Introduction to Developer Diaries
Richard Bexon
Good morning, guys, and welcome to episode 286 of Costa Rica Real Estate and Investments with me, your host, Richard Bexon.
Today we’re going to be doing another Developer Diaries episode. It’s something we’ll be doing every single month where we dive into developing here in Costa Rica.
Jake will actually be interviewing me today. Jake is one of our investment specialists, and he’ll be interviewing me about developing the Manuel Antonio Treehouse Villas, specifically Villas 1, 2, and 3 — and the gray hairs I got from that. My hair seems to go gray instead of falling out, so I’ll take that.
We did one on Villa Xanadu in Arenal, so you can go back and listen to that one if you want. It’s a couple of episodes back, I think episode 281 or 282, but anyway, we’re going to dive straight into it.
Remember guys, if you’re looking to do anything in Costa Rica and just want to have a conversation with us, you can email us at info@investingcostarica.com.
If you’re looking for buyer’s representation when buying real estate here in Costa Rica, we know the country like the back of our hands — what you can do and what you can’t. A lot of clients also end up touring with me personally, if you’re that unlucky.
And if you’re starting to build here, want to develop, or want to get into hospitality, we’ve done a lot of things here in Costa Rica. So again, no obligation — email us at info@investingcostarica.com, or check the description below for links to reach out to us.
But anyway, let’s get straight into the podcast.
The Origins of the Project
Jake Alexander
Good morning, everyone. I’m Jake Alexander, and welcome back to another episode of Costa Rica Developer Diaries, where we break down real numbers, real projects, and lessons learned from building here in Costa Rica. Today we’re diving into Villas 1, 2, and 3 of the project. This development didn’t just launch a project for us — it actually reshaped the direction of our company.
This build had everything: six months of permitting delays, the wettest rainy season on record. At one point you and I even became roommates for a little while because you moved down here to take control of the project toward the end.
But before all of that — before the construction — there was a coffee meeting. Rich, take us back to 2023. You’re sitting with Jim DeMollis at Si Como No, and he tells you this land is for sale. When did that conversation turn from casual into the start of something much bigger?
The Coffee Meeting That Started It All
Richard Bexon
Let me go back a little before that.
I had put together a group of friends to buy and sell some land during the craziness right after the pandemic, and it was doing very well, someone suggested that I should put together an investment fund with clients and friends. So I created that structure, and we were sitting on about $1.5–$2 million in cash, just waiting for opportunities to come up.
I was having coffee with Jim, who unfortunately passed away during the building of this project, but his legacy still lives on in the project. He said, “Hey Rich, you should buy my hotel, Si Como No.” He was looking to exit and wanted someone who could carry on his eco-sustainable vision, I told him that everyone I talk to says owning a hotel is like owning a boat. The two best days are when you buy it and when you sell it — the rest of the time it’s a lot of work, hotels are great, but they involve managing a lot of people, Jim said, “Well, if you’re not going to buy that, why don’t you look at buying those lots behind it?” I didn’t even realize the lots were for sale.
We walked over there, and he showed me the land. He pointed out where his apartment was and showed me the parcels that were available. I had always been interested in creating a small controlled community. That idea had always been in my mind — something where we could influence the neighborhood. That way, when the tide rises, all boats rise together. It also meant we wouldn’t just be building random houses without any control over the surroundings. At first, I didn’t think much about it because the price he wanted was higher than what I was willing to pay. But the idea stayed in my head. Eventually I decided to make an offer. I told him what I could pay, thinking that the worst-case scenario would be to improve the land, add roads, and sell the lots. Honestly, I probably would have made more money doing that than building.
The Eco-Legacy of Jim DeMollis
Jake Alexander
You mentioned that Jim’s legacy lives on in the community. Can you unpack that a little?
Richard Bexon
Jim was a real eco-warrior. He had been in Costa Rica since the 1990s. When the Las Islas tower project was proposed near Manuel Antonio — it was supposed to be a 20-story building — he strongly opposed it. The developers had cut down some forest without permits, and Jim rallied people together to stop the project.
