Alchemy negotiated the purchase price at a cash-on-cash yield over 16% because other investors had not realized the operating cash earnings had been subsidizing $1 million losses at an off-site spa that was being closed by the time of purchase. We also saw the upside and secured the permits to develop the vacant 65 acres for resort and residential. We further added value by negotiating purchase terms that included $5 million of working capital that could be applied, post-closing, as our equity contribution so we secured 95% LTC funding from the insurance company lender in a participating mortgage. The independent valuation report at the purchase closing was $45 million, $15 million more than our purchase price. Within the first year, we got the development site approved for future planned development. Read Less

Most lenders and investors were confused by this day spa resort operation, despite its strong reliable earnings with high profit margins. Comparable hospitality projects - without lodging - were rare and so we had to tailor a presentation for lenders to understand. Because we proposed to continue operating independently without a major “flag,” lenders were concerned, and we needed to instill confidence. Given our track record, credibility, and approach, the lender had confidence in us and our proven ability to quickly secure County approvals for a planned development to enhance property collateral value. Read Less