Secrets of a Real-Estate
“How I built a profitable Roatan resort on a
by Frank Canale
Six years ago,
Frank Canale started Sundancer, one of the most-successful
small-scale real-estate developments on the island
of Roatan. Here’s how he did it:
For a number of years, I developed real estate in
Arkansas & Colorado; retirement & golf communities
mostly, but after my wife & I had children I knew
I wanted to bring them up in a more relaxed, more
family oriented place & my wife & I wanted
to try home schooling. We also wanted to go somewhere
warm & I was looking for a place where I could
make a living with a small real estate project.
With these things in mind we began our search for
a place to relocate. I wasn’t by any means ready
to retire, so not only was I looking for a place where
we could enjoy some peace & quiet, I was also
looking for a place where there was an opportunity
for me to do a real estate project. I just couldn’t
afford to retire and I didn’t want to either.
In 1994 we looked at Costa Rica. It’s a lovely
place and looked like a good place to live, but I
felt like I’d missed the investment opportunities.
This was before Costa Rica’s recent depression,
and properties back then were, I thought, still very
expensive. Next we looked at St. John, the U.S. Virgin
Islands. It was simply too developed and too expensive
for the small investor like me. If I had big bucks,
if I was looking to build and had the money for a
huge hotel complex, St. John might have made sense,
but the whole scale of it was beyond my reach.You
have to realize that I was operating with very little
cash, as far as real
estate developments go and I was a one-man operation.
I didn’t have other investors ready to bail
me out if I got into trouble.
Why I chose Roatan
Then I went to Roatan in the Bay Islands of Honduras,
and I knew right away that this was the place. The
moment we arrived I had a really good feeling about
it, and at the time, it had hardly been developed
at all. And for what I wanted to do, Roatan was perfect.
There were several other projects going up…but
none of them were even close to what I wanted to do.
There were plenty of people designing bigger, more
expensive places. These people were selling high end
homes, some costing as much as $200,000. I knew my
project would be different. What I had in mind was
something for the smaller investor.
On my second trip to Roatan I bought a lot with electricity
and water supplies. This is where I wanted to test
the building process on a small scale, before I started
on the actual places I would sell. This was in December
of 1994. I bought the land, started a local guy on
the framing of a house, returned to the United States
for a month or two, then went back to Roatan to do
most of the electrical work and plumbing myself. This
would ultimately be the place where my family would
live. While I was back on Roatan in March of 1995,
I found the property where I would ultimately build
my little resort…called Sundancer.
My most important lesson
One of the most important lessons I learned in this
project was this: Build your amenities first. For
us, this meant the pool…the dock…and the
landscaping. You do this because when people come
to look at your place they buy into the whole package.
If they can see the pool and other amenities in place
they know 1) that they will definitely be there and
2) what the place will look like when finished.What
I’ve realized is that people are as interested
in what their surroundings will look like as they
are with what their actual house will look like. The
actual building they buy matters less than you think.
And it makes sense if you think about it. When people
are here, they’re outside: diving, sitting on
the beach or by the pool, or hiking around the island.
If they were interested in simply a luxurious place
to stay, they’d go somewhere else in the first
place, like the Cayman Islands. The amount of time
they spend in their actual place is really very little.Another
thing I realized is that the people who buy in this
market are much more adventurous than they are ready
for retirement. The people who bought at Sundancer
wanted an escape…a getaway…or a vacation
spot. Very few people will actually buy a home in
this type of setting and spend all year here. For
one, there’s just not that much to do. After
a month or so of solitude, most people who are used
to having so many diversions are ready to go home
at least for a while, before they return.
So I bought the property in March of 1995, got started
on my family’s house, then went back to the
States and waited for my kids to finish school. In
May of that year, we moved the whole family—along
with all of our stuff—to Roatan. We leased our
home, packed up our belongings, and left Arkansas.
One important note: We didn’t take any furniture,
because we knew we could get everything on Roatan
for less than it would cost to ship. And the quality
of wood on Roatan is better than most of the things
we already owned. The local mahogany is excellent.