He hired an environmental lawyer and fought against it. Anytime someone was doing something that went against the sustainability principles of Costa Rica, Jim was willing to stand up against it. I stood alongside him a few times. His belief was that if you’re here for the long term, you have to care about the country and protect it. I think he saw some of that mindset in me, and that’s why he was willing to sell the land to us at a price below market value. There was still a lot of work to do on the land, which is one reason nobody had bought it yet. But I could see the potential — where the roads would go, where infrastructure could be placed.
Once Eric, our head of construction engineering, reviewed it and said it looked good, we moved forward. We did about 30 days of due diligence, closed the deal, and suddenly we owned the land. And then it became: okay, what now?
Designing with Sustainability in Mind
Jake Alexander
What environmental elements did you implement in the project to carry on Jim’s legacy?
Richard Bexon
Well, we tried to design the project so that we didn’t have to cut down trees. I think we ended up cutting just one tree, and that was really the only one that absolutely had to go. When we worked with the architects, I made it very clear that I didn’t want to cut down trees if we could avoid it. The land itself wasn’t dense forest. It was more pastureland with some trees on it, but it’s surrounded by primary rainforest and acts as a wildlife corridor leading to the national park. Still, I wanted to preserve as much of the natural environment as possible.
For example, in Villa One, the deck has a huge mango tree growing right through it. Technically, I didn’t need a permit to cut a mango tree because fruit trees can be removed in Costa Rica, but I decided to keep it. The whole concept of the treehouse villas is to be around the trees and up in the canopy. The trees provide shade and food for wildlife — monkeys, scarlet macaws, and toucans. We’re really just guests in their environment.
I didn’t want to destroy the backdrop that makes Costa Rica and Manuel Antonio so special, which is the forest and the wildlife. Instead, I wanted to bring that environment into the experience. We also tried to keep a small construction footprint. Rather than spreading out and covering the ground with concrete, we built vertically — three stories up into the canopy. We used lighter construction methods where possible instead of pouring excessive amounts of concrete.
We also focused on rewilding parts of the land, planting vegetation and trees — especially almond trees because macaws love them. When I first came to Costa Rica, you would only see scarlet macaws around Jacó. Now they’re along the entire stretch down the central Pacific coast. There have also been rehabilitation projects in Guanacaste, so they’re starting to reappear there as well. We also implemented things like saltwater pools and other small environmental measures.
The Hospitality Gap
Jake Alexander
For about 18 years, when you were working in tourism, you were telling hoteliers they should build luxury villas. Why weren’t they listening?
Richard Bexon
Number one, they were focused on what their clients wanted, but they didn’t necessarily understand how villas fit into their business model. We could clearly see that travelers were asking for villas. You had developments like Reserva Conchal and Tulemar, which are larger projects that combine vacation rentals with hotel-style services. But many traditional hoteliers didn’t want to build villas because they didn’t understand residential construction. They know how to build hotel rooms and run hotels. They don’t necessarily understand land development, home construction, or selling real estate. They’re in the room rental business, not the real estate development business.
Managing a hotel is actually much more complex than managing vacation rental villas. But hoteliers often don’t want to invest more capital into something unfamiliar. Running a hotel already requires constant reinvestment. When you compare revenue per square foot, hotels can sometimes perform better than villas. In a villa, you need outdoor areas, pools, privacy, and social spaces. In a hotel, you can simply add more rooms to an existing structure. So for them it often seemed easier just to expand the hotel. But the smartest operators understand that villas can become part of their exit strategy. They build the hotel, create the brand and experience, and then sell the villas around it. A lot of people just didn’t understand that model. Real estate development and hospitality are very different businesses.
Jake Alexander
What did you see in traveler behavior that developers weren’t seeing?
Richard Bexon
Developers often just build houses without understanding tourism. They build homes that people might want to live in, but not necessarily homes designed for vacation rentals. A vacation rental home needs to be an experience. Most owners only use their vacation homes for a few weeks each year. The rest of the time the property is rented to guests. So, the design has to reflect that. A house designed for everyday living is very different from a house designed for a vacation experience. Vacation homes should feel unique, fun, and memorable.
