Marina Investment

In this example an investor participates in the marina investor syndicate or equity group which is a new LLC setup for a specific property. The investor group purchases the property and contracts AMM to develop, operate, manage and market the property.

The minimum amount of participation is $500,000 and the maximum for any individual investor is $3,000,000. Individual participants must be accredited investors or must meet the definition of an accredited investor. Corporate participants must simply provide a corporate resolution authorizing participation.

Cost Assumptions: The investor syndicate reviews the project submitted by AMM and approves it for participation. For this example, the project has a projected cost of $20,722,000

Marina / Land Acquisition.............................$9,000,000
Improvements..............................................$4,000,000
Sales, Marketing, & Soft Costs.....................$3,500,000
Operating & Carrying Costs..........................$4,222,000
Total Projected Cost.................................$20,722,000

The Investor Syndicate will provide the cash required to gain funding for the project. 30% of the total project cost is used to simplify this example. Investors will contribute a total of $6,216,600 to this project.

Revenue Assumptions: Revenues will be generated from the operation of standard profit centers such as fuel, restaurant and service department. "Conversion Revenue" will be generated from the sale of wet and dry slips.

Projected Operating Profit.............................$1,750,000
Projected Sale of Wet Slips.........................$24,450,000
Projected Sale of Dry Slips..........................$33,500,000
Total Revenue .........................................$59,700,000

Gross Profit ..............................................$38,978,000
Investor Syndicate Share at 50%..................$19,489,000
Investor Syndicate's Cash Invested............... $ 6,216,600
Return on Investment....................................... 313.00%

While this is an attractive scenario - projects that can be capitalized for under $30 million - generally are capable of producing gross profits between $12 and $50 million depending on the location, competition, purchase price, expansion potential and other general market conditions.

Investors are typically required to participate in a development "conversion" project for terms of 24 to 60 months. Long term income projects are also available. Income projects are operated as conventional rental properties during the first 7 to 10 years for ordinary income while the property appreciates. Conversion to condominium is then used as the exit strategy once the property has reached the desired level of appreciation and market conditions are optimal.

Since the average urban/suburban coastal marina property appreciates at annual rates between 8% and 14% a property will normally double in value in 5 to 7 years.

FOR MORE INFORMATION VISIT
Atlantic Marine Management
www.marinaassociates.com

Rent vs. Buy Example Two
50' Deep Water Wet Slip

Your wet slip purchase breaks even
after 1.2 years.

This is based on your slip's equity minus a 5.00% sales commission paid to brokers or real estate agents when you sell your slip. It also assumes your slip will appreciate at 8.00% per year and you have an income tax rate of 34.00%.

If you cannot remain in your slip for at least 1.2 years you should consider continuing to rent. We calculated your breakeven point by examining how long it would take to create enough equity in your slip to exceed the value of investing your cash on hand.

We also accounted for differences in your monthly rent and boat slip payments. If your rent payment is less than your net boat slip payment, we add that monthly savings to your investment. If your boat slip payment is less than your rent payment we subtract that amount from your investment. You may notice that on the schedule viewed with the link below, the investment value can be reported as negative. This happens if your boat slip payment is significantly lower than your rent payment. It illustrates that if you continue to rent the extra cost of renting would, in effect, use up your cash on hand.

Loan Information
View Payment Analysis Page

For $1145.70 and a down payment of $46,633 you can purchase an indoor boat slip with a price of $175,000. This is for a 30 year mortgage at 7.000% in the amount of $128,367. Total closing costs for this loan are estimated at $3,367.35.

Your current monthly rent is $750. The expected inflation rate of 3.75% annually was used to estimate future rent and property taxes.

The rate of return used for open market investments was 10.00% per year.

Your $1,145.70 monthly payment consists of:     
    • Principal & Interest $854.03
    • Taxes of $291.67

Closing costs of $3,367.35 consists of:
    • Amount paid of points $1,283.67
    • Origination fee $1,284
    • Other closing costs $800

If you started with $50,000 Cash on Hand and invested it at 10% annual return, you investment at the end of the 20 year term would have a value of $1,028,855

You would have spent $484,193 to rent the slip over the same term and would not have any equity in it..

Investing the same $50,000 into the purchase of a deep water boat slip - your equity in the slip you own will be worth $2,205,752. A sales commission and property taxes have already been deducted from this amount

VIEW FULL EXAMPLE WITH ASSUMPTIONS