and generating profit?

Andrew Owlett 30:28

Small business acquisition. We're if we're acquiring small businesses in the regions that we're we're in through using our own capital, we are going through the SBA lending process to acquire small businesses and lump them into our development co so we can condense down on the timeline of construction and we can we can stabilize a lot quicker.

Michael Russell 30:51

Wait, that's so I understand. Can I can I clarify? Because I'm like, wait a second here. So there's active income and then there's investment income. And what you're describing is you're looking to purchase small businesses that spit out active income and the cash flow from those active businesses, then you can reinvest into long-term wealth building in real estate. Is that what I understood?

Nathan st Cyr 31:13

No, I think what you're saying is I think what he's saying, Andrew, aren't you saying that you're gonna go buy an actual due diligence company that then on its own will be able to pay for itself because it is its own business? So you're gonna be using it for your business to help you develop, but really with SBA and putting 10% down and going and funding this business, okay. Well, we put 10% down, but the business on its own will generate cash flow and active income and all of that. But it's that you're actually buying these different verticals that you're gonna need. So you're gonna need due diligence company, you're gonna need all of those things. So you're you're you're searching out and finding and then buying these existing businesses that then have their own active and can pay for themselves.

Andrew Owlett 32:02

Yeah. So you summarized it perfectly, yeah. So that's what we're doing. And why are we doing that? Right? Like that, that, like, why are we adding this entire like other complexity to it? So I have a background in supply chain and logistics. I understand that when you're developing something, you need to have more control over the supply chain than like just relying on somebody else. So, you know, at the end of the day, like in order to be able to get these projects off the ground a lot quicker, we can't be relying on these one-off like type of assessments. We have to have that team backing us, and we have to have the the income to support those teams, to your point earlier. And in order to do that, we have to acquire small businesses. So we're going out in about 12 months, and we have our first acquisition closing in early May. Hey, Amy, congrats. It's been a journey, and that that is a whole nother learning curve. Like in parallel to, you know, hospitality development, it's also small business acquisition and learning, learning the ins and outs of how to analyze that type of structuring deal and everything. But we're doing it to, again, condense down on the timeline because I don't want to cut I don't want to be in a position in two years where we're just acquiring our second and third piece of LAM. I want to condense that down to the next six to 12 months. Like I want to condense that down and because again, what I've learned is that that that initial like time period and everything. And, you know, granted, I didn't have a business partner, right? Like that's the whole other type of piece to all of this, and now I do, but it still just takes such a long time. And I want to control our own destiny. I want to, I want to control the supply chain a little bit better. And to do that, this is the best way to go.

Michael Russell 33:45

Can we digress just for a second here and then we'll circle back to the main point? But you've referenced business partner now a couple times, and so I want to know okay, why is this so important to you? I mean, you've mentioned that efficiency, you get things done faster. Walk us through what is your role, what is your business partner's role? How do you guys work together?

Andrew Owlett 34:02

Yes, I'm the I'm I'm the CEO of the hospitality group that we put together. I'm the visionary behind it, I'm the team builder, and my business partner is strictly there from an investor relations perspective because being able to fund five of these, being able to build a development company and like do all of this, it's a lot of work and it takes a lot of capital. So that's that's a full-time job. And to be quite blunt, like I don't wanna be the capital raiser. And I'm told all the time, Andrew, you have to be like you're in, and you just naturally are by just telling the story and everything. And I'm like, okay, but like I want somebody else to do that, somebody that's like done it multiple times before, that understands investor relations. Like, that's part about being a good leader, right? Like delegating to people that can do it better and faster, and this individual can. Um, and she's extremely good at it, um, and extremely talented in many other areas, so and has a hospitality background too, which is just so key. So we're both coming at this from hey Andrew, you lead the you set the vision and strategy, you lead the teams to tactically execute, and then she comes in and marries up with that vision and then also brings that experience on the investor relations side.