You’re competing with hotels and resorts for guests’ attention. Many developers don’t fully understand tourism. They don’t think about property management, service standards, or how distribution channels affect pricing. They often just list the property on Airbnb or VRBO. But when you work through the luxury travel network, things operate differently. Guests often book through travel advisors in the United States who are planning trips for high-net-worth clients. Those clients aren’t comparing dozens of properties online. They trust their advisor to recommend the best experience. So, if your property is integrated into that network, it becomes part of curated itineraries. That allows you to command a higher average daily rate. Most developers don’t understand that ecosystem.
On one side you have hoteliers who understand guest experiences but don’t build villas. On the other side you have developers who build homes but don’t understand hospitality. There’s a gap in the middle, and that’s where experiential villas come in. We wanted to do it at a boutique scale. One of the things that originally made Costa Rica great was its small hotels. About 80% of hotels in Costa Rica have fewer than 40 rooms. But the economics are getting harder. Now we’re seeing larger brands entering the market — Hilton, Marriott, Waldorf Astoria, Ritz-Carlton. There’s a Hilton coming to La Fortuna, and more international brands are coming to Manuel Antonio.
Small boutique hotels are becoming more difficult financially. But villas operated with hotel-style service can fill that gap. They don’t require a large staff, front desk, or restaurant. That’s part of the concept behind these projects.
Turning Vision into Action
Jake Alexander
At some point did you just decide, “Okay, I’m doing this myself”?
Richard Bexon
Well, I had a lot of backing from people in the luxury travel network. Before making a big investment or starting a development, I always have a moment of doubt where I ask myself, “What the hell am I doing?” If I don’t feel that nervousness before making a decision like that, something isn’t right. I felt that doubt before buying the land and before starting construction. But the data and demand were clear. Right now, we’re seeing around 85% occupancy in Manuel Antonio from January through June, which is incredible. I also knew that no one else was doing this at a boutique level.
I spoke to some of the sales teams at Costa Rican Vacations and other agencies, and they told me there was a desperate need for new inventory. Most of the villas in Manuel Antonio were older properties. There wasn’t much new product on the market. When you look at locations with high average daily rates and strong occupancy in hotels, and you see villas performing well even when they’re not particularly impressive, you realize there’s opportunity. If you build something better in the right location, it can perform extremely well.
The Treehouse Concept
Jake Alexander
Why treehouses? Was that a marketing instinct?
Richard Bexon
I wouldn’t call it genius — there’s probably a thin line between genius and stupidity. But after spending so many years in tourism, I noticed that people constantly search for treehouse experiences. There’s a romantic idea behind it — kind of a Robinson Crusoe feeling of living in the jungle canopy. When I was working in travel, clients would often mention wanting to stay in treehouses. There were a couple of treehouse-style properties in Costa Rica — one near Arenal and another near Puerto Viejo — and they were always fully booked. I’m actually surprised we don’t see more treehouse-style developments here. Costa Rica could easily support something like a jungle Ewok-style village resort.
Look at Nayara with their luxury tents — they’ve done extremely well with that concept. Costa Rica is almost like a jungle safari destination. It’s not the same as an African safari, but once you’re in the jungle surrounded by wildlife, the experience is similar. We probably should lean into that idea more. The word “treehouse” fits perfectly with Costa Rica — lots of trees, wildlife, and adventure. And if the name didn’t work, we could always change it later.
But the architectural design really did embrace the treehouse concept — three levels up in the canopy, wide open, and connected to the jungle environment. At the same time, we still included the luxury elements guests expect: air conditioning, modern amenities, and high-end finishes.
The Design and Construction Process
Jake Alexander
So, you bought the property, completed due diligence, and closed on the land. What was the next step?
Richard Bexon
We had worked with a variety of architects on projects for our clients. Our company manages around 10–15 home builds per year for clients, so we had experience with several architectural firms. Eventually we decided to work with Juan Diego Cárdenas. We had collaborated with him on a project in Guanacaste, and we liked his approach. He was young, creative, and his pricing was reasonable. I had a concept in mind, but I try not to restrict architects too much.
