A developer with eyes on a growing tourism market hopes to lead the way in a new real estate trend.
By Wendy Lyons Sunshine | Contributing Writer
When the Sarasota real estate market crashed around 2008, Jeremy Ricci saw opportunity.
A resident of Bucks County, Pa., the real estate investor had vacationed in Sarasota and loved it. “The tough thing about Sarasota at the time was that there weren't a lot of jobs,” says Ricci. “So, from a builders' perspective, how can we take advantage of the low prices, but still have people to rent from us?”
A trailer park for sale close to Stickney Point Road and U.S. 41, near Siesta Key, sparked the idea for vacation rentals. Ricci figured that while the Sarasota economy was floundering at the time, property this close to the beach could attract out-of-state vacationers with money to spend. Ricci and his business partner, Phil Falcone, bought the property for a little less than $1 million.
But the partners didn't want to own a trailer park. Instead, the most popular RVs, the duo learned, were tiny houses — transportable, miniature dwellings with the architecture and some of the amenities of full-size homes. In those small dwellings, Ricci has seized on a big opportunity to meet an untapped market need.
“All we did to tweak the business model was say, 'Instead of customers renting the ground, why don't we buy the RVs and rent people RVs?'” Ricci asks. “And, if we're going to rent RVs, we might as well pick the one that's most popular right now.”
Ricci and Falcone phased out mobile homes on the property and installed fully furnished tiny houses that range in size from about 220 to 360 square feet, with some sleeping up to six people. The tiny homes are built outside the region and shipped to Sarasota. A few are built in Amish country towns in Ohio, while others are from Utah and Wisconsin. Ricci spends about $50,000 to $90,000 and up for each new tiny house.
Ricci estimates he and Falcone save about 15% on building costs by working with Amish builders, whose religious beliefs against social welfare exempt them from workers compensation insurance and social security.
Ricci and Falcone bought their first tiny home in 2012, and they expect to put in up to 13 units at that location of varying styles and design schemes. “It just worked out well. We rented it out, and then if there's a week that we wanted to go down, and stay there, we could do that,” Ricci says. Visitors pay from $139 to $199 a night to stay at the units, Tiny Siesta. Says Ricci: “We're still trying to tweak the numbers.”
Ricci originally envisioned an art gallery of tiny houses. Builders, however, showed little interest in that approach. So Ricci shifted models, and now uses social media for marketing and spreading the word about the units. Instagram has worked the best, so far, and he's exploring Facebook and other sites. “We just decided that we're going to go all in with social media and really try to promote it,” Ricci says.
When renters fell in love with the tiny houses and wanted to buy one of their own, Ricci found another new income stream, in brokering tiny houses. (He's taken six orders for an investor so far, and three orders for personal use, among many inquiries.) Ricci has also been in discussions with an HGTV TV show called “Tiny Paradise” about the possibility of showcasing one of his designs on an episode.
“It's a fun business in the sense that all the customers are raving fans,” says Ricci. “It's really gratifying to have customers that are just so enthusiastic and want to share what you have with other people.”