nova southeastern university h. wayne huizenga college of ...€¦ · miami-dade. •property size...

Luxury RV Resort – South Florida

Nova Southeastern University

H. Wayne Huizenga College

Of Business and Entrepreneurship

Assignment for Course: REE 5867 - GIS

Submitted to: Dr. Thomas Wuerzer

Submitted by: Jose (Angelo) Menezes

561-797-4620

[email protected]

Date of Submission: 10/13/2017

Title of Assignment: Luxury RV Park in South Florida

Luxury RV Resort – South Florida• “RVs are back and bigger than ever”(Source: CNN Money)

• “Millennials reignite long-dead RV market” (Source: New York Post)

• “RV touring just happens to be booming.” (Source: CNN Money)

• “RV parks are a very high-yielding investment, with returns 20%+ on your money. RV parks are among the highest-yielding of all real estate asset classes.” (Source: RV University)

• “Location, location, location! RV sales are up about 50% from a couple of years ago.” (Source: Biggerpockets)

• “The truth is that creating a business that targets children and adults as well is one sure way of making money especially if the business is laced with fun.” (Source: Profitable Ventures)

• “A recent report published by IBISWORLD shows that the Campgrounds and RV Parks industry has expanded steadily, with revenue expected to increase at an annualized rate of 2.3 percent over the five years to 2016.”(Source: Profitable Ventures)

• “Last year, 430,000 recreational vehicles of all kinds were sold, according to the RV Industry Association, an increase of 15% over the year before. And sales have been rising year after year following a one-year decline in 2009, during the financial crisis.” (Source: CNN Money)

• “The demographic and psychographics composition of those who need the services of an RV park facility is not restricted to adults who love outdoor activities and camping but extends to children and families also. There is a wide range of clientele who visit and patronize RV parks for different purposes.” (Source: Profitable Ventures)


Our Objective

• A geographical study with a goal to identify a parcel of land for development of a Luxury RV park in Miami-Dade.

• Property size can range between 10-20 acres.

• Preferably zoned for a Recreational Vehicle Park.

• Utilizing MLS parcel numbers, existing “for sale” parcels, municipal zoning codes, and land price.

• Sine the Florida Keys is super overpriced and land availability is scarce, we focused on Miami-Dade.

• Our goal is to find location, location, location.


The RV Park

10-20 acres property in Miami-Dade on or near a body of water (preferably ocean access)

150 RV pads available for rent (High Season & Low Season)

Infrastructure Requirements (Paved Streets, Clubhouse, Pool, Electric, Sewage, Water, Security, dock, marina, seawall, restaurant, etc)

Rental Rate $2,500/month (6 high season months) & $1250/month (6 low season months)

Occupancy Rate in high season is 100%

Occupancy Rate in low season is 35%

5


Initial Investment: 12,000,000.00$

Project Sale Price at EOY 5: 22,500,000.00$

Loan-To-Value Ratio: 60%

Interest Rate on Debt: 5%

Equity Percentage: 40%

Developer-Partner Equity %: 10%

Investor-Partner 1 Equity %: 36%

Investor-Partner 2 Equity %: 54%

100%

+Project Annual NOI: 2,025,000.00$

-Project Annual Debt Service: 360,000.00$

=Before Tax Cash Flow: 1,665,000.00$

Investment Summary


High Season Low Season

Sites 150 150

Rent 2,500$ 1,250$

Rent Income/Month 375,000$ 187,500$

# of Months/Season 4 8

Rent Income/Season 1,500,000$ 1,500,000$

Occupancy Rate 100% 35%

1,500,000$ 525,000$

NOI 2,025,000$

CAP 9.0%

Value 22,500,000$

Income Opportunity


Pari Passu Distribution of BTCF:

To Developer-Partner: 166,500.00$

To Investor-Partner 1: 599,400.00$

To Investor-Partner 2: 899,100.00$

1,665,000.00$

Pari Passu Distribution of Sale Proceeds:

