Renovating a $1.1M Hotel Without Ever Closing It With Anthony Tokosky

Anthony Tokosky is the Owner and General Partner of The Marlo, a 24-room boutique hotel in Solvang, California, blending Danish-inspired design with modern comfort and serene gardens. He is also the Owner and President of Priority Doors and Windows, a company providing high-quality door and window products directly to homeowners and construction professionals. Anthony leads The Marlo's acquisition, renovation, and repositioning with disciplined underwriting and thoughtful guest experience. A former software engineer, he moved into real estate investing after growing up around his family's restaurant and rental properties. In this episode… How does a software engineer end up owning a boutique hotel? Anthony Tokosky compressed a five-to-ten-year plan into 14 months by joining a hotel acquisition mastermind, learning to underwrite until the numbers ruled out the deals he was emotionally attached to, and partnering with people whose experience covered his gaps. The result was a 24-room hotel in Solvang, California. In this episode of The Lights On Podcast, host Kin Sio talks with Anthony Tokosky, General Partner of The Marlo, about the full arc of acquiring, financing, renovating, and repositioning an independent hotel as a first-time hotel owner. Anthony grew up inside the work. His parents are Chinese immigrants who came from Southern China, opened a small restaurant, and bought rental properties on the side. He was no more than four years old when they started bringing him and his siblings along to properties they were flipping after the restaurant closed at eight or nine at night. He studied computer science, spent 12 years in software, and ran real estate on a parallel track the whole time. The inflection point came with a short-term rental in San Diego and the question every short-term rental operator eventually hits: how do you buy the second one, and the third, and the fifth? The mastermind taught him to underwrite. As he puts it, deals he thought were cool and fun and sexy turned out to have numbers that told another story. CoStar reports and market data got his team to an early thesis that The Marlo, then called The M, was an underperforming distressed asset. What converted that thesis into conviction was door-knocking. His team walked the Solvang market and asked nearby operators directly what the busy seasons were and how many rooms they had occupied that exact weekend. One nearby hotel was running roughly 30 to 40 percent better on a product Anthony describes as newly renovated but not beautiful. That gap was the delta. Being three blocks off downtown looked like a liability on paper; on the ground it meant two large gardens and a parking lot, which the downtown properties cannot offer because every spare foot of their land becomes parking. The deal came as a package: the hotel plus the duplex next door, because the two lots combined form the gardens. On the hotel, Anthony's team put down roughly 20 to 30 percent equity and filled the remaining 70 percent or so with a mix of bridge lending and seller financing. The house carried a conventional loan, so they structured it with seller financing plus equity rather than taking on new debt, leaving them with two capital stacks that both involved the same seller. The renovation was funded as equity, not a construction loan. Anthony could not have gotten bridge lending on his own balance sheet with no hotel operating history, which is where his partners mattered: Neil, a seasoned hotel owner-operator, carried weight with lenders and brokers and added credibility on the equity raise, while Alex handled accounting and Gideon flexed across marketing, permitting, and research. Then came the part that runs on grit. The renovation budget was roughly one million to $1.1 million, and despite delays of a few months, they came in slightly under, even after adding a large stone-veneer fireplace that was never in the original scope. The property is split across two buildings with a parking lot between them, each with its own garden, so they renovated one building while operating the other and generated revenue during a stretch their underwriting had assumed the hotel would be fully closed. Anthony managed it on site himself, driving from San Diego to Solvang at 3 a.m. every Monday for months, because leaving any later than 4:30 turned a four-hour drive into a six-hour one. Active construction ran about ten or eleven months; from acquisition to completion it was closer to two years. The repositioning was deliberate. Before renovating, they hired a branding and marketing consultant named Kay and built a target guest avatar, working through what that guest eats, what their morning looks like, what they do for a living. That work produced the name: The Marlo, a nod to Merlot and the Santa Barbara wine country that surrounds Solvang, with enough playfulness to suggest a golden retriever playing fetch in the backyard. Pets were the gap they saw in the market, and Anthony says they have been proven right. On raising capital, Anthony is blunt. The biggest mistake he sees is people assuming a good deal will attract money on its own. It requires a track record, the ability to sell a dream, and focused effort. He has watched people in his network call a week before closing, short a million and a half dollars, facing the loss of $250,000 in earnest money. Friends-and-family money carries a different weight than your own, and he advises anyone considering syndication to be mentally prepared for it before they start.