Instead, I gave him broad guidelines: It needed to be a treehouse-style villa, three stories high, open to the jungle, designed around existing trees. We also wanted key amenities like a pool, a slide, outdoor living areas, and a barbecue space. The emphasis needed to be more on outdoor living than indoor space. And I gave him a target size for the building based on our budget. Architects usually don’t get it perfect on the first draft, but they often present a few strong ideas.
Then we refine the concept together. The design process took around four months. Once we finalized the architectural concept, we moved on to construction documents. Our internal engineering team reviewed those plans carefully, and we did some value engineering to control costs. After that, we put the project out to bid with multiple construction companies. I’m always surprised that many people in Costa Rica don’t do this. The price difference between contractors can be enormous. On one project we saw bids ranging from $1.2 million to $1.8 million — a $600,000 difference for essentially the same construction. So, we always recommend designing the house first and then inviting multiple builders to submit bids. If you choose a contractor before bidding, you might end up paying significantly more than necessary.
Lessons from Construction and Permitting
Richard Bexon
Looking back, the project ended up changing the direction of our business quite a bit. The construction company we initially hired was a good company that we had worked with before. But when you start scaling a project — building three homes at the same time while also doing infrastructure work — you start to see inefficiencies in people’s businesses. Every company has inefficiencies, but when pressure increases, those weaknesses become obvious. It’s like a bag with holes in it. When you pour water into it, you suddenly see where everything leaks out. They were very good at building one home at a time, but managing three homes simultaneously — plus roads, utilities, and infrastructure — was a different challenge.
They didn’t have much experience with infrastructure work, although thankfully our own team did. In hindsight, I wouldn’t change the experience because we learned so much from it. We ended up starting our own construction company because we realized we needed more control. The engineer assigned to the site wasn’t as involved as he should have been. Ideally, an engineer should be on site regularly, checking work and overseeing quality. Even the foreman (maestro de obras) should have been inspecting the work more closely.
Sometimes it was basic things. For example, after tiling a bathroom floor, you should pour a bucket of water on the floor and see how the water drains. If the water pools in the wrong place, you know the slope isn’t correct. We discovered issues like that close to completion. When I pointed it out, the foreman shrugged his shoulders. The engineer was mostly working from the office rather than being on site.
When you’re not present every day, you miss things. We were visiting the site about two days a week, but when you spend more time there you start to notice problems. Communication and organization became major issues. And then there was the rain. We started construction around September, which was one of the wettest rainy seasons in years. We would dig foundations and then the holes would fill with water. You can’t pour concrete when the foundation pit is full of water. So, we had to wait for it to dry out, then try to pour the concrete before the next rainstorm came. Sometimes it would rain again and we’d have to stop and start over. That alone pushed the timeline back by several weeks. Looking back, I probably would have delayed the start of construction until December, when the rainy season ends.
We ultimately finished in August, and financially it didn’t make a big difference whether we finished in August or November. Starting later might have reduced some stress. That said, finishing in August did allow us to gather some early reviews from guests in September, October, and November, which helped strengthen bookings for the high season starting in December. Even before the villas were completed, we already had around $600,000 in future reservations based purely on renderings. That’s extremely unusual. But people trusted us because of our track record. They believed we would deliver the quality we promised.
Permitting and Bureaucratic Challenges
Jake Alexander
To be fair, you weren’t originally planning to start construction in September. Let’s talk about the permitting process. Why was there such a long delay, and what advice would you give people going through similar challenges?
Richard Bexon
This project was more complex than just building a single house. We bought the land in 2023, created a master plan, and then started designing the homes. By early 2024, we were ready to begin the permitting process. First, plans are submitted to the College of Engineers and Architects (CFIA). That process is usually straightforward. Our architect, Sofía, handled the submission, and we passed through that stage in about four to six weeks. After that, the plans go to the municipality, and that’s where things can slow down. Municipalities often only have one or two engineers reviewing projects. Their interpretation of regulations can vary widely depending on their experience. When we submitted our permit application, we initially heard nothing for several weeks.
When we followed up, they told us they had a large backlog. Eventually they reviewed the plans and requested additional information. Every time they ask for something, you have to resubmit through the system. And when you resubmit, you go back to the end of the queue. You don’t jump to the front of the line. So, the process becomes slow. Some of their questions were about access roads, others about earth movement.