Nathan st Cyr 35:17

Makes sense. Okay, so now where's it at? Where are you at with this specific? Because we just went like big picture, right? But the person that's out there that's like, okay, well, I I want to, yeah, I want to build my own resort. We we leapt off at buying this piece of land, and then you you bought the piece of land, you went through the due diligence, you're there, you've been through this design process. Now you're raising capital for the construction side. Where are you at with this thing? And what's the next step?

Andrew Owlett 35:45

Yeah, so we went through site design planning, which is a part of the due diligence process, but it also carries into like after you acquire the land, you do some initial site design planning just to have an idea of what you want to build, how much you want to build, where you need to stop. But you you got to get like so many layers deeper. So we're we're in the phase right now of special permitting, zoning, special studies, engineering studies, like as one piece, uh sewage and well studies. It's already perk tested because there's no city water. So like we knew like going into it, and it's perk tested for what we needed to be perk tested for, so that's good.

Nathan st Cyr 36:22

Okay, can I interrupt really quickly? Because you said in the beginning there was plan A, plan B, and plan C, right? And plan A was you get it rezoned. Plan B was special permitting, and plan C was you're only do 10 keys as a residential. And I just heard you say special permitting. Does that mean that you came up with challenges with plan A?

Andrew Owlett 36:45

We found out over the last couple of months that the path of least resistance would be special permitting. So we took a risk and we said, you know what, instead of rezoning, which requires multiple different like public sessions to defend significantly more than special permitting, um, let's go the special permitting route and let's just remove the zoning piece. Um, so we made that call after we got through the due diligence phase, and as we continued to dig in this stuff and continued to meet with people, the direction went to the plan B.

Nathan st Cyr 37:20

Okay. And when you say special permitting in this region in Virginia, what does the does now the county hold the rights where there's a certain amount of time where your special permit is good and then you have to reapply? And what are those time frames?

Andrew Owlett 37:35

Yeah, it's a conversation topic that folks folks actually ask quite a bit, like because you're you're time restricted. We have a two-year period to to bill once special permitting is approved. So we're about a third of the way through. Um, and the first third of the way through is the toughest. Like it's the toughest in so many regards, like transportation study. Like just the things you don't think of, like the things you don't necessarily know, like right off the bat, but like Virginia Department of Transportation requires like you have to be able to see cars in both directions a certain amount of distance. You have to have a certain like grade for vehicles coming onto the main road, and you have to be able to have enough stopping distance. Like there's just like different like so, like these are things that just like come up along the way um that you don't necessarily know until you start socializing the project with the right people.

Nathan st Cyr 38:36

But what I'm more concerned about is once if this is my development, what I'm more concerned about is once I get through this initial special permitting where okay, we've built it, we've done all our studies, we've got it moved forward, we're building, we built the thing, typically a special permit. Now the county still has control over the land usage rights. It doesn't, your rights have not been. If I I don't know the specifics of this special special permit, but does the county have the ability in any way to go back to the original use rights?

Michael Russell 39:10

Is it conditional use? We have that's the term they use out here, where for example, if the property burns down, you can't rebuild it because the conditional use, it's not zoned for that. And so if you were once a hotel, it burns down, and they say, well, now that the code requirements require additional parking, this, that, and the other, that would just make it non-conforming for that, then you're out of luck. Conditional use can be a bit risky. That is, you know, a very hypothetical situation, who knows? But uh another more concerning thing would be if the county just arbitrarily says after a period of time that conditional use expires. Do you have to worry about that?

Andrew Owlett 39:46

No. And we also asked the question on point of sale, right? Like this this transfer over to the future owner as well, because that's a big consideration before we started going down this path with this investor group in the long old times and everything. Like, I mean, even so with them, it was an important piece because I mean we sell the pl uh if we sell this entire beautiful property and everything and like they can't have it like in hospitality use, it's no good to them. It just that like why why are you spending so much money on this when it's worth like not even like 10% of that? Like at the end of the day. But um special permitting where we're doing the work not only transfers on point of sale, but once it's approved, it carries through the entire life of the property and everything. I'm not sure about the burning to the ground piece. Um, I'm pretty sure, and I'm saying pretty sure because I don't I'm pretty sure um the discussions we had um were that we could rebuild. That's something I have to do now. Now now you have me sweating a little bit like that.