Everything else, including cars, three boats, books,
kitchen supplies, and lots of personal belongings,
went with us.In June of 1995 I got my first building
permit. I brought many of my building tools with me,
but I got all of my materials locally. As far as our
design and planning, we never had anything formal.
For example, we found an area that looked like a good
place for the pool, stepped off 17 feet in one direction
and 35 feet in the other, and had our guys dig a hole.
More than anything else, we followed the layout of
the land, especially the trees. We tried to cut down
as few as possible. And if we had a nice palm or cashew,
we sometimes built a house right around it. We followed
a basic model of a friend’s log cabin in Tennessee,
but that’s it. The most important thing was
that we tried to make the houses look like they belonged
there. If they were out on their own, without the
surrounding trees and vegetation, they wouldn’t
be very attractive…but as part of the actual
setting, they’re very nice.
How to find help
On Roatan I found a contractor, a local, named Richard
Bodden, who is the brother-in-law of a friend I’d
made on an earlier trip. This is important. If you’re
hiring help, find one guy you can deal with…then
have him hire all of the subcontractors. Believe me,
you don’t want to get involved with the Honduran
labor laws. And you definitely don’t want to
be directly responsible for all of these people. Richard
has done a great job—we’ve now built 30
houses together.Richard is also one of the main builders
at another project I’m helping with on Roatan…Luna
Beach (more on that in a minute). In all at Sundancer,
I built 30 two-bedroom units. It was a total of 18
buildings. Some were a single unit, most were duplexes,
and one building had four units.My project is one
of the few on Roatan that has sold out, I think, because
I’ve taken the time to build really nice places…I
made them affordable to the average person…and
I tried very hard to preserve the surroundings.
Also, I’d like to make it clear that I couldn’t
have done any of this without my wife Holly’s
help…and the help of Delmar George, who died
of liver cancer in the first years of the project.
I recommend you have a few close people, whom you
can trust implicitly, to help you in any kind of undertaking
such as this.
Our next project
I’m now helping to do the marketing for a project
called Luna Beach. I’m not doing any of the
hands on work, that’s being handled by Don Goins,
another IL subscriber, who lives on the island full
time. Don is a retired ear surgeon from Denver, CO.
He was the second buyer at Sundancer and lived there
until he started Luna Beach. He’s now one of
the biggest land owners on the island…and I
was happy to help him with his development.
Don followed my advice and built the amenities first.
In fact, the bar and restaurant have been open for
quite awhile. For Sundancer, I was there in person,
every step of the way. I’m always amazed at
the guys who come to a place like Roatan, set down
a bunch of money for a project, return to the United
States, then come back surprised to see that nothing’s
been done. If you want to get something done in an
emerging market like this, you’ve got to be
there yourself…at least in the beginning. Don
will be at Luna Beach for all of its construction.Luna
Beach is a little more upscale than Sundancer, but
it’s in the same vein. These places are really
beautiful. The exotic wood floors and tiles make the
places very nice inside.
With Sundancer, we started off selling the place
as quarter shares, which meant you could buy any three
months of the year. But since it was just my wife
and me running the operation, we simply weren’t
set up to do it. It was a logistical nightmare. Since
people weren’t there for part of the year, we
wound up paying their taxes for them…handling
their insurance, and dozens of other things that come
with property management.
We quickly learned that selling the units
outright was a whole lot cleaner.
At Luna beach, Don will have a full staff of people…so
he’ll be able to offer timeshares. I think it’s
a great way to offer people their own getaway. Timeshares
are a great service to offer if you’re building
a development. This way, for less than $50,000, people
can have their own private Caribbean escape for three
months of the year—and avoid all the headaches
that come with owning resort property. Or if they
want to come back to the island for one month of the
year, they can do it for only $14,400. I’d recommend
that you try to offer a similar service if you’re
building a development somewhere.
If you can offer someone a timeshare, they don’t
have to worry about maintenance, security, or any
of the other hassles you’d have to consider
if you owned the place yourself. And with this kind
of resort, people also get access to a pool, a private
beach, a restaurant, trails, and boat docks.