To Developer-Partner: 1,530,000.00$

To Investor-Partner 1: 5,508,000.00$

To Investor-Partner 2: 8,262,000.00$

Gain 15,300,000.00$

Developer Investor 1 Investor 2 Total Project

Year 0 (480,000)$ (1,728,000)$ (2,592,000)$ (4,800,000)$

Year 1 166,500 599,400 899,100 1,665,000

Year 2 166,500 599,400 899,100 1,665,000

Year 3 166,500 599,400 899,100 1,665,000

Year 4 166,500 599,400 899,100 1,665,000

Year 5 + Reversion 1,696,500$ 6,107,400$ 9,161,100$ 16,965,000$

BTIRR 50.98% 50.98% 50.98% 50.98%

Pari-Passu Distribution


Preferred Return to Investor-Partner 2: 5%

Leftover Distribution % to Investor 1: 35%

Leftover Distribution % to Investor 2: 40%

Leftover Distribution % to Developer: 25%

Developer Investor 1 Investor 2 Total Project

Year 0 (480,000)$ (1,728,000)$ (2,592,000)$ (4,800,000)$

Year 1 383,850 537,390 743,760 1,665,000

Year 2 383,850 537,390 743,760 1,665,000

Year 3 383,850 537,390 743,760 1,665,000

Year 4 383,850 537,390 743,760 1,665,000

Year 5 + Reversion 3,488,850$ 5,940,390$ 7,535,760$ 16,965,000$

BTIRR 98.14% 47.87% 42.75% 50.98%

Reversion 3,105,000$ 5,403,000$ 6,792,000$ 15,300,000$

Promote Distribution


10/14/2017 11


Our Target Market:Mr. & Mrs. Bird


Who Are “The Birds”

Snowbirds are typically retirees who wish to avoid the snow and cold

temperatures of northern winter, but maintain ties with family and friends

by staying there the rest of the year. In recent years, younger people with jobs tied to seasonal tourists, often migrate southward following the tourist season

to southern resorts.

Some are also business owners who have a second home in a warmer location or whose business can be easily moved from place to place.

Many families in the United States often spend their Christmas holiday

time (up to 2 weeks) at beach resorts in Florida and California.

Some are people who suffer from seasonal affective disorder who

wish to enjoy the longer daylight hours in the southern latitudes in winter. Some snowbirds bring their homes

with them, as campers (mounted on bus or truck frames) or as boats

following the East Coast Intracoastal waterway southward.


Who are the RVers

• A significant portion of the snowbird community is made up of recreational vehicle users (RVers).

• Many own a motorhome for the sole purpose of traveling south in the winter. Often they go to the same location every year and consider the other RVers that do the same a "second family".

• Many RV parks label themselves "snowbird friendly" and get the majority of their income from the influx of RVing snowbirds.

• Several areas in Florida and Arizona have large RV communities that appear and disappear seasonally.

• Quartzsite, Arizona, that have been labeled "white city", because from a bird's-eye view all the motorhomes cover the landscape in white and then in the summer are gone.

• While historically Florida and Arizona have been the top RV snowbird locations, other southern U.S. states are experiencing a boom from snowbirds enjoying the southern climate.

• The majority of international snowbirds come from Canada, eh, and in fact there's actually a Canadian Snowbird Association.

• The majority of international snowbirds come from Canada, eh, and in fact there's actually a Canadian Snowbird Association.

• Snowbirds have good reasons for avoiding the winter weather. After a certain age, a slip on the ice becomes extremely dangerous,

• Snowbirds, meanwhile, are changing Florida's future demographics. According to Florida Realtor Magazine, by 2025 one in every five people living in Florida will be elderly. That estimation is hinged on the fact that most baby boomers reached retirement aged about four years ago. 14


Process

• Gathered Land Parcels in Miami-Dade between 10-20 Acres available for sale.

• Geocoded the data in ArcCatalog.

• Downloaded Land Use GIS data from Miami-Dade to identify those parcels that can be developed “As of right.”

• Created a Geodabase to speed up the process of Land Use overlay.

• Selected by Attribute: DESCR = 'Recreational Vehicle Parks/Camps.’

• Identify Land Parcels and compare Sale price against budget.

15


MLS Query


MLS Extract


GeocodedParcels


Land Use Map


Conclusion

• There are no land parcels currently zoned for Recreational Vehicle Parks in Miami-Dade that is for sale.

• The only option is to identify alternate Commercial or Agricultural Land.

• Perhaps near or around existing parks and apply for a re-zoning.

• So, we looked at existing land parcels to see if any could fit the bill.

• We found Parcel #8


Parcel #8

10/14/2017


PID # 30-0904-000-0010


Close up Aerial View


ISLAND FOR SALE MILE MARKER 113, NEXT TO MARINALAST PROPERTY IN DADE $2,000,000

Issues to consider:

1. Owner’s due diligence expectation.

2. Environmental Impact.

3. County regulatory process takes well more than 1 year.

4. How this project aligns with Miami-Dade Master Development Plan.

5. Much of this parcel is over water and would require unexpected infrastructure.

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