Michael Russell 40:52

Well, hey, that's that's what we're here for, right? I mean you want to find this out now before you go later, but I I don't know. I mean, that's totally circumstantial, right? It could be for your it's not not not relevant.

Andrew Owlett 41:03

I don't know, man. I mean, there are wildfires, you know. We're we're in the wilderness, and I mean there those things are yeah, you just you just never know. And now now I know what I'm gonna do after the podcast recording. I know what I'm gonna put.

Michael Russell 41:18

I do this to Nathan all the time. He's like, dude, what the heck? Why because I I just always think about these, like you talk about worst case scenario, like okay, plan A, plan B, plan C. Like, I'm always the one going, Hey Nathan, we really gotta think about what the worst case scenario is. And he's like, dude, it's gonna be awesome. Like, forget about it, right? Let's go, let's go for the moon, man.

Andrew Owlett 41:37

I I love that though, because like well, I I love it and I don't at the same time. Take no offense. I'm like, oh no, crap. I'm pretty confident that we'll we're we're good at that in this area. We did that zoning analysis and everything, but still I'm gonna look into it to make sure because I'm not gonna be able to sleep tonight now.

Nathan st Cyr 41:56

So okay, cool. So now you're in the process of getting the the special permits, and at what point do you need to have your capital secured?

Andrew Owlett 42:06

Uh the next 30 to 45 days.

Nathan st Cyr 42:09

Okay. And at that point will your permits be completed?

Andrew Owlett 42:14

No, it's one of the risk factors that we outline to the investors. So how we're also kind of structuring it as in draws to protect the investor base, right? Uh especially with this type of project. So and we're not taking our entire allotment of funds that we're raising up front. That I mean, I would never do that if I were in their shoes. So it was an automatic, like, hey, we're gonna structure this in a way that you have protection as the investor, and that you know that the riskiest part right now is in the beginning. So yeah, that's how we kind of structured it in a draw format to allow us to continue going down this path and go through the zoning and permitting and everything.

Nathan st Cyr 42:54

Understood. Understood. And then once you get the permits, then what is the time frame on on your build?

Andrew Owlett 43:03

It's about 12 to 14 months. And how how we're kind of going about it is we again, we had to get pretty creative, and there's a lot of really good innovation in the modular space. Um, and there's there's a lot of uh ways to kind of like decrease that that production time. The biggest piece is going to be the grading, like I was kind of alluding to earlier, like there's some pretty steep grades. And then second to that, the other piece is bringing in the infrastructure, like the IT infrastructure, the water infrastructure, like drilling, electrical infrastructure, stuff like that. And we we do have some contingency plans on that front too. We we could go the eco route and be completely off-grid. The architect designer that we have, their their experience that they've done projects like that before. We just prefer to to have some grid connectivity. Um, it just makes things a little bit easier. And are you purchasing module uh modular project we're we're currently assessing um about a half dozen options? So we're not 100% on one vendor yet. Got it. We like them local, like to the first project or as local as they can be, but we also have to be realistic that like not everybody's gonna be in the DC, Maryland, Northern Virginia, like type of area and everything, and we have to kind of open it up. But Michael, what were you gonna say?

Michael Russell 44:33

I said I want to accelerate this a little bit and and I want to know what this finished product is gonna be like. I mean, what the heck is a wellness resort to start? What does that mean? And number two, like, what are you gonna offer that's gonna be killer? You mentioned views, and there's some grading issues that are gonna, you know, provide this ability to just look out in out the wilderness. I'll paint the picture, man. What are we looking forward to? I'm an investor and I'm like, okay, I'm investing in this passion project. There's some risk, but what's the reward? What's the carrot? What am I gonna own if I'm investing in this?