At one point there was confusion between square meters and cubic meters when calculating earth movement. They thought we needed an environmental permit called a D1, which applies when large volumes of earth are moved. But the engineer was mistakenly adding the square footage of all three villas together instead of evaluating each property separately.
We had to sit down and explain that each villa was on its own plot. Sometimes a new engineer would review the project and ask entirely different questions. There wasn’t always consistency. But I don’t blame them. After some controversial developments in Costa Rica where forests were cleared illegally, municipalities became much more cautious. Engineers are trying to protect themselves legally. So, they ask a lot of questions to avoid approving something incorrectly.
It can be frustrating, but I also respect it. Costa Rica is careful about protecting its environment. That’s one reason the country is still so beautiful. Doing business here isn’t always easy. It’s expensive and sometimes slow. But the quality of life makes it worthwhile. I always tell people that if your only goal is to make money, there are easier places in the world to do business. But if you want to live somewhere beautiful and build something meaningful, Costa Rica is incredible.
Jake Alexander
When you first started building Villas 1, 2, and 3, you had one construction company rotating between the three homes. How did that process work, and at what point did you realize you might need to step in and take control?
Richard Bexon
There were essentially two crews working on the project. Because of the way construction works, you can’t build all levels of a house at once. You have to pour the foundations, then the first level, then the second level. We also had only one metal construction crew, so they would finish one villa and then move to the next. After the metal structure was completed on one villa, we would move in to pour concrete and start the next stage. So, the crews rotated between houses.
There was logic to the sequencing, but the timeline was tight. The rainy season had already delayed us by about four weeks. Around March or April, the construction company said they could recover that time and catch up to the schedule. At that point we trusted them. But by May, the delay hadn’t been recovered. We had guests scheduled to arrive in August, so timing was critical. The contractor kept assuring us that everything would be finished on time. Then in late June or early July, they admitted they wouldn’t be able to complete the project until mid-September. That obviously wasn’t acceptable because we already had bookings. So, I decided to go down to the site myself and figure out what was happening.
Once I spent more time on site, it became clear that the main issue was communication and organization. The engineer wasn’t acting as the project leader. The foreman was overwhelmed and often unavailable when problems came up. So we implemented a much more structured system. Every day we held two meetings — one at 8:00 AM and another at 2:00 PM. During the morning meeting we set the priorities for the day and assigned tasks. In the afternoon meeting we reviewed what had been completed and planned the next steps. We also assigned someone specifically to manage the priority list, ensuring tasks were completed in the correct order.
Once we reached the later stages of construction, I divided the workers into two groups: One group focused on the heavier construction tasks — what I jokingly called the hammer-swinging crew. The other group focused on finishing work and details. The finishing crew was critical because the original construction team wasn’t very detail-oriented. We also hired specialists to install furniture and final interior elements. A lot of what we did at that stage was simply applying basic project management principles. Communication, planning, and organization. When those things improve, the project moves forward much more efficiently.
Key People and Team Contributions
Jake Alexander
If you had to identify one person who was instrumental in getting the villas completed on time, who would it be?
Richard Bexon
That would definitely be Eric, our director of construction engineering. Eric is also my partner in the construction company we started afterward. He has more than 30 years of construction experience, and he can analyze a problem and find a solution almost instantly. For example, he designed the entire rainwater management system for the property. He also oversaw the road construction, making sure the base layers and compaction were done correctly. When major decisions needed to be made, Eric was the person I trusted most. But it really was a team effort.
Our interior designer Sadi handled the entire interior design process. She simply gave me a list of items to purchase, and when I returned to the property much of the interior was already installed. Heidi now manages the day-to-day operations of the villas, including cleaning and guest preparation. Carlos takes care of landscaping and maintaining the grounds. We also had Nati acting as project manager during construction. Even the original construction company contributed significantly, especially toward the end when everyone came together to finish the project.
It wasn’t an easy process. But sometimes difficult projects teach you the most. There’s a saying: “Calm seas don’t make good sailors.” Challenges force you to improve. And now we know exactly how to build these villas efficiently. For example, Villa 4 was completed much faster. We started with only the foundations in place, and we still finished construction in time for guests arriving December 15.