Andrew Owlett 45:02

Yeah, so um, I can't say exactly what the icon on the property is that confidential right now, but there's there's gonna be one massive icon on the property, and that icon is going to be overlooking um the entire valley and everything. And then outside of that, we're gonna have hot springs, indoor, outdoor pool, cold plunge, farm the table restaurant. We're gonna have a rock climbing wall, hiking trails, edible forests, uh like different like activities that are on the property that that are gonna allow people to not only reconnect with themselves, but reconnect with nature and just have like complete peace. So sound baths, meditation spaces, um, outdoor, indoor, outdoor gym, which is pretty cool, waterfall feature, like just a lot of like natural elements. And uh it's gonna be about 30 individual suites. Each individual suite will there'll be a variety of different characteristics, like like they'll pretty much all be around the same size, but they'll have like unique features to each, like probably about five different variations we're talking about. Some may have like a hot tub, some may have an in uh or an outdoor shower, some may have like a small workout space or yoga space, some may have like a sauna, like actually just dedicated to like their space. So like there'll be some different variations there too, but like the biggest thing, and it it's going to be technology enabled. I have a tech background, technology at the core will allow us to operate really lean. And what I mean by that is like one of the things that I some of the language I use is invisible technology. I want to know more about the guests than the guests knows about themselves. It's a big pipe dream, right? But I'm convinced that we can do it. From the moment somebody arrives at our property, we will know how stressed they are by how they look. Like just by using technology, we'll be able to know how stressed they are by how they act and their behavioral elements. So we're gonna be heavy tech enabled, and there's some some unique things that are going to that.

Michael Russell 47:20

Yeah, you got to connect with Ari Smith. I always had a conversation with him, and and he's I think he's right in your wheelhouse, man. This guy is uh developing technology that, like you just pointed out, will know what they want before they even know it. So you we can connect you guys offline, but you should look him up. He's he's developing something similar uh in in Vermont. And so I think you guys would be a good connection. And in fact, anyone that's looking to do what you're describing, which whether whether it's a wellness resort, experiential lodging, I think that there's a lot of value in really catering to that experience based on the nuances of what are they looking to get out of that from a wellness or health perspective, from a dietary perspective, but really connect with nature, just get away from the commodity style hotel that is just providing a place to stay. Um, I think that your niche of wellness is um, I think it's it's a really there's a lot of opportunity there. And in this last podcast we had with him, what he was describing, it really kind of blew me away was this idea that the the small timer has a very unique competitive advantage. Right now, all the buzz is about Marriott and Hyatt and Hilton gobbling up all these soft brands. But for someone can go can go out there and offer this unique wellness experience overlooking the wilderness, this is really exciting. So I'm interested in following along with your journey. I want to see how you develop this. What's the timeline for having this thing? I know you said 12 to 14 months once you get permitting, but from right now, in this moment, when can we expect this thing to be built December 2026? Cool. So look, the you can see the horizon is not too far off. There's light at the end of this long tunnel that you've been in. But I'm excited to watch you progress. I'm gonna continue to follow your journey on Instagram. If um, I think if our if our listeners wanted to connect with you or stay in touch with you, where can they get a hold of you?

Andrew Owlett 49:08

Uh hit me up on Instagram. That's definitely the best way. Andrew Alette, pretty, pretty easy first name and last name. And uh shoot me a message. Just uh let me know kind of where you are within your journey and where you want to head and any questions you have. I'm always accessible to help out.

Michael Russell 49:25

Yeah, well, I appreciate your service as a first responder. What you're doing now in terms of paying it forward and offering help for folks that are looking to get started in this world of development. There's a lot to learn. There's a lot of things that you are learning as you go. And anytime you can shortcut or hack the experience and not have to make the same mistakes, I think is worthwhile. So Andrew shared with us that he's willing to help and just to, like I said, pay it forward. So we appreciate you being on the show. This has been really inspiring, really educational. I look forward to seeing how this thing's how your project develops. So, Nathan, before we sign off, anything else? No, it's been awesome. All right. Thanks, Andrew. Thanks so much for being on the show. Listeners, as always, thank you so much for listening to this show. And uh, we'll catch you next week. Aloha, you know, I'm gonna go to the house.