Investment Performance
Jake Alexander
From an investment perspective, how are Villas 1, 2, and 3 performing?
Richard Bexon
They’re performing very well. This is their first year, and we expect a mid-year dividend of around 6%, followed by another 6% at the end of the year. So overall returns should be somewhere around 10–12% annually. There’s also been significant appreciation in property value. For example, Villa 1 cost about $850,000 to build, including the land. Now we’re selling Villa 5 for around $1.1 million, and Villa 6 for about $1.4 million, because it includes more land and additional features. So, investors are seeing both income and capital appreciation. Villa 1 was sold as a fractional ownership investment, Villa 2 was built by our investment fund, and Villa 3 was built for an individual owner.
All three are performing well, and the owners are very happy. They’re generating income while also enjoying the villas themselves. The location helps tremendously. The property is in the heart of Manuel Antonio, but still quiet and surrounded by nature. Within five to ten minutes, you can walk to restaurants, services, and beaches. That combination of privacy and accessibility makes the development very appealing.
Handling Cost Overruns and Investor Relations
Jake Alexander
When the construction costs increased and you had to ask investors for additional funds, what was going through your mind?
Richard Bexon
That was extremely stressful, It was the first time I had to ask investors for additional capital, asking people to send more money — even if it’s only $10,000 each — is not something you enjoy doing. One of our investors is a very successful developer in Europe. He gave me good advice. He said that in development projects, cost overruns are common, and experienced investors expect them sometimes. The key is transparency. So, I explained exactly where the additional costs came from — mainly infrastructure expenses and some improvements we made to landscaping and furniture. None of the money was wasted. It was reinvested into the project to improve the overall product. In hindsight, if I were starting again today, I would probably raise more capital upfront to provide a larger buffer. But that’s something every developer learns over time.
Jake Alexander
What are you most proud of about these first three villas?
Richard Bexon
Honestly, I’m proud that we finished them and survived the process. But beyond that, I’m proud of the opportunity we created for smaller investors. Someone with $100,000 can now own part of a luxury property in Costa Rica. They can visit, enjoy it, and also benefit from the investment. I’m also proud of the guest experience.
The reviews are outstanding — all five stars. The team running the property is fantastic. And I’m proud of the small details as well. We named the streets inside the development after people who were important to the project. One road is Calle DeMollis, named after Jim. Another road is named after our lawyer who passed away during the project. Those touches make the development feel personal.
I’m also proud that the project supports the local community. Guests interact with local staff, tip well, and contribute to the local economy. Some large resort developments isolate guests from the surrounding community. I prefer a model where visitors experience Costa Rica more authentically.
Investor Fit and Long-Term Outlook
Jake Alexander
Last question. Who should not invest in a project like this?
Richard Bexon
This investment is about 80% financial return and 20% lifestyle. If someone wants to live in Costa Rica for several months every year, this probably isn’t the right investment. But if someone wants a diversified investment where they can visit occasionally — maybe once or twice per year — it works very well. Some investors own shares in multiple villas. For example, they might spend five nights in Arenal and five nights in Manuel Antonio each year. That creates a perfect vacation itinerary.
The key advantage we have is our distribution network. Our average daily rate is about twice as high as many other three-bedroom villas in Manuel Antonio. That’s because we’re connected to luxury travel agencies and direct booking channels. Airbnb still brings some bookings, but it’s not our primary source. Our biggest channels are direct bookings and luxury travel advisors. That network took nearly 18 years to build, and now we’re able to plug these villas into it.
Jake Alexander
Thank you for joining me for another episode of Developer Diaries. I’m looking forward to the next one where we’ll talk about Villa 4.
Richard Bexon
Thanks everyone for listening.
It’s always a little strange being interviewed on my own podcast, but people enjoy hearing about the process and the lessons learned. If anyone is interested, we still have some fractional investment opportunities starting at $100,000 in Manuel Antonio. We also have a new project coming soon in Arenal later this year. If you’re interested in investing, relocating, developing, or buying real estate in Costa Rica, email us at info@investingcostarica.com. Thanks again for listening, and we’ll see you in the next episode.
